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Florida Attorney General
Advisory Legal Opinion
Number: AGO 2001-67
date: September 21, 2001
Subject: Firefighters' and Police Officers' pension, premium tax
Mr. Donald T. Ryce
City of Winter Haven Labor Attorney
333 41st Street, Suite 714
Miami Beach, Florida 33140
RE: MUNICIPALITIES-FIREFIGHTERS-LAWS ENFORCEMENT OFFICERS-PENSIONS-
increase in benefits to general city employees may affect use of
premium tax income in providing "extra benefits" to firefighters and
police officers pensions. ss. 175.351 and 185.35, Fla. Stat.
Dear Mr. Ryce:
On behalf of the City of Winter Haven, you ask substantially the
following question:
If there is an increase in pension benefits for the city's general
employees but not a similar increase in benefits for the city's
firefighters and police officers who have a separate plan, how does
such an increase in benefits affect the use of the premium tax income
collected pursuant to Chapters 175 and 185, Florida Statutes?
In sum:
The Legislature has mandated that premium tax income must be used for
"extra benefits" for firefighters and police officers. Since the
Legislature has defined the term "extra benefits" as "benefits in
addition to or greater than those provided to general employees of
the municipality," an increase in benefits to the general city
employees will impact the use of the premium tax income since such
income may only be used to fund "extra benefits," that is, benefits
over and above those provided to general city employees.
According to your letter, the city is considering the possibility of
increasing pension plan benefits for its general employees without
making a corresponding increase in its police and firefighter pension
plans. You state that the city operates separate pension plans for
its police officers and its firefighters. Both are local plans that
were in effect in 1998.
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Chapters 175 and 185, Florida Statutes, respectively provide for
municipal and special district firefighters' and police officers'
pension plans. One source of funding of such plans is the net
proceeds from a state excise tax levied on property and casualty
insurance companies, known as the premium tax.[1]
In 1999, the Legislature revised Chapters 175 and 185, Florida
Statutes, to provide for uniform application of minimum standards and
benefits to all plans receiving funding under those chapters. [2]
Section 175.351, Florida Statutes, relating to local plans, was
reworded. As amended, section 175.351 authorizes the placement of the
premium tax income in the pension plan or in a separate supplemental
plan for the payment of extra benefits to firefighters, or to
firefighters and police officers where included. [3] A similar
provision is contained in section 185.35, Florida Statutes.
Section 175.351, Florida Statutes, provides in part:
"The premium tax provided by this chapter shall in all cases be used
in its entirety to provide extra benefits to firefighters, or to
firefighters and police officers, where included. However, local law
plans in effect on October 1, 1998, shall be required to comply with
the minimum benefit provisions of this chapter only to the extent
that additional premium tax revenues become available to
incrementally fund the cost of such compliance as provided in s.
175.162(2)(a). When a plan is in compliance with such minimum benefit
provisions, as subsequent additional premium tax revenues become
available, they shall be used to provide extra benefits. For the
purpose of this chapter, "additional premium tax revenues" means
revenues received by a municipality or special fire control district
pursuant to s. 175.121 that exceed that amount received for calendar
year 1997 and the term "extra benefits" means benefits in addition to
or greater than those provided to general employees of the
municipality. Local law plans created by special act before May 23,
1939, shall be deemed to comply with this chapter." (e.s.)
Section 185.35, Florida Statutes, contains substantially the same
language.
When the Legislature has prescribed the manner in which something
must be done, it effectively operates as a prohibition against its
being done in any other manner.[4] The statutes clearly limit the use
of the premium tax income to providing "extra benefits." While the
statutes recognize a limited exception for those plans in existence
in 1998 to come into compliance incrementally and only as additional
premium tax revenues become available, such funds may only be used to
provide extra benefits once the local plan is in compliance. The
statutes also define what constitutes "extra benefits," i.e.,
benefits in addition to or greater than those provided to general
employees of the municipality. Such a definition is controlling.[5]
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Accordingly, if the city increases benefits for its general
employees, the benefits formerly provided to the city's firefighters
and police officers by the premium tax income may no longer qualify
as "extra benefits."
Thus, the Legislature has mandated that premium tax income must be
used for "extra benefits" for firefighters and police officers and
has defined that term "extra benefits" as "benefits in addition to or
greater than those provided to general employees of the
municipality." Accordingly, an increase in benefits to the general
city employees will impact the use of the premium tax income since
such income may only be used to fund "extra benefits," that is,
benefits over and above those provided to general city employees.
Sincerely,
~2obert A. Butterworth
Attorney General
RAB/tjw
[1] See, s. 175.101, Fla. Stat., entitled "State excise tax on
property insurance premiums authorized; procedures," which authorizes
a municipality to assess and impose an additional excise tax on
property insurance companies in the amount of 1.85 percent of the
gross amount of receipts of premiums from policyholders on all
premiums collected on property insurance policies covering property
within the corporate limits of the municipality. And see, s. 175.101
(2), Fla. Stat., stating that in the case of multiple peril policies
with a single premium for both the property and casualty coverages in
such policies, 70 percent of such premium shall be used as the basis
for the 1.85 percent tax. Compare, s. 185.08(1), Fla. Stat.,
authorizing the imposition on casualty insurers of an additional
excise tax amounting to .85 percent of the gross receipts of premiums
collected on casualty insurance policies covering property within the
city's corporate limits; and s. 185.08(2), Fla. Stat., stating that
in cases of multiple peril policies within a single premium for both
property and casualty coverages, 30 percent of the premium shall be
used as the basis for the .85 percent tax.
[2] See, e. g., ss. 175.162 and 185.16, Fla. Stat.
[3] Section 175.351(1)(a) and (b), Fla. Stat.
[4] See, Alsop v. Pierce, 19 So. 2d 799, 805-806 (Fla. 1944); Dobbs
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v. Sea Isle Hotel, 56 So. 2d 341, 342 (Fla. 1952); Thayer v. State,
335 So. 2d 815, 817 (Fla. 1976).
[5] See, Racetrac Petroleum, Inc. v. Delco Oil, Inc., 721 So. 2d 376
(Fla. 5th DCA 1998) (where Legislature has used particular words to
define a term, court does not have the authority to redefine it); Op.
Att'y Gen. Fla. 85-98 (1985) (where a statute contains a definition
of a phrase, that meaning must be ascribed to the phrase whenever
repeated in the same statute, unless a contrary intent clearly
appears).
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