Does a Florida community development district serve a public purpose?

Plain-English summary

A community development district (CDD) is a special-purpose local government Florida developers use to finance and run the roads, water, sewer, and other basic infrastructure of a large planned community, often by issuing tax-exempt bonds repaid through assessments on the property in the district. The Villages Center Community Development District manager asked the Attorney General's office whether a CDD created under Chapter 190, Florida Statutes, serves a public purpose and is controlled by the state. This informal opinion, signed by Assistant Attorney General Joslyn Wilson, said yes on both points.

The office explained that the Legislature, in Chapter 190, expressly found a public need for these districts to manage and finance basic community development services, and that authorizing them as special districts amounts to a legislative determination that they serve a public purpose. That matters constitutionally: Article VII, section 1 limits taxes and tax-funded spending to public purposes, and Article VII, section 10 bars using public taxing power to aid private interests. The opinion pointed to the Florida Supreme Court's decision in Zedeck v. Indian Trace Community Development District, which rejected the argument that a CDD's water and sewer bond issue was really for private benefit, holding that a legislative declaration of public purpose is presumed valid unless patently erroneous, and that the public interest was strong enough even though the project mostly served land owned by a single developer. On the control point, the office noted that a CDD has only the powers the Legislature grants or that are necessarily implied, so it is the Legislature, through Chapter 190 and related statutes, that prescribes a district's duties.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Chapter 190 and the related special-district and tax statutes (Chapters 189 and 196) have been amended and renumbered since 2012. The public-purpose principle in Article VII is durable, but confirm the current statutes before relying on this analysis.

Common questions

Q: What is a community development district?
A: It is a local unit of special-purpose government created under Chapter 190, Florida Statutes, to plan, finance, build, operate, and maintain basic infrastructure for a community, such as roads, drainage, water, and sewer. It can levy assessments and, in some cases, taxes, and can issue bonds.

Q: Does a CDD serve a public purpose even when it mostly benefits one developer's land?
A: Under this opinion and Zedeck v. Indian Trace Community Development District, yes. The Florida Supreme Court held that the public interest in infrastructure like water and sewer expansion was strong enough to survive a challenge even where the system primarily served land owned by a single company.

Q: Who controls a community development district?
A: The opinion described CDDs as creatures of the Legislature. A district can exercise only the authority Chapter 190 (and other applicable statutes) grants or that is necessarily implied, so the Legislature sets the framework within which the district's board operates.

Q: Why does the public-purpose question matter?
A: Because Article VII of the Florida Constitution limits taxation and public spending to public purposes (section 1) and forbids using public taxing power to aid private parties (section 10). A district that did not serve a public purpose could not constitutionally tax or pledge public credit.

Background and statutory framework

Chapter 190 contains the Legislature's findings in section 190.002(1) that there is a public need for independent districts to manage and finance basic community development services. Section 190.003(6) defines a CDD as "a local unit of special-purpose government," and section 189.403(1) defines "special district." For tax purposes, section 189.403(1) directs that special districts be treated as municipalities under section 196.199(1), which exempts municipal property used for public purposes from ad valorem tax.

The constitutional anchor is Article VII: section 1 impliedly limits taxes and tax-revenue spending to public purposes, and section 10 prohibits the state or a special district from using its taxing power to aid a private interest. The opinion relied on Zedeck v. Indian Trace Community Development District, 428 So. 2d 647 (Fla. 1983), where the Florida Supreme Court upheld a CDD's water and sewer bond issue, quoting the rule from State v. Housing Finance Authority of Polk County, 376 So. 2d 1158 (Fla. 1979), that a legislative declaration of public purpose is presumed valid unless patently erroneous.

Citations and references

Statutes and constitution:

• s. 190.002(1), Fla. Stat. (legislative findings on the need for CDDs)
• s. 190.003(6), Fla. Stat. (definition of community development district)
• s. 189.403(1), Fla. Stat. (definition of special district; treated as municipality for tax exemption)
• s. 196.199(1), Fla. Stat. (tax exemption for municipal property used for public purposes)
• Art. VII, s. 1, Fla. Const. (taxes and tax spending limited to public purposes)
• Art. VII, s. 10, Fla. Const. (no use of public taxing power to aid private interests)

Cases:

• Zedeck v. Indian Trace Community Development District, 428 So. 2d 647 (Fla. 1983), CDD bond issue served a public purpose
• State v. Housing Finance Authority of Polk County, 376 So. 2d 1158 (Fla. 1979), legislative public-purpose declaration presumed valid unless patently erroneous

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/community-development-district-public-purpose
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/8133

Original opinion text

Ms. Janet Y. Tutt

District Manager

Villages Center Community

Development District

3201 Wedgewood Lane

The Villages, Florida 32162

Dear Ms. Tutt:

You ask whether a community development district created pursuant to Chapter 190, Florida Statutes, serves a public purpose and is controlled by the state.

This office previously advised you that a community development district created pursuant to Chapter 190, Florida Statutes, is generally considered under state law to constitute a political subdivision of the state and has been considered by this office to be a local unit of special-purpose government.[1] You ask whether such districts serve a public purpose and are controlled by the state.

The Florida Legislature, in authorizing the creation of community development districts, has expressed the public need for such districts, stating:

"(a) There is a need for uniform, focused, and fair procedures in state law to provide a reasonable alternative for the establishment, power, operation, and duration of independent districts to manage and finance basic community development services; and that, based upon a proper and fair determination of applicable facts, an independent district can constitute a timely, efficient, effective, responsive, and economic way to deliver these basic services, thereby providing a solution to the state’s planning, management, and financing needs for delivery of capital infrastructure in order to service projected growth without overburdening other governments and their taxpayers.

• • *

It is in the public interest that long-range planning, management, and financing and long-term maintenance, upkeep, and operation of basic services for community development districts be under one coordinated entity."[2] (e.s.)

By authorizing the creation of such districts as a special district, the Legislature has recognized that a governmental or public purpose will be served.[3] I note that Chapter 190, Florida Statutes, subject to the conditions specified therein, authorizes community development districts to impose taxes.[4] The Legislature has provided an exemption from ad valorem taxes for the property of special districts, such as a community development district, when such property is used for a public purpose.[5] Article VII, section 1, Florida Constitution, impliedly limits the imposition of taxes and the expenditures of tax revenues to public purposes.[6] Moreover, Article VII, section 10, Florida Constitution, prohibits the state or any special district from giving or using its taxing power to aid any private interest or individual.

Clearly then, the Legislature, with the enactment of Chapter 190, Florida Statutes, has made the legislative determination that such districts, in carrying out the responsibilities prescribed in that act, are serving a public purpose. In Zedeck v. Indian Trace Community Development District,[7] the Florida Supreme Court rejected arguments that the primary purpose of the community development district's bond issue was to benefit private property, stating:

"The expansion of water and sewer systems contemplated by the [community development district] and the bond issue for implementing that expansion are within the purposes of chapter 190 and within the powers given community development districts to implement those purposes. §§190.002, 190.011, 190.012, 190.016. A legislative declaration of public purpose is presumed valid and should be considered correct unless patently erroneous. State v. Housing Finance Authority of Polk County, 376 So.2d 1158 (Fla.1979). Even though the system expansion affects primarily land owned by Arvida, the public interest in this project is present and sufficiently strong to overcome Zedeck's claim."

Moreover, while established as an independent special district, the powers of a community development district are measured by the terms of the act under which it is organized and it can exercise no authority that has not clearly been granted to it by the Legislature or which is necessarily implied from the powers conferred.[8] Thus, it is the Legislature, through the enactment of Chapter 190, Florida Statutes, and such other statutes as may be applicable to such districts, that has prescribed the duties and responsibilities of community development districts.[9]

I trust the above informal comments may be of assistance.

Sincerely,

Joslyn Wilson

Assistant Attorney General

JW/tsh

[1] See Inf. Op. to Janet Tutt, dated June 28, 2012. The opinion further noted that Ch. 190, Fla. Stat., does not prevent the establishment of a community development district merely because there is only one landowner, nor does the chapter prevent the creation of such districts when there are no qualified electors as that term is defined in s. 190.003(17), Fla. Stat., although without qualified electors, a community development district may not levy ad valorem taxes.

[2] Section 190.002(1), Fla. Stat.

[3] See s. 190.003(6), Fla. Stat., defining a "Community development district" as "a local unit of special-purpose government." And see s. 189.403(1), Fla. Stat., defining "Special district" to mean "a local unit of special purpose, as opposed to general-purpose, government within a limited boundary . . . ."

[4] See ss. 190.021 and 190.006(3)(a)1., Fla. Stat. Cf. Art. VII, s. 9, Fla. Const., entitled "Local taxes," providing, inter alia, that special districts may be authorized by law to levy ad valorem taxes and may be authorized by general law to levy other taxes.

[5] See s. 189.403(1), Fla. Stat., defining "Special district" and providing that "[f]or the purpose of s. 196.199(1), special districts shall be treated as municipalities" and s. 196.199(1), Fla. Stat., creating statutory exemption for property of "municipalities of this state or of entities created by general or special law . . . which is used for governmental, municipal, or public purposes").

[6] See Board of Commissioners of Escambia County v. Board of Pilot Commissioners of Port of Pensacola, 42 So. 697 (Fla. 1906); Brown v. Winton, 197 So. 543 (Fla. 1940).

[7] 428 So. 2d 647, 648 (Fla. 1983).

[8] See Op. Att'y Gen. Fla. 08-02 (2008). Cf. Forbes Pioneer Boat Line v. Board of Commissioners of Everglades Drainage District, 82 So. 2d 346 (Fla. 1919); Ops. Att'y Gen. Fla. 80-55 (1980), 83-44 (1983), and 74-169 (1974), recognizing that special districts possess only such powers as have been expressly granted by law or necessarily implied therefrom.

[9] See generally Ops. Att'y Gen. Fla. 08-02 (2008) (use of community development district funds), 07-05 (2007) (authority of special district to levy special assessment on property outside district boundaries), 96-66 (1996) (authority of community development district to enter into contract for cable television service to residents of district), and 83-44 (1983).