SUGARCREEK TOWNSHIP, APPELLEE, v. THE CITY OF CENTERVILLE, APPELLANT.
No. 2011-0926
Supreme Court of Ohio
Submitted April 3, 2012—Decided October 11, 2012.
133 Ohio St.3d 467, 2012-Ohio-4649
LANZINGER, J.
Morganstern, MacAdams & DeVito Co., L.P.A., and Michael A. Partlow, for appellant.
LANZINGER, J.
{¶ 1} This case involves the interplay between a municipality‘s so-called expedited type-2 annexation of real property located within a township pursuant to
I. Preliminary Principles
{¶ 2} Our resolution of this case depends upon the effect of Ohio‘s TIF statute upon land subjected to an expedited type-2 annexation. Before considering the facts and issues present in this case, it is helpful to conduct a brief overview of Ohio‘s annexation and TIF laws.
A. Annexation
{¶ 3} We have observed that “it is the policy of the state of Ohio to encourage annexation by municipalities of adjacent territory.” Middletown v. McGee, 39 Ohio St.3d 284, 285, 530 N.E.2d 902 (1988). In Ohio, the traditional method of annexation is codified in
{¶ 4} In 2001, the General Assembly enacted legislation creating three special procedures for expedited annexation. Am.Sub.S.B. No. 5, 149 Ohio Laws, Part I, 621. An expedited type-1 annexation requires consent of all parties involved, including the municipality, the township or townships, and the land owners.
{¶ 5} The expedited type-2 annexation process under
B. Tax-Increment Financing
{¶ 6} The General Assembly has enacted a variety of laws to promote economic development in Ohio. One such law for spurring economic growth is TIF, by which improvements to real property are exempted from taxation, and the funds that would have been applied toward taxes are instead applied toward public improvements that benefit the property within the area subject to the TIF.
shall specify the life of the incentive district and the percentage of the improvements to be exempted, shall designate the public infrastructure improvements made, to be made, or in the process of being made, that benefit or serve, or, once made, will benefit or serve parcels in the district.
Id.
Except with the approval of the board of education of each * * * school district within the territory of which the incentive district is or will be located, * * * the life of an incentive district shall not exceed ten years, and the percentage of improvements to be exempted shall not exceed seventy-five per cent.
The TIF exemption expires on the date specified in the ordinance or on the date on which the public improvements are paid for in full, whichever occurs first.
{¶ 7} In other words, a municipality may enact a TIF establishing an incentive district exempting from local real estate taxes improvements to real property
{¶ 8} With this background in mind, we turn to this discretionary appeal, which asks whether a city TIF may be applied to township property that was subject to an expedited type-2 annexation.
II. Facts
{¶ 9} The property involved in this litigation consists of 268 acres located on both sides of Interstate 675 at the Wilmington Pike interchange in Greene County adjacent to appellant city of Centerville (“the City“) in appellee Sugarcreek Township (“the Township“). In April 2006, the City entered into preannexation agreements with the property owners of that area. The agreements specified that a third-party developer intended to purchase the property from the owners for a multiuse development. As part of the agreements, the land was to be annexed to the City, and in return the City would create a TIF.
{¶ 10} All of the property owners signed and submitted petitions to the Greene County Board of Commissioners in May 2006 to annex the property pursuant to
Notwithstanding anything to the contrary in section 503.07 of the Revised Code, unless otherwise provided in an annexation agreement entered into pursuant to section 709.192 of the Revised Code or in a cooperative economic development agreement entered into pursuant to section 701.07 of the Revised Code, territory annexed into a municipal corporation pursuant to this section shall not at any time be excluded from the township under section 503.07 of the Revised Code and, thus, remains subject to the township‘s real property taxes.
{¶ 11} In September 2006, before the annexation was completed, the Township filed an action for declaratory judgment seeking in part a declaration that the City could not establish a TIF as the property owners and the City had agreed to
{¶ 12} The Second District Court of Appeals, however, recognized that both the City and the Township are entitled to tax the land because the land is within each entity‘s borders. 184 Ohio App.3d 480, 2009-Ohio-4794, 921 N.E.2d 655, ¶ 171 (2d Dist.). The court of appeals distinguished between inside and outside millage.
[t]he aggregate amount of taxes that may be levied on any taxable property in any subdivision or other taxing unit shall not in any one year exceed ten mills on each dollar of tax valuation of such subdivision or other taxing unit, except for taxes specifically authorized to be levied in excess thereof.
Taxes falling below this ten-mill limit are referred to as minimum levies or inside millage, while voter-approved taxes exceeding the ten-mill limit are referred to as additional levies or outside millage.
{¶ 13} The court of appeals held that both entities were entitled to retain their minimum levies on the property within the annexation area, reduced to an amount within the ten-mill inside-millage limit in the manner prescribed by
{¶ 14} On remand, the parties disputed whether the City could enact a TIF on the Township‘s outside millage. The trial court concluded that “the TIF statutes do not allow Centerville to TIF outside millage real property taxes allowed by statute and reserved to the township by operation of
{¶ 15} Once again, the City appealed, arguing that it had the authority to adopt a TIF plan for the annexed land that affects the Township‘s outside millage. 193 Ohio App.3d 408, 2011-Ohio-1830, 952 N.E.2d 519, ¶ 15 (2d Dist.). The City also asserted that the plain language of
R.C. 709.023(H) and5709.40 should be read in pari materia to permit a municipal corporation to adopt a TIF ordinance affecting real property located within the municipality pursuant toR.C. 5709.40 , except to the extent that the real property “remains subject to the real property taxes,”R.C. 709.023(H) , of a township in which the real property likewise remains located following a type-2 annexation.
{¶ 16} The City appealed, and we accepted for review its proposition of law, which states, ”
III. Legal Analysis
{¶ 17} We must decide whether a municipality may adopt a TIF that temporarily exempts from township taxes a portion of the value of an improvement on land within a township that has been annexed using the expedited type-2 annexation method and is subject to a municipal TIF, or whether a municipal TIF may not affect the property taxes received by the township. We hold that a municipality may adopt a TIF that temporarily exempts improvements to the annexed property from township property taxes as well as municipal taxes.
A. The TIF Tax Exemption Applies to Townships Subject to Expedited Type-2 Annexation
{¶ 18} The City argues that the plain language of
{¶ 19} “The primary goal of statutory construction is to ascertain and give effect to the legislature‘s intent in enacting the statute. Brooks v. Ohio State Univ. (1996), 111 Ohio App.3d 342, 349, 676 N.E.2d 162.” State v. Lowe, 112 Ohio St.3d 507, 2007-Ohio-606, 861 N.E.2d 512, ¶ 9. To determine the legislative intent, we must first look to the plain language of the statute itself. Id., citing State ex rel. Burrows v. Indus. Comm., 78 Ohio St.3d 78, 81, 676 N.E.2d 519 (1997). “We apply a statute as it is written when its meaning is unambiguous and definite. Portage Cty. Bd. of Commrs. v. Akron, 109 Ohio St.3d 106, 2006-Ohio-954, 846 N.E.2d 478, ¶ 52, citing State ex rel. Savarese v. Buckeye Local School Dist. Bd. of Edn. (1996), 74 Ohio St.3d 543, 545, 660 N.E.2d 463.” Id. If a statute is unambiguous, it “must be applied in a manner consistent with the plain meaning of the statutory language. State ex rel. Burrows, 78 Ohio St.3d at 81, 676 N.E.2d 519.” Id.
{¶ 20} The plain language of
{¶ 21} The Township argues that interpreting
{¶ 22} We do not agree. The two clauses are not independent sentences. The ability to tax is a result of the fact that the territory remains a part of the township. We accordingly read the final clause of
{¶ 23} This interpretation is bolstered by
B. The TIF Statute Preserves a Township‘s Ability to Collect Taxes
{¶ 24} The Township argues that by exempting portions of the increased value of property, a TIF violates the condition of
{¶ 25} The Township has not provided any support on the record that improvements arising from the TIF will result in an increased demand for fire protection and emergency services or that increased demand for these services will place the Township in dire fiscal straits. Furthermore, the Township fails to acknowledge that it will be entitled to collect taxes on 25 percent of the value of any improvements to the annexed land, which arguably may be used to offset any increased demand in service.
{¶ 26} Given our conclusion that the plain language of
IV. Conclusion
{¶ 27} When township land has been annexed using the expedited type-2 process established by
Judgment reversed and cause remanded.
O‘CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O‘DONNELL, CUPP, and MCGEE BROWN, JJ., concur.
Frost, Brown, Todd, L.L.C., Matthew C. Blickensderfer, and Scott D. Phillips, for appellee.
Brahm & Cunningham, L.L.C., Richard C. Brahm, and Catherine A. Cunningham; and Altick & Corwin Co., L.P.A., and Scott A. Liberman, for appellant.
Matthew J. DeTemple, urging affirmance for amici curiae Ohio Township Association, Coalition of Large Ohio Urban Townships, Ross Township, Weathersfield Township, Springfield Township, West Chester Township, Violet Township, Boardman Township, Miami Township, Hamilton Township, Howland Township, Pleasant Township, Royalton Township, Colerain Township, Moulton
Leslie S. Landen, urging reversal for amicus curiae city of Middletown.
Porter, Wright, Morris & Arthur, L.L.P., Robert A. Meyer Jr., Mark A. Snider, and L. Bradfield Hughes, urging reversal for amici curiae Ohio Home Builders Association, Building Industry Association of Central Ohio, Ohio Association of Realtors, and Central Ohio NAIOP.
Darren Shulman, Delaware City Attorney, urging reversal for amicus curiae city of Delaware.
Wiles, Boyle, Burkholder & Bringardner Co., L.P.A., Eugene L. Hollins, and Dale D. Cook, urging reversal for amici curiae Ohio Municipal League and cities of Troy, Kent, New Albany, Zanesville, Westerville, Hilliard, Miamisburg, and Dayton.