Jacksonville Port Auth. v. Alamo Rent-A-Car, Inc.

Citations: 600 So. 2d 1159; 1992 WL 102914Docket: 91-2269

Court: District Court of Appeal of Florida; May 18, 1992; Florida; State Appellate Court

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The Jacksonville Port Authority (JPA) appealed a final declaratory judgment ruling that it had imposed an unauthorized tax on Alamo Rent-A-Car, specifically a six percent "privilege fee" on Alamo's gross receipts. The JPA, an independent public agency responsible for Jacksonville International Airport (JIA), has no independent taxing authority and derives its revenue from various fees and grants. Its powers include adopting rules for projects under its control, limited to just and reasonable regulations consistent with public interest.

In 1989, the JPA implemented a resolution imposing the six percent fee on nontenant rental car companies for access to airport services, while tenant agencies pay a ten percent fee. Alamo, operating off-airport since 1984, provided free transportation to the airport and had previously enjoyed unrestricted access to public roadways and ramps. The JPA justified the fee on three grounds: preserving revenue, reducing competitive disparities between on- and off-airport companies, and funding airport expansion. The JPA argued that off-airport operators benefit significantly from airport access, which was not reflected in their prior fees, and aimed to establish a fair rates schedule for all commercial entities using the airport. The appellate court ultimately reversed the trial court's decision.

Both cost and benefit studies were reviewed by the JPA prior to drafting the resolution, with relevant information shared among stakeholders. However, it was established that the six percent fee imposed does not directly relate to any cost analysis; instead, it is derived from a ten percent fee charged to tenant companies, adjusted for their competitive advantages. The fees collected from Alamo for JPA support all three Jacksonville airports, despite Alamo only utilizing JIA. The six percent gross receipts fee, applicable to Alamo and other nontenant companies, was not explicitly described in the revenue bond financing the new airport.

Alamo filed a lawsuit before the resolution's effective date, arguing that the six percent fee constituted an unauthorized tax and exceeded the JPA's authority regarding just and reasonable rates as outlined in the Charter. During a non-jury trial, the parties agreed on key issues regarding the legality of the fee, questioning if it was an unauthorized tax under Article VII, section 1(a) of the Florida Constitution, or if it surpassed the JPA's powers to regulate rates. Alamo contended that fees should be based on a cost analysis specific to its use of JIA’s roadways and ramps, akin to charges for taxis and hotel shuttles, rather than the tenant's fees.

The trial court found the six percent fee unauthorized by the Charter, deeming it an illegal tax under the Florida Constitution, agreeing that the JPA exceeded its authority by imposing an unreasonable fee unrelated to Alamo's actual facility use. The court noted that Alamo's usage was comparable to other commercial users, leading to the conclusion that the fee was neither just nor reasonable, thus classifying it as an unlawful tax.

In contrast, the JPA and supporting amici argued that the trial court misapplied legal standards and overlooked case law that validates similar fees in other jurisdictions. They contended that the determination of whether the six percent fee is a user fee or a tax must be considered separately from its authorization under the Charter.

The six percent gross receipts fee imposed by the JPA is classified as a user fee rather than a tax. The distinction lies in the nature of the charge: a tax generates revenue for general government support, while a user fee is a specific charge for utilizing public facilities or services. The United States Supreme Court defined user fees as charges meant to cover the costs of construction and maintenance of public facilities, a principle established in Commonwealth Edison Co. v. Montana and reiterated in Evansville-Vanderburgh Airport Authority Dist. v. Delta Airlines. The Florida Supreme Court further clarifies that a tax is a compulsory charge, unaffected by the will of the individual it is imposed upon. 

In this case, the fee is closely tied to Alamo's use of JPA facilities, which directly benefit its business operations. Alamo's ability to avoid the fee by sourcing customers elsewhere underscores its nature as a user fee. The trial court misinterpreted the Supreme Court's decision in analyzing this issue, failing to recognize that similar charges at airports have consistently been treated as user fees across various cases. Notable precedents, such as Toye Brothers and numerous subsequent cases involving off-airport rental car companies, affirm that such fees are compensation for the use of airport facilities, not taxes. The Eleventh Circuit's ruling in Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Authority exemplifies this interpretation, indicating that the benefits derived from the entire facility justify a broad understanding of user fees.

State appellate courts have consistently upheld that percentage of revenue fees imposed by airports on off-airport rental car companies are legitimate fees rather than taxes. In the case of Alamo Rent-A-Car, Inc. v. Board of Supervisors of Orange County, the California Court of Appeal rejected Alamo's challenge against a nine percent privilege fee, clarifying that such fees need not be limited to costs associated with airport road usage but can also fund general airport maintenance and operational expenses. The court emphasized that the airport facilities serve all rental car companies, and the fee reflects the increased demand on airport infrastructure due to shuttle operations by off-site rental companies. The court also distinguished the fee from a tax by noting it is voluntary; Alamo incurs the fee only by choosing to operate at the airport. 

Additionally, in Westrac, Inc. v. Walker Field Public Airport Authority, a similar ten percent privilege fee was upheld as a permissible charge to offset airport operational costs. The trial court's decision to classify the fee as an unauthorized tax was critiqued for relying on Florida decisions that were not applicable, particularly a misinterpretation of the Contractors and Builders Association v. City of Dunedin case regarding fund usage. The JPA's authority to regulate its facilities was affirmed, contrasting with other cases where the government lacked such regulatory power. Overall, the court ruled that the fee is a legitimate charge for entities benefiting from airport operations, supporting the self-sustaining nature of the airport’s financial model.

The JPA, as the proprietor of the airport system, imposes a user fee as part of its proprietary status, not under general police powers. This distinction is crucial in addressing the tax issue, differentiating the JPA's actions from those in similar cases that involved municipal regulatory powers. The user fee is intended to ensure that those benefiting from the airport facilities contribute fairly to the associated costs. Alamo acknowledged the legitimacy of the fee as a user charge, although it contested the amount and the specific facilities to which it applied. The fee, calculated as a percentage of Alamo's customer revenue at JIA, is tied to the benefits received and is therefore classified as a user fee rather than a tax. 

Regarding the JPA's authority to impose the fee under the Charter, it was determined that the trial court interpreted the Charter too restrictively. Section 20 mandates a liberal construction of the Charter to fulfill its intended purposes, allowing the JPA broad discretion to "fix, regulate and collect rates and charges" for services. The JPA's authority is only limited by the requirement that its charges be just, reasonable, and in the public interest, rejecting the trial court's view that fees should only cover the direct costs of the facilities used by Alamo.

Courts have consistently ruled that off-airport rent-a-car operators, such as Alamo, benefit from and utilize the entire airport facility where they operate. In the case of Alamo Rent-A-Car, Inc. v. Sarasota-Manatee Airport Authority, the Eleventh Circuit dismissed Alamo's claim against an airport fee, stating it was not ultra vires. Although the decisions, aside from one, were based on federal constitutional principles, they are deemed persuasive for the current situation. The trial court erred by not applying these precedents, which support the authority of the JPA to impose a gross receipts fee on off-airport rent-a-car services. The court dismissed the trial court's finding that the fee was unrelated to Alamo's usage, as its use parallels that of other transportation services like taxis and hotel vans. The JPA's authority under its Charter allows for the imposition of a six percent fee, which is considered reasonable and in the public interest. The trial court's ruling that the fee constituted an unlawful tax was reversed. Additionally, the excerpt notes references to Florida statutes and previous cases that are relevant but ultimately found not to apply in this instance.