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ST. LUCIE COUNTY, FLORIDA; SUWANNEE COUNTY, FLORIDA; TAYLOR COUNTY, FLORIDA; VOLUSIA COUNTY, FLORIDA; WAKULLA COUNTY, FLORIDA; and WALTON COUNTY, FLORIDA; all of which are political subdivisions of the State of Florida; and the FLORIDA ASSOCIATION OF COUNTIES, INC., a not‐for‐profit corporation established under Florida law, Plaintiffs,
vs.
ELIZABETH DUDEK, in her official capacity as SECRETARY of the STATE OF FLORIDA, AGENCY FOR HEALTH CARE ADMINISTRATION; and LISA VICKERS, in her official capacity as EXECUTIVE DIRECTOR of the STATE OF FLORIDA, DEPARTMENT OF REVENUE, Defendants. _____________________________________________/
COMPLAINT FOR DECLARATORY JUDGMENT AND SUPPLEMENTAL RELIEF
Plaintiffs, Alachua County, Florida; Bay County, Florida; Bradford County, Florida;
Broward County, Florida; Charlotte County, Florida; Clay County, Florida; Collier County,
Florida; DeSoto County, Florida; Dixie County, Florida; Escambia County, Florida; Flagler
County, Florida; Franklin County, Florida; Gulf County, Florida; Hamilton County, Florida;
Hardee County, Florida; Hendry County, Florida; Hernando County, Florida; Highlands
County, Florida; Hillsborough County, Florida; Lafayette County, Florida; Lake County,
Florida; Lee County, Florida; Leon County, Florida; Levy County, Florida; Manatee County,
Florida; Marion County, Florida; Martin County, Florida; Miami‐Dade County, Florida; Monroe
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County, Florida; Nassau County, Florida; Okaloosa County, Florida; Okeechobee County,
Florida; Osceola County, Florida; Pasco County, Florida; Pinellas County, Florida; Polk County,
Florida; Putnam County, Florida; Santa Rosa County, Florida; Sarasota County, Florida;
Seminole County, Florida; St. John’s County, Florida; St. Lucie County, Florida; Suwannee
County, Florida; Taylor County, Florida; Volusia County, Florida; Wakulla County, Florida; and
Walton County, Florida (collectively, the “Counties”); and the Florida Association of Counties
(“FAC”), sue the Defendants, Lisa Vickers, in her official capacity as Executive Director of the
State of Florida, Department of Revenue (the “Department”); and Elizabeth Dudek, in her
official capacity as Secretary of the State of Florida, Agency for Health Care Administration (the
“Agency”), and allege:
1. In 1990, Florida voters amended their state constitution by adding article VII,
section 18 (the “Unfunded Mandates Provision”). This new constitutional protection limits the
ability of the legislature of the State of Florida (the “State”) to impose unfunded mandates on
counties. This constitutional limit was designed not to hamstring the State legislature (the
“Legislature”), but to require thoughtful and deliberate action, as well as overwhelming
support, before the State can require counties to pay for a State mandate. Such mandates
threaten to increase taxes and to remove local dollars from communities; therefore, the
Unfunded Mandates Provision requires approval by a super‐majority vote in each house of the
Legislature. At its core, article VII, section 18, ensures that, absent extraordinary action by the
Legislature, local taxpayer dollars will be used to pay for local, not statewide, desires and needs.
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2. In 2012, the Legislature violated this constitutional protection and enacted
chapter 2012‐33, Laws of Florida, a true and correct copy of which is attached as Exhibit A.
Section 12 of this new law (“Section 12”) is precisely the type of general law that article VII,
section 18, was designed to prevent. Without the constitutionally required super‐majority vote,
the Legislature created new methods and mandates for billing the State’s old and stale Medicaid
costs to counties by automatically withholding the counties’ share of certain state tax revenues
before distribution. In doing so, Section 12 shifts the burden of a fundamentally flawed billing
scheme to local taxpayers. Through this error‐ridden scheme, the State is coercing counties into
paying for lawfully time‐barred back bills, as well as new Medicaid obligations, that cannot
rightfully be traced to their communities. This attempt is a prime example of requiring use of
local tax dollars for statewide interests and desires. Under Section 12, counties will be impacted
by this new billing scheme beginning May 7, 2012. Starting then, the State will begin
withholding tax revenue shares from the counties to pay for bills that should be paid by others.
3. This suit does not challenge whether counties should participate with the State in
making its Medicaid payments. That policy decision was made long ago. Rather, counties want
to pay their fair and accurate share of the Medicaid bills on behalf of their residents, which they
have been prevented from doing because the State billing system is plagued with rampant
errors. Counties do not want their tax revenue share automatically raided to pay bills under the
new scheme enacted by Section 12. The Counties ask this Court to enforce their state
constitution and to require the Legislature to play by the rules before attempting to reduce the
amount of tax revenues returned to the people.
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4. The Counties intend to seek an immediate order to prevent the State from
withholding amounts due to be disbursed to the Counties beginning on May 7, 2012. In
addition, they seek an expedited declaration from this Court that the Unfunded Mandates
Provision has been violated.
Jurisdiction and Venue
5. This is an action for declaratory judgment and supplemental relief, including
injunctive relief, pursuant to chapter 86, Florida Statutes, seeking a declaration that Section 12 is
unconstitutional, invalid, and unenforceable.
6. The plaintiffs request that the Court expedite consideration of this action
pursuant to section 86.111, Florida Statutes, which authorizes the Court to “order a speedy
hearing of an action for a declaratory judgment and advance it on the calendar.”
7. This Court has jurisdiction pursuant to article V, section 5, of the Florida
Constitution, and sections 26.012 and 86.011, Florida Statutes.
8. Venue is proper in Leon County under section 47.011, Florida Statutes, because
the Agency and the Department maintain their principal headquarters in Leon County, Florida.
9. The plaintiffs have served a copy of this complaint on the Attorney General of
the State and filed their notice of compliance with section 86.091, Florida Statutes, and Florida
Rule of Civil Procedure 1.071.
10. All conditions precedent to the initiation and maintenance of this action have
occurred, have been performed, or have otherwise been waived.
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Parties
11. The Counties are all political subdivisions of the State, existing under article VII,
of the Florida Constitution and chapter 7, Florida Statutes.1 The 47 Counties’ residents
constitute approximately 76% of the State’s total population.
12. FAC is a statewide association and not‐for‐profit corporation organized and
operating under chapter 617, Florida Statutes, for the purpose of representing county
government in the State and protecting, promoting, and improving the mutual interests of all
counties in the State. Among the express purposes for which FAC was organized is defending
the “rights . . . of county government under any constitutional provision [and] statute . . . .”
Currently, 66 of the 67 counties in the State are members of FAC.
13. Elizabeth Dudek is the Secretary of the Agency, an agency of the State, created
and operating under section 20.42, Florida Statutes. She is sued in her official capacity only, and
not personally.
14. Lisa Vickers is the Executive Director of the Department, an agency of the State,
created and operating under section 20.21, Florida Statutes. She is sued in her official capacity
only, and not personally.
15. Section 12 grants the Agency and the Department certain authority and
responsibility for enforcing and otherwise implementing its terms.
1Alachua County, Broward County, Charlotte County, Clay County, Hillsborough
County, Lee County, Leon County, Miami‐Dade County, Osceola County, Pinellas County, Polk County, Sarasota County, Seminole County, Volusia County, and Wakulla County are all charter counties, operating under their respective charters. The remaining Counties are non‐charter counties.
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General Allegations
The Medicaid Program
16. Medicaid is a governmental program that provides medical and health‐related
services to specific groups of people in the United States, including the State of Florida.
Medicaid was enacted in 1965 under Title XIX of the Social Security Act. Medicaid is a means‐
tested social protection program for certain individuals and families with low incomes and few
resources. Medicaid is financed through joint federal and state funding and administered by
each state.
17. At the federal level, Medicaid is managed by the Centers for Medicare and
Medicaid Services (“CMS”), a division of the U.S. Department of Health and Human Services.
Primary oversight of the program is handled at the federal level, but each state establishes its
own eligibility standards; determines the type, amount, duration, and scope of services; sets the
rate of payment for services; and administers its own Medicaid program.
18. Each state operates its own Medicaid program under a state plan that must be
approved by CMS, under which a state reimburses providers of medical assistance to eligible
individuals. The state plan outlines current Medicaid eligibility standards, policies and
reimbursement methodologies to ensure the state program receives matching federal funds.
19. In Florida, the Agency is responsible for the administration of Medicaid.
20. Federal law requires the Agency to have and maintain a computer system, which
is known as the Medicaid Management Information System (“MMIS”). The MMIS is intended
to control and administer the Medicaid program. A private contractor acts as the Agency’s
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fiscal agent and operates the MMIS pursuant to a contract that began on May 1, 2006, and ends
on January 31, 2013.
21. The Department of Children and Families (“DCF”) acts as the Agency’s agent
by enrolling people in Medicaid. DCF performs this Medicaid eligibility function using a
separate computer system and a separate private contractor.
22. Medicaid serves approximately 3 million people in Florida, over half of whom
are 20 years of age or younger. Estimated expenditures for fiscal year 2011‐2012 are
approximately $20 billion. The federal government will pay approximately 56% of these
expenditures, and Florida will pay approximately 44%.
23. The State is responsible to the federal government for the full portion of the
State’s share of Medicaid costs. However, the State also charges counties for certain items of
care and service as provided in section 409.915, Florida Statutes (2011) (the “Prior Law”).
The Prior Law
24. Under the Prior Law, counties were required to “set aside sufficient funds to pay
for items of ‘care and service’ provided to the county’s eligible recipients for whom county
contributions are required, regardless of where in the state the care or service is rendered.”
§ 409.915(3), Fla. Stat. (2011).
25. Under the Prior Law, county contributions were to be “based on statements
rendered by the [A]gency in consultation with the counties.” § 409.915(4), Fla. Stat. (2011).
26. Under the Prior Law’s consultation requirement, the final bill was not to be
determined solely by the Agency. The Agency provided each county with a monthly listing of
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residents whose Medicaid costs the county was responsible for paying. Each county was
allowed to review the Medicaid billings provided by the Agency. Each county reviewed the
information to verify the individual’s county of residence and to determine whether the bill was
accurate. If a county determined that the bill was correct, it remitted payment to the Agency
and such funds were deposited into the State’s General Revenue Fund. If a county determined
the charges contained in the bill were incorrect, the county denied such portion of the bill and
returned it to the Agency. See Fla. H.R. Approp. Comm., HB 5301 (2012) Staff Analysis 6 (final
March 19, 2012) (the “Final Staff Analysis”), attached as Exhibit B. The Agency researched each
rejected bill and either provided the county with additional documentation supporting its
determination or identified the appropriate county to be billed. This process continued until the
bill was paid by the appropriate county or the Agency determined the cost could not be billed
to a specific county.
27. Under the Prior Law, if a county failed to remit payment within 60 days, the
State was authorized to withhold the county’s cigarette tax receipts or any other funds
distributed to the county. § 409.915(5), Fla. Stat. (2011). However, the counties were not
required to pay Medicaid contributions from any particular revenue source.
28. Under the Prior Law, the Agency issued many corrected billings and the
Counties paid them. Over the course of the past decade, however, some disputed billings
remain uncorrected and uncollected due to an inadequate factual basis to support payment
from public funds. Although Counties are willing to pay their fair share for Medicaid services
received by their residents, they cannot in good faith make payments for bills that are clearly
erroneous and lacking support. The lack of consistency with regard to the Agency’s direction to
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the Counties on the billing process has been frustrating and time consuming. The Agency is
currently processing invoices without any rules. As of December 31, 2011, uncollected
Medicaid billings extending from fiscal year 2001 to fiscal year 2011 totaled $325.5 million. See
Final Staff Analysis at 6 (Ex. B).
Examples of Billing Problems
29. The Agency has adopted new billing systems as part of MMIS, which has
worsened the problems. Around 2008, the frequency and type of errors experienced increased
dramatically and the amount of collections from the Counties decreased significantly.
30. The data provided by the Agency to the Counties to support billings has been
flawed and notoriously incorrect, and Counties have had to significantly increase the time they
spend identifying and correcting these errors.
31. The Counties have notified the Agency of the errors, including, but not limited
to: (a) billing for non‐county residents; (b) multiple billings for the same event; (c) billing health
care provider costs at zero dollars; (d) billing incorrect rates; (e) bills containing incorrect
addresses or addresses that do not physically exist; (f) billing for non‐Florida residents; (g)
billing for services not rendered; and (h) bills that are facially fraudulent.
32. In addition, the Agency has required the Counties to pay for errors between the
Agency and service providers rather than returning the financial responsibility back to those
service providers.
33. Below are a few specific examples of the many problems related to the State’s
Medicaid billing system.
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a. Alachua County, Florida (“Alachua”). Alachua appears first on an
alphabetical list of Florida counties. For this reason, apparently, the billing system
automatically defaults to Alachua’s county code (01) if an applicant for Medicaid fails to
identify a different code. As a result, the Agency regularly bills Alachua for services received
by non‐residents. Rightfully, Alachua has refused to pay such bills. Alachua has informed the
Agency of its reasons for denial, and the Agency has acknowledged billing problems unique to
Alachua. The Agency has assured Alachua that the MMIS billing problems have been
corrected. However, all historical bills continue to reflect these errors.
b. Escambia County, Florida (“Escambia”). Escambia is contiguous with
Escambia County, Alabama. Escambia regularly receives billings related to Escambia County,
Alabama. Rightfully, Escambia has refused to pay such bills. Escambia has informed the
Agency of its reasons for denial, but the Agency has yet to correct the out‐of‐state billings. In
fact, the Agency has advised that no one at the Agency verifies any address information, even if
the address is a mall or a hospital, and the address showing in Escambia’s billing portal for
verification is the mailing address and not the physical address. Thus the Agency’s database for
Escambia does not correlate residency in Escambia with bills sent to Escambia for payment.
Under Section 12, the State is mandating Escambia to pay for Medicaid services rendered to
non‐Florida residents.
c. Manatee County, Florida (“Manatee”). Manatee has consistently received
bills for residents of Sun City Center, Florida, which is located in Hillsborough County.
Rightfully, Manatee has refused to pay such bills. Manatee has informed the Agency of its
reasons for denial. This is Manatee’s most frequent billing error, and Manatee has disputed it
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over and over again, which consumes many hours of staff time. However, the Agency
continues to bill Manatee for the residents of Hillsborough County based upon the flawed
computer database. The Agency has also billed Manatee repeatedly for a patient in 2004 and
2005 whose Medicaid proof of residency showed the patient’s address as a nursing home
facility in Sarasota County. Rightfully, Manatee has refused to pay such bills. Manatee has
informed the Agency of its reasons for denial, and repeatedly requested correction of the error.
However, the Agency has been nonresponsive to repeated requests to provide “proof of
residency” when Manatee identifies patient addresses in other counties. This history of flawed
information in the database leads Manatee to believe that it will continue to be billed in the
future based on incorrect and flawed information.
d. Marion County, Florida (“Marion”). Marion has experienced an average
error rate of 51% on nursing home bills and 37% on hospital bills. The majority of errors are
invalid addresses. Marion routinely denies claims for people residing in Citrus, Lake, Sumter
and Martin Counties. In addition, during review of some old and stale claims, Marion has
determined the claim has been paid and is a duplicative bill.
e. Indian River County, Florida (“Indian River”). Indian River audited 10
months of bills and noted that there were zero dollars in Medicaid claims at the Indian River
Medical Center, its largest medical facility, which clearly indicates problems with the billing
system.
f. Sarasota County, Florida (“Sarasota”). Sarasota’s records reflect over 40%
of the nursing home billing addresses and nearly 24% of the hospital/HMO billing addresses
could not be verified as residential addresses in Sarasota County. Rightfully, Sarasota has
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refused to pay such bills. Sarasota has informed the Agency of its reasons for denial, which
include: (i) the address was not physically located in Sarasota County; (ii) the listed address was
for a nursing home or rehabilitation center; (iii) the address was for a post office box; (iv) the
address was illegible or incomplete; and (v) there was no actual residential address. As an
example of one of Sarasota’s incorrect billings, one invoice related to a Medicaid recipient who
lived on Whitfield Avenue. Map verification of this address by Sarasota revealed that the
address on Whitfield Avenue was actually located in Manatee County.
Section 12
34. In its 2012 Regular Session, the Florida Legislature passed House Bill 5301 (the
“Bill”) by less than a two‐thirds majority of the Senate and of the House of Representatives. The
vote of House members was 73‐36, and the vote of Senate members was 23‐17, as reflected on
the Bill vote sheets, a true and correct copy of which is attached as Exhibit C.
35. On or about March 29, 2012, the Governor signed the Bill into law, and the Bill is
now designated as chapter 2012‐33, Laws of Florida (Ex. A).
36. Chapter 2012‐33 is a general law and an act relating to State healthcare services.
Section 12 of chapter 2012‐33 amends section 409.915, Florida Statutes, related to county
contributions to Medicaid.
37. Section 12 creates new methods for attributing State Medicaid costs to counties,
creates a new method for collecting payment for past Medicaid services, and creates a new
payment method for future billings beginning May 1, 2102. The significant changes to the Prior
Law are:
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a. Section 12 revises the methodology for determining a county’s eligible
recipients by basing such information on the federally approved Medicaid eligibility system
within DCF.
b. Section 12 eliminates the cooperative nature of the billing process
between counties and the Agency. Now, Agency’s initial bill will be a final bill, subject only to
an as‐yet‐undeveloped Agency refund process to address billing errors.
c. Section 12 requires the Agency to certify to each county the amount of
such county’s unpaid billings from November 1, 2001, through April 30, 2012 (the “Prior
Unpaid Amounts”). The Prior Unpaid Amounts extend back more than ten years.
d. Section 12 provides that counties may challenge the Prior Unpaid
Amounts in an administrative process under chapter 120, Florida Statutes. Counties that do not
challenge the Prior Unpaid Amounts shall pay only 85% of that county’s Prior Unpaid
Amounts. Counties that prove by a preponderance of the evidence that the Prior Unpaid
Amounts were incorrect will be entitled to a credit on future payments.
e. Section 12 implements a “payment plan” in order to pay for the Prior
Unpaid Amounts. Over a five year period beginning October 1, 2012, the Department will
deduct from each county’s monthly distribution pursuant to section 218.26, Florida Statutes (the
“County Revenue Sharing Funds”), that county’s portion of the Prior Unpaid Amounts as
certified by the Agency on August 1, 2012. The Department must leave sufficient County
Revenue Sharing Funds to service outstanding debt secured by such funds.
f. Section 12 provides that, beginning May 7, 2012, and continuing on the
7th day of each month thereafter, the Department will deduct from each county’s distribution
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pursuant to section 218.61, Florida Statutes (the “Half Cent Sales Tax Funds”), that county’s
monthly share of Medicaid reimbursement as certified by the Agency on the 1st day of each
month (the “Future Billings”). The Department must leave sufficient Half Cent Sales Tax Funds
to service outstanding debt secured by such funds. (Henceforth, the complaint uses the term
“State Shared Revenues” to refer collectively to the Half Cent Sales Tax Funds and the County
Revenue Sharing Funds.)
g. Section 12 provides that counties may contest Future Billings by
requesting a refund under a process to be determined by the Agency, the Department, and
FAC. If the Agency determines the refund request is appropriate, the Department may refund
the amount to the county from the General Revenue Fund or issue the refund in the form of a
credit against the Future Billings.
38. Notwithstanding the history of multiple billing errors, Section 12 requires county
Medicaid payments—as certified by the Agency—to be deducted by the Department in their
entirety from State Shared Revenues. Under Section 12, corrections occur only if the county
proves the billing to be erroneous in an administrative proceeding.
Financial Effects of Section 12
39. Counties are allowed to pledge certain portions of the State Shared Revenues for
the payment of principle or interest on county debt obligations. See §§ 218.64(2) and 218.25(1),
(2) and (4), Fla. Stat. (2011).
40. On April 10, 2012, Moody’s Investor Service issued a Sector Comment entitled
“New State Withholding for Medicaid Costs is Credit Negative for Florida Counties,” a true
and correct copy of which is attached as Exhibit D. Moody’s notes that the new law “has
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negative credit implications for Florida Counties.” According to Moody’s, the new law
“weakens available revenue to service sales tax bonds and non‐ad valorem obligations.”
Recognizing that the State has reduced the percentage of tax revenues it will share with
counties, Moody’s observes that county revenues are expected to fall by a total of $75 million in
the first year, and between $30 million and $60 million over the four remaining years. Moody’s
also notes that the “lost revenues add another financial strain on counties already challenged by
waning property tax and other operating revenues.” While recognizing that the new law
contains some protections for outstanding bond obligations, Moody’s concludes that “the
increased withholdings of counties’ sales tax revenues will invariably reduce debt service
coverage and bonding capacity.”
41. By mandating Medicaid bills be deducted from State Shared Revenues, the
Legislature has diverted county revenues that could be pledged to service debt obligations.
42. Although Section 12 addresses existing bonds, the flexibility of the Counties to
solve local problems has been diminished by mandating the use of the State Shared Revenues to
pay Prior Unpaid Amounts and Future Billings.
43. The effective date of Section 12 falls halfway through the Counties’ fiscal year,
and will detrimentally impact these current county budgets, beyond health care funding.
Grounds for Declaratory Relief
44. The rights, status, and legal relations of the Counties and the non‐plaintiff
member‐counties of FAC are or will be affected to a material degree by Section 12, and the
Counties and FAC, on behalf of its non‐plaintiff member‐counties, are in doubt as to their rights
and obligations thereunder.
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45. The Counties and FAC, on behalf of its non‐plaintiff member‐counties, seek the
Court’s determination as to the validity and construction of Section 12; a declaration of this
Court as to their respective rights, status, and equitable and legal relations thereunder; and
other supplemental or alternative relief.
46. There is a bona fide, actual, present, and practical need for a declaration of the
validity and binding effect, if any, of Section 12. The requested declaration deals with a present
and ascertained or ascertainable state of facts, and the rights, powers, and obligations of the
Counties and the non‐plaintiff members of FAC are dependent upon the application of Section
12 to those facts.
47. The Counties and FAC, on behalf of its non‐plaintiff member‐counties, have an
actual, current interest that is adverse and antagonistic to the interests of the Department and
the Agency with respect to rights and obligations under Section 12.
48. All adverse and antagonistic interests with respect to the construction and
validity of Section 12 are before the Court.
49. The Counties and FAC, on behalf of its non‐plaintiff member‐counties, are
entitled to have their doubt removed and are entitled to a declaration from this court regarding
whether Section 12 is binding on counties in the State and valid under the Florida Constitution.
50. The relief sought is not merely the giving of legal advice or the answer to
questions propounded from curiosity, but rather is necessary to resolve an actual, current,
justiciable controversy between the plaintiffs and the defendants.
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Count I
Section 12 Is Unconstitutional under Article VII, Section 18(c)
51. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1
through 50 above.
52. Article VII, section 18(c) of the Florida Constitution provides (emphasis added):
(c) Except upon approval of each house of the legislature by two‐thirds of the membership, the legislature may not enact, amend, or repeal any general law if the anticipated effect of doing so would be to reduce the percentage of a state tax shared with counties and municipalities as an aggregate on February 1, 1989. The provisions of this subsection shall not apply to enhancements enacted after February 1, 1989, to state tax sources, or during a fiscal emergency declared in a written joint proclamation issued by the president of the senate and the speaker of the house of representatives, or where the legislature provides additional state‐shared revenues which are anticipated to be sufficient to replace the anticipated aggregate loss of state‐shared revenues resulting from the reduction of the percentage of the state tax shared with counties and municipalities, which source of replacement revenues shall be subject to the same requirements for repeal or modification as provided herein for a state‐shared tax source existing on February 1, 1989.
53. The anticipated effect of Section 12 is to reduce the percentage that counties
receive of State taxes which are shared with counties and municipalities as an aggregate on
February 1, 1989.
54. Section 12 directly and negatively impacts two State programs that require the
State to share tax revenues with counties. The first is the Revenue Sharing Act of 1972
(“Revenue Sharing Act”). The second is the Local Government Half‐Cent Sales Tax (“Half Cent
Sales Tax Act”).
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55. Under the Revenue Sharing Act, the State shares a portion of cigarette tax
collections and sales and use tax collections. Under the Half‐Cent Sales Tax Act, the state shares
a portion of sales and use tax collections.
56. Distributions of State Shared Revenues to counties are made on a monthly basis
pursuant to formulas established in sections 218.23 and 218.62, Florida Statutes, respectively.
57. Distributions to counties under the Revenue Sharing Act are made as a series of
“entitlement” revenues. § 218.21(5),(6),(7) and (10), Fla. Stat. (2011).
58. Distributions to counties under the Half‐Cent Sales Tax Act are deemed county
revenues. § 218.64, Fla. Stat. (2011).
59. Section 12 reduces the distribution of County Revenue Sharing Funds as follows:
“Beginning with the 2012 distribution the Department of Revenue shall reduce each county’s
distribution pursuant to s. 218.26 by one thirty‐sixth of the amount certified by the agency . . .”
(emphasis added).
60. Section 12 will result in the aggregate loss of $325.5 million in County Revenue
Sharing Funds.
61. Section 12 also reduces the distribution of Half‐Cent Sales Tax Funds as follows
(emphasis added):
Beginning May 1, 2012, and each month thereafter, the agency shall certify to the Department of Revenue by the 7th day of each month the amount of the monthly statement rendered to each county pursuant to subsection (4). Beginning with the May 2012 distribution, the Department of Revenue shall reduce each county’s monthly distribution pursuant to s. 218.61 by the amount certified by the agency minus any amount required under paragraph (b). The amounts by which the distributions are reduced shall be transferred to the General Revenue Fund.
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62. Section 12 will result in an anticipated aggregate loss to counties from the Half‐
Cent Sales Tax Funds of $289.4 million annually.
63. There has been no enhancement of the impacted State tax sources enacted since
February 1, 1989, which would negate the requirement that the Legislature pass Section 12 by at
least a two‐thirds majority.
64. There have been no fiscal emergencies declared by joint proclamation issued by
the President of the Senate and Speaker of the House of Representatives that would negate the
requirement that the Legislature pass Section 12 by at least a two‐thirds majority.
65. The Legislature has not provided additional state‐shared revenues which are
anticipated to be sufficient to replace the anticipated aggregate loss of state‐shared revenues
resulting from the reduction of the Counties’ percentage of the state taxes pursuant to Section
12.
66. None of the exemptions set forth in article VII, section 18(d) of the Florida
Constitution apply to Section 12.
WHEREFORE, the plaintiffs respectfully request that this Court issue its final judgment
(i) declaring that pursuant to article VII, section 18(c) of the Florida Constitution, Section 12 is a
general law that the Legislature may not enact without a two‐thirds majority in both the Senate
and House of Representative and, therefore, is invalid; (ii) declaring that the Department cannot
lawfully withhold from a county any state funds to which the county may be entitled; (iii)
enjoining the Agency and the Department from enforcing or otherwise implementing Section
12; (iv) providing such additional and supplemental relief as the court deems just and proper,
including costs of this action.
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Count II
Section 12 Is Not Binding on Counties Under Article VII, Section 18(a)
67. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1
through 50 above.
68. Article VII, section 18(a) of the Florida Constitution provides (emphasis added):
(a) No county or municipality shall be bound by any general law requiring such county or municipality to spend funds or to take an action requiring the expenditure of funds unless the legislature has determined that such law fulfills an important state interest and unless: funds have been appropriated that have been estimated at the time of enactment to be sufficient to fund such expenditure; the legislature authorizes or has authorized a county or municipality to enact a funding source not available for such county or municipality on February 1, 1989, that can be used to generate the amount of funds estimated to be sufficient to fund such expenditure by a simple majority vote of the governing body of such county or municipality; the law requiring such expenditure is approved by two‐thirds of the membership in each house of the legislature; the expenditure is required to comply with a law that applies to all persons similarly situated, including the state and local governments; or the law is either required to comply with a federal requirement or required for eligibility for a federal entitlement, which federal requirement specifically contemplates actions by counties or municipalities for compliance.
69. Section 12 requires counties to expend funds or take an action requiring the
expenditure of funds in at least four ways:
a. Section 12 requires counties to reimburse the State for disputed Medicaid
billings that extend beyond the four‐year statute of limitations prescribed in sections 95.11(3)(f)
or (p), Florida Statutes.
b. Section 12 will cause counties to expend additional funds for higher
interest rates on revenue bonds where the revenue source pledged for payment of the bonds
comes from the State Shared Revenues. However, this change is so recent that no bonds have
been issued pledging the State Shared Revenues since Section 12 was enacted.
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c. Section 12 will cause those counties that have been historically overbilled
to expend additional funds and utilize additional personnel and resources to challenge
erroneous Prior Unpaid Amounts in a formal administrative hearing process under chapter 120,
Florida Statutes.
d. Section 12 mandates each county to pay a share of Future Billings that
may not be a valid obligation.
70. Withholding State Shared Revenues to pay Medicaid bills is the equivalent of
mandating counties to expend those funds.
71. In passing Section 12, the Legislature did not make a determination that such law
fulfills an important state interest.
72. Section 12 is not a law either required to comply with a federal requirement or
required for eligibility for a federal entitlement, as contemplated in the exception set forth in
article VII, section 18(a) of the Florida Constitution.
73. None of the exemptions set forth in article VII, section 18(d) of the Florida
Constitution applies to Section 12.
WHEREFORE, the plaintiffs respectfully request that this Court issue its final judgment
(i) declaring that, pursuant article VII, section 18(a) of the Florida Constitution, counties are not
bound by Section 12; (ii) declaring that the Department cannot lawfully withhold from a county
any state funds to which the county may be entitled; (iii) enjoining the Agency and the
Department from enforcing or otherwise implementing Section 12; and (iv) providing such
additional and supplemental relief as the Court deems just and proper, including costs of this
action.
Page 23 of 24
Count III
Section 12 Is Invalid to the Extent It Seeks to Revive Time‐Barred Claims for Prior Unpaid Amounts
74. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1
through 50 above.
75. Section 12 provides a mechanism for collection of the Prior Unpaid Amounts
from each county in the amount certified by the Agency.
76. The Prior Unpaid Amounts represent the Medicaid reimbursement amounts the
State has not collected from the counties for each billing period from November 1, 2001,
through April 30, 2012.
77. Under the Prior Law, the State was required to initiate legal action on a claim to
recover any Prior Unpaid Amounts within four years after the claim accrued. See § 95.11(3)(f),
(p), Fla. Stat. (2011); see also § 95.11(6), Fla. Stat. (2011)
78. The Stateʹs claim for the Prior Unpaid Amounts attributable to each periodic
billing accrued at the time the county failed to make timely payment for the amounts billed to
the county.
79. The State has not timely filed any legal action for Prior Unpaid Amounts
accruing before March 29, 2008.
80. The Counties had a constitutionally protected property interest in a statute of
limitations defense against untimely claims for Prior Unpaid Amounts.
81. The Legislature has no authority to revive expired claims for Prior Unpaid
Amounts, as they were time‐barred at the time Section 12 took effect on March 29, 2012.
Page 24 of 24
82. Section 12 unconstitutionally deprives the Counties of their protected property
interest in a statute of limitation defense against Prior Unpaid Amounts accruing before March
29, 2008.
WHEREFORE, the plaintiffs respectfully request that this Court enter its final judgment
(i) declaring Section 12 invalid to the extent it revives the State’s right to seek payment based on
any Prior Unpaid Amounts accruing prior to March 29, 2008; (ii) ordering the Department and
the Agency not to implement or enforce Section 12 with respect to Prior Unpaid Amounts
accruing prior to March 29, 2008; and (iii) providing such additional and supplemental relief as
the court deems just and proper, including costs of this action.
RESPECTFULLY SUBMITTED this 26th day of April, 2012.
/s/ Susan H. Churuti Susan H. Churuti Fla. Bar No. 284076 Thomas B. Drage, Jr. Fla. Bar No. 173070 Bryant Miller Olive, P.A. One Tampa City Center, Suite 2700 Tampa, FL 33602 (813) 273‐6677 (813) 223‐2705 (fax) [email protected]
Virginia Saunders Delegal Fla. Bar No. 989932 General Counsel Florida Association of Counties 100 S. Monroe Street Tallahassee, FL 32301 (850) 922‐4300 (850) 488‐7192 (fax) gdelegal@fl‐counties.com Attorneys for Plaintiffs
