|Legal Opinion: |
Text of Document: July 17, 1992
You have asked two questions. Let me respond to the first question which concerns the authority of the City to require a commercial property owner whose property lies partly within and partly without the corporate limits, to comply with the City sign ordinance (Title 11, Chapter 20 of the the City Code).
Apparently, this commercial parcel straddles the County A/County B line but, the sign in question is situated inside the County line. The property is being taxed by both County A and the City. While not part of the corporate limits of County A , for the convenience and with the consent of the property owner at the time, the county assessors for both counties have agreed to redraw the "assessed boundary" for taxing purposes only, so that the county containing the largest portion of the parcel gets the taxes. Discussions with Mr. Kelsey Jones of the State Board of Equalization indicate that, according to this policy, if the smaller parcel were twenty-five acres or more the county assessors wouldn't make this "assessed boundary" adjustment and the property owner would have to pay taxes to both jurisdictions.
The question then is, if the property owner is paying the City taxes and County A taxes, and receiving services from the City, is the property owner also subject to the city's ordinances? In my opinion the answer is no.
The law is quite clear on the subject of extraterritorial application of zoning and other regulatory powers. A municipality receives its police power from a grant of the state legislature. The authority to enact zoning ordinances exists by virtue of the enabling statute found in Tennessee Code Annotated, § 13-7-201 through 13-7-410. This enabling statute provides for extraterritorial zoning and land use control only where the municipal planning commission has been designated as the regional planning commission with respect to territories outside of and adjacent to the municipality. Tennessee Code Annotated, § 13-7-301 et seq. the City Planning Commission has not been so designated.
There is no other specific grant of extraterritorial authority granted to municipalities that I am aware of. While grants of extraterritorial jurisdiction have generally been upheld, Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60, 99 S.Ct. 383, 58 L.Ed 292 (1978), such a grant must be express. Robertson V. City of Montgomery, 233 So.2d 69 (Ala. 1970); Smeltzer v. Messer, 311 Ky 692, 225 S.W. 2d 96 (1949); State v. Owen, 242 N.C. 525, 88 S.E.2d 832 (1955); 101A C.J.S. §21, page 98. See Rathkopf, The Law of Planning and Zoning, 4th Ed., Vol 4, § 25.02.
This property owner is paying taxes and receiving services from the City by virtue of an agreement between the tax assessors not made pursuant to any common law or statutory authority, but a long-standing policy of the assessors' of Tennessee. If the facts were slightly different, and the parcel outside the City were 25 acres or more, the City would only receive taxes on that portion of the property lying within the corporate limits of County A . They may be paying taxes to the City but this part of the parcel is not legally a part of the city.
If this mutually agreed upon "assessed boundary" adjustment were ever challenged, I'm not convinced the "assessed boundary" would be upheld. In fact, there is law to the contrary. It has been held, in Tennessee, that a municipality cannot tax land outside its territorial limits. Oneida v. Pearson Hardwood Flooring Co., 169 Tenn. 449, 88 S.W.2d 998 (Tenn. 1935). I also think it is likely the city would be sued for attempting to enforce this ordinance on the basis of a rather arbitrary tax assessor policy. In McQuillen, Municipal Corporations, 3rd Ed, Vol. 17, § 50.11, p.396 the following statement is made:
... an action in the nature of quo warranto will lie against a municipal corporation when it usurps or unlawfully exercises a franchise not granted by its charter or by statute, as in the case where it attempts to govern and tax inhabitants beyond its boundaries, or to tax lands to which no municipal benefit accrues.
While I would agree that since the property receives the benefits of the City's services it should be subject to the burdens of complying with its laws and regulations, the fortuity of this tax assessors agreement is simply not sufficient authority for the City to "govern outside its boundary".
Your second question concerns a similar factual situation. There is a subdivision located partially within and partially outside the City on the County A/County B line. Again, the property owners are apparently paying County A taxes under an assessed boundary agreement between the county assessors. You want to know whether the City can also receive property taxes from these non-residents in exchange for municipal services, particularly police and fire protection.
If the assessed boundary of these parcels have, in fact, been redrawn, pursuant to an agreement between the assessors, and County A receives the property taxes, it seems to me that the City should also be receiving property taxes from them. I think it advisable to look at the tax plat or tax record and determine whether the boundary has been "adjusted." If so, you should be able to treat these parcels similar to the parcel that straddles the boundary line. I don't know how parcels located entirely within County B can be paying County A taxes except that the subdivision must have been subject to one of these assessors agreements prior to being subdivided and developed. With which jurisdiction did the developers file a subdivision request?
If the parcels are subject to a mutually agreed upon "assessed boundary" adjustment, I think the City simply needs to discuss the matter with the County A assessor's office and make arrangements to receive the municipal property tax. Obviously, receipt of taxes would require you to provide municipal services. (See McQuillen statement above.) However, these non-residents would still be outside the jurisdiction of the City in terms of its police power or regulatory authority.
Thanks for asking MTAS to help. I apologize for the delay in responding to this "unique" question.