|Legal Opinion: |
Text of Document: November 4, 1996
You asked me to research whether your county's method of funding volunteer fire departments and contracting with municipal fire departments is illegal. I have reviewed the information that has been sent to me, including the agreements between the county and the respective fire departments, and the relevant attorney general opinions. Although the use of county general fund money to fund fire service exclusively outside of muncipalities is unfair to city residents, the scheme devised by the county appears to be authorized under Tennessee law.
The opinions rendered by the Tennessee Attorney General's Office have not been completely consistent, however, Tenn.Atty.Gen.Op. ("TAGO") No. U95-096 does adequately address the statutory law as it applies to your county's situation (I have attached a copy for your convenience). The opinion sets out the authority for the county's agreements with both "nonprofit, volunteer" fire departments [Tenn. Code Ann. § 5-9-101(23)] and with municipalities [Tenn. Code Ann. § 6-54-601(c)]. In addition, it distinquishes between the authority in these statutes and that for county wide fire service pursuant to Tenn. Code Ann. § 5-17-101. As the opinion correctly points out, the county is authorized to proceed under any of these statutes.
The only remaining issue is whether this statutory scheme is unconstitutional. Section 28, Article II of the Tennessee Constitution provides in part as follows:
Each respective taxing authority shall apply the same tax rate for all property within its jurisdiction.
An argument can be made that since county general fund money is being used to pay for services that city residents are not receiving, then the city residents are paying a higher tax rate. A similar issue was addressed by the Tennessee Supreme Court in King v. Sullivan County, 128 Tenn. 393, 160 S.W.2d 847 (1913); see also Albert v. Williamson County, 798 S.W.2d 758 (Tenn. 1990). In King, legislation authorized the county to levy a tax on all property in the county, including property within the city limits, for the purpose of building county roads exclusively outside the city limits. The plaintiff resided in the city and paid both city and county taxes. Plaintiff sought a ruling that the act violated Article II, Section 28 because it created a "unequal tax burden on city property."
The court rejected this argument upon the following rationale:
The uniformity required by section 28 of article 2 is limited to uniformity in rate, assessment, and valuation of the particular tax involved. It has no reference to a uniformity of the sum total of taxes which a citizen is required to pay; that is, it does not require that the total taxes assessed against property situated in a municipality shall not exceed the sum total of taxes assessed against property located outside the municipality. It does require that there should be uniformity of valuation and assessment of property for purposes of taxation, and that the tax levy for any given purpose shall be uniform throughout the territory to which it is applied.
King v. Sullivan County, 128 Tenn. 396,397, 160 S.W. 847.
The court also noted that the extra taxes that citizens of cities pay are to support the municipal government, and has no relation to the duty to support the state and county governments, "which afford him and his property equal protection with every other citizen whether they reside within the municipality or not." King, at 397, 160 S.W. 847. Therefore, there is clear precedent for upholding a county wide tax to pay for services that are provided exclusively outside municipality.
You may be aware that the Chancery Court for Bedford County struck down the funding of the county wide fire department there in 1993. City of Shelbyville v. Bedford County, # 17519. The court's conclusions indicate that it did not believe that the county could fund county wide fire service without tax districts for both statutory and constitutional reasons. In Bedford County, however, the county provided fire service directly to the non-city areas as opposed to financing volunteer non-profit and municipal fire departments. In addition, the opinion of the trial court is not a precedent that would be binding on any other state court.
Finally, there is an argument that the county has established these volunteer nonprofit fire departments and therefore is in fact providing a county wide fire department in violation of Tenn. Code Ann. § 5-17-101 et seq. Although for all practical purposes this may be true, I see two problems with this argument: (1) the nonprofit volunteer fire departments appeared to be separate legal entities; and (2) the county's agreements with municipal fire departments may thwart the argument that county is providing fire service "county wide."
I understand the unfair position that this arrangement places city residents in your county. Although the statutes discussed above may represent an unintended loophole, they clearly authorize the appropriation of county general fund money to nonprofit volunteer and municipal fire departments under the county's scheme. In my opinion, the best way (and probably only way) to correct this situation is through a change in the law by the General Assembly. I will be happy to discuss these issues with you at your convenience.
MTAS Legal Consultant
Supplementary note. Dennis Huffer, 8/29/2003:
T.C.A. § 5-17-101 was amended in 1999 to allow counties to use general fund revenues derived from situs based taxes derived from unincorporated areas of the county or from other revenue sources that had already been shared with the county's municipalities to finance countywide fire districts.