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TALLAHASSEE (CBSMiami/NSF) – In what could be a first-of-its-kind case in Florida, an appeals court Wednesday ruled that a 2013 law repealing a tax exemption for affordable-housing projects is unconstitutional.

The Bay County case was filed by Panama Commons L.P., a non-profit limited partnership that built a 92-unit affordable housing project in Panama City. The partnership received a tax exemption for the 2012 tax year and applied for a renewal of the exemption for the 2013 tax year.

After the application was filed, the Legislature approved a measure to eliminate such tax exemptions for affordable-housing property owned by limited partnerships, according to the ruling by the 1st District Court of Appeal.

The repeal was approved to be retroactive to the 2013 tax roll.

Panama Commons filed a challenge, arguing that the retroactive repeal was unconstitutional.

A circuit judge agreed with the partnership, and the appeals court upheld that decision in a 2-1 ruling.

“Although the issue before us appears to be one of first impression, we believe the trial court correctly found the retroactive repeal of this tax exemption to be unconstitutional because it impaired a vested right and imposed a new tax obligation,” said the ruling, written by Judge Ronald Swanson and joined by Judge T. Kent Wetherell.

But Judge Robert Benton dissented, writing that the right to the property-tax exemption did not vest on Jan. 1, 2013.

“The language the Legislature used makes unmistakably clear its intent to repeal the tax exemption for 2013, the then-current tax year, which it was permitted to do,” Benton wrote. “The potentially confusing use of the word ‘retroactively’ does not alter the fact that the 2013 repeal applied to 2013 and to no prior tax year.”

“The News Service of Florida contributed to this report.”

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