                   IN THE SUPREME COURT OF TENNESSEE
                              AT NASHVILLE
                                  October 7, 2009 Session

 HOME BUILDERS ASSOCIATION OF MIDDLE TENNESSEE, ET AL. v.
               WILLIAMSON COUNTY, ET AL.

           Appeal by Permission from the Court of Appeals, Middle Section
                      Chancery Court for Williamson County
                      No. 31384 Jeffrey S. Bivins, Chancellor




                No. M2008-00835-SC-R11-CV - Filed February 25, 2010


G ARY R. W ADE, J., dissenting.

        I respectfully dissent. Although I agree with the majority’s sound conclusion that
Williamson County was required to collect the new development tax at the time of the
application for the building permit, I disagree with the ruling that ultimate tax liability must
be based on the projected – rather than the actual – square footage of construction. I would,
therefore, hold that when the developer has paid a sum based on projected square footage and
later built a larger structure than initially anticipated, the County would be entitled to recover
the deficiency in payment. See Tenn. Code Ann. §§ 5-6-108(6) (2005), 9-3-202 (1999).

       In response to the increase in the demand for local governmental services incident to
the location of the General Motors Saturn Plant and the expansion of the Nashville
Metropolitan area beyond the boundaries of Davidson County, the General Assembly enacted
the Williamson County Adequate Facilities Tax, ch. 118, 1987 Tenn. Priv. Acts 238 (the
“Act”). The Act, which was ratified by the County, authorized the imposition of a tax on
new development “so as to ensure and require that the persons responsible for new
development share in the burdens of growth by paying their fair share for the cost of new and
expanded public facilities made necessary by such development.” Id. at § 3. While section
8 of the Act originally provided that the tax be payable “at the time of application for a
building permit for development . . . or, if a building permit is not required, at the time of
application for certificate of occupancy,” that section was amended in 1989 so as to require
the tax to be collected at the time of the application for the building permit. Act of March
13, 1989, ch. 22, § 3, 1989 Tenn. Priv. Acts 59, 60.

       The majority has concluded – I believe correctly – that under this post-1989 version
of the statute, the County would not have been permitted to delay its initial collection of the
tax until the issuance of the certificate of occupancy or a date thereafter. In my view,
however, the determinative question in this case is whether tax liability is based upon the
developer’s projection of square footage or the actual size of the construction. The 1989
Amendment to section 8 does not address the calculation of the tax. The method of
computation, unambiguously set forth in section 7 of the original Act, did not change:

       For the exercise of the privilege described herein, Williamson County may
       impose a tax on new development not to exceed

                      (a)    one dollar ($1.00) per gross square foot of new
                             residential development.

                      (b)    two dollars ($2.00) per gross square foot of new
                             non-residential development.

(Emphasis added.) It is my opinion that the term “gross square foot of new . . . development”
plainly refers to the square footage of the new development as built, and not the estimate
provided in the pre-construction plan. “[W]hen the import of a statute is unambiguous, we
discern legislative intent ‘from the natural and ordinary meaning of the statutory language
within the context of the entire statute without any forced or subtle construction that would
extend or limit the statute’s meaning.’” Hayes v. Gibson County, 288 S.W.3d 334, 337
(Tenn. 2009) (quoting State v. Flemming, 19 S.W.3d 195, 197 (Tenn. 2000)). Judicial
interpretation is restricted to the statutory language absent a lack of clarity in the express
terms. Roddy Mfg. Co. v. Olsen, 661 S.W.2d 868, 871 (Tenn. 1983).

       The majority points out that neither the developer nor the County can precisely
ascertain the ultimate tax liability unless construction proceeds in compliance with the plan.
I agree. Nevertheless, it is not unusual, in the realm of tax policy, for the taxpayer to pay an
estimate of liability at the outset and then to resolve any differences, whether more or less,
at a later date – such as the date of the issuance of a certificate of occupancy or the
completion of an audit. While one may contest the wisdom or efficiency of such a scheme,
courts should not disregard the statutory text merely because it is “unpleasant or peculiar,”
as long as it is not “manifestly absurd.” Seals v. H&F, Inc., __ S.W.3d __, __, 2010 WL
152185, at *10 (Tenn. 2010). Legislative purpose is a guiding principle, particularly in the
context of tax statutes. Nat’l Gas Distribs., Inc. v. State, 804 S.W.2d 66, 67 (Tenn. 1991).

       In my assessment, an interpretation of the statute placing a tax on the actual square
footage of development assures that every taxpayer pays only a fair share of the cost of local
governmental services – the express purpose of the tax. Williamson County Adequate

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Facilities Tax, ch. 118, 1987 Tenn. Priv. Acts at 242. A pre-construction projection would
not always serve that aim. Moreover, basing liability on actual square footage would not
only encourage a developer to honestly estimate the magnitude of the plan but at the same
time provide the flexibility for changes, with full awareness of any additional tax due. A
method of accountability is implicit in any tax legislation. I fear that our interpretation today
does not assure a principled allocation of the tax burden as envisioned by the terms of the
Act.

       Because I would have affirmed the judgment of the trial court and the ruling of the
Court of Appeals, I must respectfully dissent from the conclusion reached by the majority.




                                            ___________________________________
                                            GARY R. WADE, JUSTICE




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