John R. Hernandez - Page 5

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               Although Florida ad valorem taxes and special assessments              
          are conceptually distinct, the Florida legislature contemplates             
          their joint collection.3  Florida statutory law, which governs              
          the collection of ad valorem taxes and the sale of tax                      
          certificates, provides that special assessments may be collected            
          in the same manner as ad valorem property taxes.  Fla. Stat. Ann.           
          sec. 197.363 (West 1989 & Supp. 1998).  In order to be validly              
          collected in the same manner as ad valorem property taxes,                  
          special assessments must be subjected to all collection                     
          provisions of chapter 197, including, among others, the issuance            
          of tax certificates and tax deeds for nonpayment.  Consequently,            
          an unpaid tax bill subject to sale of a tax certificate may                 
          include both ad valorem taxes and special assessments.                      
          II. Tax Certificates Not Issued by Florida or Political                     
               Subdivision in the Exercise of Sovereign Borrowing Power               
               In Hernandez I, we held that interest earned on a Florida              
          tax certificate is not excluded from petitioner's gross income              
          under section 103.   We held that a Florida tax certificate is              
          not an obligation of the State of Florida or a political                    
          subdivision for purposes of section 103(c), because it is not               
          issued by a municipality as an exercise of its sovereign                    
          borrowing power.  Whether the interest earned on a Florida tax              

               3  See City of Boca Raton v. State, 595 So. 2d 25, 29 (Fla.            
          1992) (a legally imposed special assessment is not a tax and may            
          be imposed by a municipality without violating the Florida                  
          Constitution's reservation of all taxation powers, other than ad            
          valorem taxes, to the State).                                               




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