ST.LUCIECOUNTY,FLORIDA; SUWANNEECOUNTY,FLORIDA; TAYLORCOUNTY,FLORIDA; VOLUSIACOUNTY,FLORIDA; WAKULLACOUNTY,FLORIDA;and WALTONCOUNTY,FLORIDA;allofwhichare politicalsubdivisionsoftheStateofFlorida;and theFLORIDAASSOCIATIONOFCOUNTIES, INC.,anotforprofitcorporationestablishedunder Floridalaw, Plaintiffs, vs.

vs. ELIZABETHDUDEK,inherofficialcapacityas SECRETARYoftheSTATEOFFLORIDA,AGENCY FORHEALTHCAREADMINISTRATION;and LISAVICKERS,inherofficialcapacityas EXECUTIVEDIRECTORoftheSTATEOF FLORIDA,DEPARTMENTOFREVENUE, Defendants. _____________________________________________/ COMPLAINTFORDECLARATORYJUDGMENT ANDSUPPLEMENTALRELIEF Plaintiffs, Alachua County, Florida; Bay County, Florida; Bradford County, Florida; Broward County, Florida; Charlotte County, Florida; Clay County, Florida; Collier County, Florida; DeSoto County, Florida; Dixie County, Florida; Escambia County, Florida; Flagler County, Florida; Franklin County, Florida; Gulf County, Florida; Hamilton County, Florida; Hardee County, Florida; Hendry County, Florida; Hernando County, Florida; Highlands County, Florida; Hillsborough County, Florida; Lafayette County, Florida; Lake County, Florida; Lee County, Florida; Leon County, Florida; Levy County, Florida; Manatee County, Florida;MarionCounty,Florida;MartinCounty,Florida;MiamiDadeCounty,Florida;Monroe Page2of24

County, Florida; Nassau County, Florida; Okaloosa County, Florida; Okeechobee County, Florida;OsceolaCounty,Florida;PascoCounty,Florida;PinellasCounty,Florida;PolkCounty, Florida; Putnam County, Florida; Santa Rosa County, Florida; Sarasota County, Florida; Seminole County, Florida; St. Johns County, Florida; St. Lucie County, Florida; Suwannee County,Florida;TaylorCounty,Florida;VolusiaCounty,Florida;WakullaCounty,Florida;and WaltonCounty,Florida(collectively,theCounties);andtheFloridaAssociationofCounties (FAC),suetheDefendants,LisaVickers,inherofficial capacityasExecutiveDirectorofthe State of Florida, Department of Revenue (the Department); and Elizabeth Dudek, in her officialcapacityasSecretaryoftheStateofFlorida,AgencyforHealthCareAdministration(the Agency),andallege: 1. In 1990, Florida voters amended their state constitution by adding article VII,

section18(theUnfundedMandatesProvision).Thisnewconstitutionalprotectionlimitsthe abilityofthelegislatureoftheState ofFlorida (theState)to impose unfunded mandates on counties. This constitutional limit was designed not to hamstring the State legislature (the Legislature), but to require thoughtful and deliberate action, as well as overwhelming support, before the State can require counties to pay for a State mandate. Such mandates threaten to increase taxes and to remove local dollars from communities; therefore, the UnfundedMandatesProvisionrequiresapprovalbyasupermajorityvoteineachhouseofthe Legislature.Atitscore,articleVII,section18,ensuresthat,absentextraordinaryactionbythe Legislature,localtaxpayerdollarswillbeusedtopayforlocal,notstatewide,desiresandneeds.

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2.

In 2012, the Legislature violated this constitutional protection and enacted

chapter 201233, Laws of Florida, a true and correct copy of which is attached as Exhibit A. Section 12 of this new law (Section 12) is precisely the type of general law that article VII, section18,wasdesignedtoprevent.Withouttheconstitutionallyrequiredsupermajorityvote, theLegislaturecreatednewmethodsandmandatesforbillingtheStatesoldandstaleMedicaid coststocountiesbyautomaticallywithholdingthecountiesshareofcertainstatetaxrevenues beforedistribution.Indoingso,Section12shiftstheburdenofafundamentallyflawedbilling schemetolocaltaxpayers.Throughthiserrorriddenscheme,theStateiscoercingcountiesinto paying for lawfully timebarred back bills, as well as new Medicaid obligations, that cannot rightfullybetracedtotheircommunities.Thisattemptisaprimeexampleofrequiringuseof localtaxdollarsforstatewideinterestsanddesires.UnderSection12,countieswillbeimpacted by this new billing scheme beginning May 7, 2012. Starting then, the State will begin withholdingtaxrevenuesharesfromthecountiestopayforbillsthatshouldbepaidbyothers. 3. ThissuitdoesnotchallengewhethercountiesshouldparticipatewiththeStatein

makingitsMedicaidpayments.Thatpolicydecisionwasmadelongago.Rather,countieswant topaytheirfairandaccurateshareoftheMedicaidbillsonbehalfoftheirresidents,whichthey have been prevented from doing because the State billing system is plagued with rampant errors.Countiesdonotwanttheirtaxrevenueshareautomaticallyraidedtopaybillsunderthe new scheme enacted by Section 12. The Counties ask this Court to enforce their state constitutionandtorequiretheLegislaturetoplaybytherulesbeforeattemptingtoreducethe amountoftaxrevenuesreturnedtothepeople.

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4.

The Counties intend to seek an immediate order to prevent the State from

withholding amounts due to be disbursed to the Counties beginning on May 7, 2012. In addition, they seek an expedited declaration from this Court that the Unfunded Mandates Provisionhasbeenviolated. JurisdictionandVenue This is an action for declaratory judgment and supplemental relief, including

5.

injunctiverelief,pursuanttochapter86,FloridaStatutes,seekingadeclarationthatSection12is unconstitutional,invalid,andunenforceable. 6. The plaintiffs request that the Court expedite consideration of this action

pursuant to section 86.111, Florida Statutes, which authorizes the Court to order a speedy hearingofanactionforadeclaratoryjudgmentandadvanceitonthecalendar. 7. This Court has jurisdiction pursuant to article V, section 5, of the Florida

Constitution,andsections26.012and86.011,FloridaStatutes. 8. VenueisproperinLeonCountyundersection47.011,FloridaStatutes,because

theAgencyandtheDepartmentmaintaintheirprincipalheadquartersinLeonCounty,Florida. 9. The plaintiffs have served a copy of this complaint on the Attorney General of

theStateandfiledtheirnoticeofcompliancewithsection86.091,FloridaStatutes,andFlorida RuleofCivilProcedure1.071. 10. All conditions precedent to the initiation and maintenance of this action have

occurred,havebeenperformed,orhaveotherwisebeenwaived.

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Parties 11. TheCountiesareallpoliticalsubdivisionsoftheState,existingunderarticleVII,

of the Florida Constitution and chapter 7, Florida Statutes.1 The 47 Counties residents constituteapproximately76%oftheStatestotalpopulation. 12. FAC is a statewide association and notforprofit corporation organized and

operating under chapter 617, Florida Statutes, for the purpose of representing county government in the State and protecting, promoting, and improving the mutual interests ofall countiesintheState.AmongtheexpresspurposesforwhichFACwasorganizedisdefending the rights . . . of county government under any constitutional provision [and] statute . . . . Currently,66ofthe67countiesintheStatearemembersofFAC. 13. Elizabeth Dudek is the Secretary of the Agency, an agency of the State, created

andoperatingundersection20.42,FloridaStatutes.Sheissuedinherofficialcapacityonly,and notpersonally. 14. LisaVickersistheExecutiveDirectoroftheDepartment,anagencyoftheState,

createdandoperatingundersection20.21,FloridaStatutes.Sheissuedinherofficialcapacity only,andnotpersonally. 15. Section 12 grants the Agency and the Department certain authority and

responsibilityforenforcingandotherwiseimplementingitsterms.

Alachua County, Broward County, Charlotte County, Clay County, Hillsborough County,LeeCounty,LeonCounty,MiamiDadeCounty,OsceolaCounty,PinellasCounty,Polk County, Sarasota County, Seminole County, Volusia County, and Wakulla County are all charter counties, operating under their respective charters. The remaining Counties are non chartercounties. Page6of24

GeneralAllegations TheMedicaidProgram 16. Medicaid is a governmental program that provides medical and healthrelated

services to specific groups of people in the United States, including the State of Florida. Medicaidwasenactedin1965underTitleXIXoftheSocialSecurityAct.Medicaidisameans testedsocialprotectionprogramforcertainindividualsandfamilieswithlowincomesandfew resources. Medicaid is financed through joint federal and state funding and administered by eachstate. 17. At the federal level, Medicaid is managed by the Centers for Medicare and

MedicaidServices(CMS),adivisionoftheU.S.DepartmentofHealthandHumanServices. Primaryoversight ofthe program is handled atthefederallevel, but eachstateestablishesits owneligibilitystandards;determinesthetype,amount,duration,andscopeofservices;setsthe rateofpaymentforservices;andadministersitsownMedicaidprogram. 18. Each state operates its own Medicaid program under a state plan that must be

approved by CMS, under which a state reimburses providers of medical assistance to eligible individuals. The state plan outlines current Medicaid eligibility standards, policies and reimbursementmethodologiestoensurethestateprogramreceivesmatchingfederalfunds. 19. 20. InFlorida,theAgencyisresponsiblefortheadministrationofMedicaid. FederallawrequirestheAgencytohaveandmaintainacomputersystem,which

isknownastheMedicaidManagementInformationSystem(MMIS).TheMMISisintended to control and administer the Medicaid program. A private contractor acts as the Agencys

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fiscalagentandoperatestheMMISpursuanttoacontractthatbeganonMay1,2006,andends onJanuary31,2013. 21. TheDepartmentofChildrenandFamilies(DCF)actsastheAgencysagent

by enrolling people in Medicaid. DCF performs this Medicaid eligibility function using a separatecomputersystemandaseparateprivatecontractor. 22. Medicaid serves approximately 3 million people in Florida, over half of whom

are 20 years of age or younger. Estimated expenditures for fiscal year 20112012 are approximately $20 billion. The federal government will pay approximately 56% of these expenditures,andFloridawillpayapproximately44%. 23. The State is responsible to the federal government for the full portion of the

States share of Medicaid costs. However, the State also charges counties for certain items of careandserviceasprovidedinsection409.915,FloridaStatutes(2011)(thePriorLaw). ThePriorLaw 24. UnderthePriorLaw,countieswererequiredtosetasidesufficientfundstopay

for items of care and service provided to the countys eligible recipients for whom county contributions are required, regardless of where in the state the care or service is rendered. 409.915(3),Fla.Stat.(2011). 25. Under the Prior Law, county contributions were to be based on statements

renderedbythe[A]gencyinconsultationwiththecounties.409.915(4),Fla.Stat.(2011). 26. Under the Prior Laws consultation requirement, the final bill was not to be

determinedsolelybytheAgency.TheAgencyprovidedeachcountywithamonthlylistingof

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residents whose Medicaid costs the county was responsible for paying. Each county was allowed to review the Medicaid billings provided by the Agency. Each county reviewed the informationtoverifytheindividualscountyofresidenceandtodeterminewhetherthebillwas accurate. If a county determined that the bill was correct, it remitted payment to the Agency andsuchfundsweredepositedintotheStatesGeneralRevenueFund.Ifacountydetermined thechargescontainedinthebillwereincorrect,thecountydeniedsuchportionofthebilland returnedittotheAgency.SeeFla.H.R.Approp.Comm.,HB5301(2012)StaffAnalysis6(final March19,2012)(theFinalStaffAnalysis),attachedasExhibitB.TheAgencyresearchedeach rejected bill and either provided the county with additional documentation supporting its determinationoridentifiedtheappropriatecountytobebilled.Thisprocesscontinueduntilthe billwaspaidbytheappropriatecountyortheAgencydeterminedthecostcouldnotbebilled toaspecificcounty. 27. Under the Prior Law, if a county failed to remit payment within 60 days, the

State was authorized to withhold the countys cigarette tax receipts or any other funds distributed to the county. 409.915(5), Fla. Stat. (2011). However, the counties were not requiredtopayMedicaidcontributionsfromanyparticularrevenuesource. 28. Under the Prior Law, the Agency issued many corrected billings and the

Counties paid them. Over the course of the past decade, however, some disputed billings remain uncorrected and uncollected due to an inadequate factual basis to support payment frompublicfunds.AlthoughCountiesarewillingtopaytheirfairshareforMedicaidservices received by their residents, they cannot in good faith make payments for bills that are clearly erroneousandlackingsupport.ThelackofconsistencywithregardtotheAgencysdirectionto Page9of24

the Counties on the billing process has been frustrating and time consuming. The Agency is currently processing invoices without any rules. As of December 31, 2011, uncollected Medicaidbillingsextendingfromfiscalyear2001tofiscalyear2011totaled$325.5million.See FinalStaffAnalysisat6(Ex.B). ExamplesofBillingProblems 29. The Agency has adopted new billing systems as part of MMIS, which has

worsenedtheproblems.Around2008,thefrequencyandtypeoferrorsexperiencedincreased dramaticallyandtheamountofcollectionsfromtheCountiesdecreasedsignificantly. 30. The data provided by the Agency to the Counties to support billings has been

flawedandnotoriouslyincorrect,andCountieshavehadtosignificantlyincreasethetimethey spendidentifyingandcorrectingtheseerrors. 31. The Counties have notified the Agency of the errors, including, but not limited

to:(a)billingfornoncountyresidents;(b)multiplebillingsforthesameevent;(c)billinghealth care provider costs at zero dollars; (d) billing incorrect rates; (e) bills containing incorrect addresses or addresses that do not physically exist; (f) billing for nonFlorida residents; (g) billingforservicesnotrendered;and(h)billsthatarefaciallyfraudulent. 32. Inaddition,theAgencyhasrequiredtheCountiestopayforerrorsbetweenthe

Agency and service providers rather than returning the financial responsibility back to those serviceproviders. 33. Below are a few specific examples of the many problems related to the States

Medicaidbillingsystem.

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a.

Alachua County, Florida (Alachua). Alachua appears first on an

alphabetical list of Florida counties. For this reason, apparently, the billing system automatically defaults to Alachuas county code (01) if an applicant for Medicaid fails to identifyadifferentcode.Asaresult,theAgencyregularlybillsAlachuaforservicesreceived bynonresidents.Rightfully,Alachuahasrefusedtopaysuchbills.Alachuahasinformedthe Agencyofitsreasonsfordenial,andtheAgencyhasacknowledgedbillingproblemsuniqueto Alachua. The Agency has assured Alachua that the MMIS billing problems have been corrected.However,allhistoricalbillscontinuetoreflecttheseerrors. b. Escambia County, Florida (Escambia). Escambia is contiguous with

EscambiaCounty,Alabama.EscambiaregularlyreceivesbillingsrelatedtoEscambiaCounty, Alabama. Rightfully, Escambia has refused to pay such bills. Escambia has informed the Agencyofitsreasonsfordenial,buttheAgencyhasyettocorrecttheoutofstatebillings.In fact,theAgencyhasadvisedthatnooneattheAgencyverifiesanyaddressinformation,evenif the address is a mall or a hospital, and the address showing in Escambias billing portal for verificationisthemailingaddressandnotthephysicaladdress.ThustheAgencysdatabasefor Escambia does not correlate residency in Escambia with bills sent to Escambia for payment. Under Section 12, the State is mandating Escambia to pay for Medicaid services rendered to nonFloridaresidents.

c.

ManateeCounty,Florida(Manatee).Manateehasconsistentlyreceived

bills for residents of Sun City Center, Florida, which is located in Hillsborough County. Rightfully, Manatee has refused to pay such bills. Manatee has informed the Agency of its reasonsfordenial.ThisisManateesmostfrequentbillingerror,andManateehasdisputedit Page11of24

over and over again, which consumes many hours of staff time. However, the Agency continues to bill Manatee for the residents of Hillsborough County based upon the flawed computerdatabase.TheAgencyhasalsobilledManateerepeatedlyforapatientin2004and 2005 whose Medicaid proof of residency showed the patients address as a nursing home facility in Sarasota County. Rightfully, Manatee has refused to pay such bills. Manatee has informedtheAgencyofitsreasonsfordenial,andrepeatedlyrequestedcorrectionoftheerror. However, the Agency has been nonresponsive to repeated requests to provide proof of residencywhenManateeidentifiespatientaddressesinothercounties.Thishistoryofflawed information in the database leads Manatee to believe that it will continue to be billed in the futurebasedonincorrectandflawedinformation.

d.

MarionCounty,Florida(Marion).Marionhasexperiencedanaverage

error rate of 51% on nursing home bills and 37% on hospital bills. The majority of errors are invalidaddresses.MarionroutinelydeniesclaimsforpeopleresidinginCitrus,Lake,Sumter and Martin Counties. In addition, during review of some old and stale claims, Marion has determinedtheclaimhasbeenpaidandisaduplicativebill. e. Indian River County, Florida (Indian River). Indian River audited 10

months of bills and noted that there were zero dollars in Medicaid claims at theIndian River Medical Center, its largest medical facility, which clearly indicates problems with the billing system. f. SarasotaCounty,Florida(Sarasota).Sarasotasrecordsreflectover40%

of the nursing home billing addresses and nearly 24% of the hospital/HMO billing addresses could not be verified as residential addresses in Sarasota County. Rightfully, Sarasota has Page12of24

refused to pay such bills. Sarasota has informed the Agency of its reasons for denial, which include:(i)theaddresswasnotphysicallylocatedinSarasotaCounty;(ii)thelistedaddresswas for a nursing home or rehabilitation center; (iii) the address was for a post office box; (iv) the address was illegible or incomplete; and (v) there was no actual residential address. As an exampleofoneofSarasotasincorrectbillings,oneinvoicerelatedtoaMedicaidrecipientwho lived on Whitfield Avenue. Map verification of this address by Sarasota revealed that the addressonWhitfieldAvenuewasactuallylocatedinManateeCounty. Section12 34. In its 2012 Regular Session, the Florida Legislature passed House Bill 5301 (the

Bill)bylessthanatwothirdsmajorityoftheSenateandoftheHouseofRepresentatives.The voteofHousememberswas7336,andthevoteofSenatememberswas2317,asreflectedon theBillvotesheets,atrueandcorrectcopyofwhichisattachedasExhibitC. 35. OnoraboutMarch29,2012,theGovernorsignedtheBillintolaw,andtheBillis

nowdesignatedaschapter201233,LawsofFlorida(Ex.A). 36. Chapter201233isagenerallawandanactrelatingtoStatehealthcareservices.

Section 12 of chapter 201233 amends section 409.915, Florida Statutes, related to county contributionstoMedicaid. 37. Section12createsnewmethodsforattributingStateMedicaidcoststocounties,

creates a new method for collecting payment for past Medicaid services, and creates a new paymentmethodforfuturebillingsbeginningMay1,2102.ThesignificantchangestothePrior Laware:

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a.

Section 12 revises the methodology for determining a countys eligible

recipients by basing such information on the federally approved Medicaid eligibility system withinDCF. b. Section 12 eliminates the cooperative nature of the billing process

betweencountiesandtheAgency.Now,Agencysinitialbillwillbeafinalbill,subjectonlyto anasyetundevelopedAgencyrefundprocesstoaddressbillingerrors. c. Section 12 requires the Agency to certify to each county the amount of

such countys unpaid billings from November 1, 2001, through April 30, 2012 (the Prior UnpaidAmounts).ThePriorUnpaidAmountsextendbackmorethantenyears. d. Section 12 provides that counties may challenge the Prior Unpaid

Amountsinanadministrativeprocessunderchapter120,FloridaStatutes.Countiesthatdonot challenge the Prior Unpaid Amounts shall pay only 85% of that countys Prior Unpaid Amounts. Counties that prove by a preponderance of the evidence that the Prior Unpaid Amountswereincorrectwillbeentitledtoacreditonfuturepayments. e. Section 12 implements a payment plan in order to pay for the Prior

Unpaid Amounts. Over a five year period beginning October 1, 2012, the Department will deductfromeachcountysmonthlydistributionpursuanttosection218.26,FloridaStatutes(the County Revenue Sharing Funds), that countys portion of the Prior Unpaid Amounts as certified by the Agency on August 1, 2012. The Department must leave sufficient County RevenueSharingFundstoserviceoutstandingdebtsecuredbysuchfunds. f. Section 12 provides that, beginning May 7, 2012, and continuing on the

7thdayofeachmonththereafter,theDepartmentwilldeductfromeachcountysdistribution Page14of24

pursuant to section 218.61, Florida Statutes (the Half Cent Sales Tax Funds), that countys monthly share of Medicaid reimbursement as certified by the Agency on the 1st day of each month(theFutureBillings).TheDepartmentmustleavesufficientHalfCentSalesTaxFunds to service outstanding debt secured by such funds. (Henceforth, the complaint uses the term StateSharedRevenuestorefercollectivelytotheHalfCentSalesTaxFundsandtheCounty RevenueSharingFunds.) g. Section 12 provides that counties may contest Future Billings by

requesting a refund under a process to be determined by the Agency, the Department, and FAC.IftheAgencydeterminestherefundrequestisappropriate,theDepartmentmayrefund theamounttothecountyfromtheGeneralRevenueFundorissuetherefundintheformofa creditagainsttheFutureBillings. 38. Notwithstandingthehistoryofmultiplebillingerrors,Section12requirescounty

Medicaid paymentsas certified by the Agencyto be deducted by the Department in their entirety from State Shared Revenues. Under Section 12, corrections occur only if the county provesthebillingtobeerroneousinanadministrativeproceeding. FinancialEffectsofSection12 39. CountiesareallowedtopledgecertainportionsoftheStateSharedRevenuesfor

thepaymentofprincipleorinterestoncountydebtobligations.See218.64(2)and218.25(1), (2)and(4),Fla.Stat.(2011). 40. On April 10, 2012, Moodys Investor Service issued a Sector Comment entitled

New State Withholding for Medicaid Costs is Credit Negative for Florida Counties, a true and correct copy of which is attached as Exhibit D. Moodys notes that the new law has Page15of24

negative credit implications for Florida Counties. According to Moodys, the new law weakens available revenue to service sales tax bonds and nonad valorem obligations. Recognizing that the State has reduced the percentage of tax revenues it will share with counties,Moodysobservesthatcountyrevenuesareexpectedtofallbyatotalof$75millionin thefirstyear,andbetween$30millionand$60millionoverthefourremainingyears.Moodys alsonotesthatthelostrevenuesaddanotherfinancialstrainoncountiesalreadychallengedby waning property tax and other operating revenues. While recognizing that the new law contains some protections for outstanding bond obligations, Moodys concludes that the increased withholdings of counties sales tax revenues will invariably reduce debt service coverageandbondingcapacity. 41. By mandating Medicaid bills be deducted from State Shared Revenues, the

Legislaturehasdivertedcountyrevenuesthatcouldbepledgedtoservicedebtobligations. 42. Although Section 12 addresses existing bonds, the flexibility of the Counties to

solvelocalproblemshasbeendiminishedbymandatingtheuseoftheStateSharedRevenuesto payPriorUnpaidAmountsandFutureBillings. 43. The effective date of Section 12 falls halfway through the Counties fiscal year,

andwilldetrimentallyimpactthesecurrentcountybudgets,beyondhealthcarefunding. GroundsforDeclaratoryRelief 44. The rights, status, and legal relations of the Counties and the nonplaintiff

membercounties of FAC are or will be affected to a material degree by Section 12, and the CountiesandFAC,onbehalfofitsnonplaintiffmembercounties,areindoubtastotheirrights andobligationsthereunder. Page16of24

45.

TheCountiesandFAC,onbehalfofitsnonplaintiffmembercounties,seekthe

Courts determination as to the validity and construction of Section 12; a declaration of this Court as to their respective rights, status, and equitable and legal relations thereunder; and othersupplementaloralternativerelief. 46. There is a bona fide, actual, present, and practical need for a declaration of the

validityandbindingeffect,ifany,ofSection12.Therequesteddeclarationdealswithapresent and ascertained or ascertainable state of facts, and the rights, powers, and obligations of the CountiesandthenonplaintiffmembersofFACaredependentupontheapplicationofSection 12tothosefacts. 47. TheCountiesandFAC,on behalfofits nonplaintiff membercounties, have an

actual,currentinterestthat is adverse andantagonisticto the interestsoftheDepartmentand theAgencywithrespecttorightsandobligationsunderSection12. 48. All adverse and antagonistic interests with respect to the construction and

validityofSection12arebeforetheCourt. 49. The Counties and FAC, on behalf of its nonplaintiff membercounties, are

entitledtohavetheirdoubtremovedandareentitledtoadeclarationfromthiscourtregarding whetherSection12isbindingoncountiesintheStateandvalidundertheFloridaConstitution. 50. The relief sought is not merely the giving of legal advice or the answer to

questions propounded from curiosity, but rather is necessary to resolve an actual, current, justiciablecontroversybetweentheplaintiffsandthedefendants.

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CountI Section12IsUnconstitutionalunderArticleVII,Section18(c) 51. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1

through50above. 52. ArticleVII,section18(c)oftheFloridaConstitutionprovides(emphasisadded):

(c)Exceptuponapprovalofeachhouseofthelegislaturebytwothirdsof themembership,thelegislaturemaynotenact,amend,orrepealanygenerallaw iftheanticipatedeffectofdoingsowouldbetoreducethepercentageofastate taxsharedwithcountiesandmunicipalitiesasanaggregateonFebruary1,1989. Theprovisionsofthissubsectionshallnotapplytoenhancementsenactedafter February1,1989,tostatetaxsources,orduringafiscalemergencydeclaredina writtenjointproclamationissuedbythepresidentofthesenateandthespeaker of the house of representatives, or where the legislature provides additional stateshared revenues which are anticipated to be sufficient to replace the anticipatedaggregatelossofstatesharedrevenuesresultingfromthereduction ofthepercentageofthestatetaxsharedwithcountiesandmunicipalities,which source of replacement revenues shall be subject to the same requirements for repeal or modification as provided herein for a stateshared tax source existing onFebruary1,1989. 53. The anticipated effect of Section 12 is to reduce the percentage that counties

receive of State taxes which are shared with counties and municipalities as an aggregate on February1,1989. 54. Section 12 directly and negatively impacts two State programs that require the

State to share tax revenues with counties. The first is the Revenue Sharing Act of 1972 (RevenueSharingAct).ThesecondistheLocalGovernmentHalfCentSalesTax(HalfCent SalesTaxAct).

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55.

Under the Revenue Sharing Act, the State shares a portion of cigarette tax

collectionsandsalesandusetaxcollections.UndertheHalfCentSalesTaxAct,thestateshares aportionofsalesandusetaxcollections. 56. DistributionsofStateSharedRevenuestocountiesaremadeonamonthlybasis

pursuanttoformulasestablishedinsections218.23and218.62,FloridaStatutes,respectively. 57. DistributionstocountiesundertheRevenueSharingActaremadeasaseriesof

entitlementrevenues.218.21(5),(6),(7)and(10),Fla.Stat.(2011). 58. DistributionstocountiesundertheHalfCentSalesTaxActaredeemedcounty

revenues.218.64,Fla.Stat.(2011). 59. Section12reducesthedistributionofCountyRevenueSharingFundsasfollows:

Beginning with the 2012 distribution the Department of Revenue shall reduce each countys distributionpursuanttos.218.26byonethirtysixthoftheamountcertifiedbytheagency... (emphasisadded). 60. Section12willresultintheaggregatelossof$325.5millioninCountyRevenue

SharingFunds. 61. Section12alsoreducesthedistributionofHalfCentSalesTaxFundsasfollows

(emphasisadded): BeginningMay1,2012,andeachmonththereafter,theagencyshallcertifytothe DepartmentofRevenuebythe7thdayofeachmonththeamountofthemonthly statement rendered to each county pursuant to subsection (4). Beginning with theMay2012distribution,theDepartmentofRevenueshallreduceeachcountys monthlydistributionpursuanttos.218.61bytheamountcertifiedbytheagency minus any amount required under paragraph (b). The amounts by which the distributionsarereducedshallbetransferredtotheGeneralRevenueFund. Page19of24

62.

Section12willresultinananticipatedaggregatelosstocountiesfromtheHalf

CentSalesTaxFundsof$289.4millionannually. 63. TherehasbeennoenhancementoftheimpactedStatetaxsourcesenactedsince

February1,1989,whichwouldnegatetherequirementthattheLegislaturepassSection12byat leastatwothirdsmajority. 64. Therehavebeennofiscalemergenciesdeclaredbyjointproclamationissuedby

thePresidentoftheSenateandSpeakeroftheHouseofRepresentativesthatwouldnegatethe requirementthattheLegislaturepassSection12byatleastatwothirdsmajority. 65. The Legislature has not provided additional stateshared revenues which are

anticipated to be sufficient to replace the anticipated aggregate loss of stateshared revenues resultingfromthereductionoftheCountiespercentageofthestatetaxespursuanttoSection 12. 66. None of the exemptions set forth in article VII, section 18(d) of the Florida

ConstitutionapplytoSection12. WHEREFORE,theplaintiffsrespectfullyrequestthatthisCourtissueitsfinaljudgment (i)declaringthatpursuanttoarticleVII,section18(c)oftheFloridaConstitution,Section12isa generallawthattheLegislaturemaynotenactwithoutatwothirdsmajorityinboththeSenate andHouseofRepresentativeand,therefore,isinvalid;(ii)declaringthattheDepartmentcannot lawfully withhold from a county any state funds to which the county may be entitled; (iii) enjoining the Agency and the Department from enforcing or otherwise implementing Section 12;(iv)providingsuchadditionalandsupplementalreliefasthecourtdeemsjustandproper, includingcostsofthisaction. Page20of24

CountII Section12IsNotBindingonCountiesUnderArticleVII,Section18(a) 67. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1

through50above. 68. ArticleVII,section18(a)oftheFloridaConstitutionprovides(emphasisadded):

(a) No county or municipality shall be bound by any general law requiring such county or municipality to spend funds or to take an action requiring the expenditure of funds unless the legislature has determined that such law fulfills an important state interest and unless: funds have been appropriated that have been estimated at the time of enactment to be sufficient to fund such expenditure; the legislature authorizes or has authorized a county or municipality to enact a funding source not available for such county or municipality on February 1, 1989, that can be used to generate the amount of funds estimated to be sufficient to fund such expenditure by a simple majority vote of the governing body of such county or municipality; the law requiring such expenditure is approved by twothirds of the membershipineachhouseofthelegislature;theexpenditureisrequiredtocomplywith a law that applies to all persons similarly situated, including the state and local governments; or the law is either required to comply with a federal requirement or required for eligibility for a federal entitlement, which federal requirement specifically contemplatesactionsbycountiesormunicipalitiesforcompliance. 69. Section 12 requires counties to expend funds or take an action requiring the

expenditureoffundsinatleastfourways: a. Section12requirescountiestoreimbursetheStatefordisputedMedicaid

billingsthatextendbeyondthefouryearstatuteoflimitationsprescribedinsections95.11(3)(f) or(p),FloridaStatutes. b. Section 12 will cause counties to expend additional funds for higher

interest rates on revenue bonds where the revenue source pledged for payment of the bonds comesfromtheStateSharedRevenues.However,thischangeissorecentthatnobondshave beenissuedpledgingtheStateSharedRevenuessinceSection12wasenacted. Page21of24

c.

Section12willcausethosecountiesthathavebeenhistoricallyoverbilled

to expend additional funds and utilize additional personnel and resources to challenge erroneousPriorUnpaidAmountsinaformaladministrativehearingprocessunderchapter120, FloridaStatutes. d. Section 12 mandates each county to pay a share of Future Billings that

maynotbeavalidobligation. 70. Withholding State Shared Revenues to pay Medicaid bills is the equivalent of

mandatingcountiestoexpendthosefunds. 71. InpassingSection12,theLegislaturedidnotmakeadeterminationthatsuchlaw

fulfillsanimportantstateinterest. 72. Section 12is not a law either requiredtocomply with a federalrequirementor

required for eligibility for a federal entitlement, as contemplated in the exception set forth in articleVII,section18(a)oftheFloridaConstitution. 73. None of the exemptions set forth in article VII, section 18(d) of the Florida

ConstitutionappliestoSection12. WHEREFORE,theplaintiffsrespectfullyrequestthatthisCourtissueitsfinaljudgment (i)declaringthat,pursuantarticleVII,section18(a)oftheFloridaConstitution,countiesarenot boundbySection12;(ii)declaringthattheDepartmentcannotlawfullywithholdfromacounty any state funds to which the county may be entitled; (iii) enjoining the Agency and the Department from enforcing or otherwise implementing Section 12; and (iv) providing such additionalandsupplementalreliefastheCourtdeemsjustandproper,includingcostsofthis action. Page22of24

CountIII Section12IsInvalidtotheExtentItSeekstoReviveTimeBarredClaims forPriorUnpaidAmounts 74. Plaintiffs reallege and incorporate by reference the allegations in paragraphs 1

through50above. 75. Section 12 provides a mechanism for collection of the Prior Unpaid Amounts

fromeachcountyintheamountcertifiedbytheAgency. 76. ThePriorUnpaidAmountsrepresenttheMedicaidreimbursementamountsthe

State has not collected from the counties for each billing period from November 1, 2001, throughApril30,2012. 77. UnderthePriorLaw,theStatewasrequiredtoinitiatelegalactiononaclaimto

recoveranyPriorUnpaidAmountswithinfouryearsaftertheclaimaccrued.See95.11(3)(f), (p),Fla.Stat.(2011);seealso95.11(6),Fla.Stat.(2011) 78. The States claim for the Prior Unpaid Amounts attributable to each periodic

billingaccruedatthetimethecountyfailedtomaketimelypaymentfortheamountsbilledto thecounty. 79. The State has not timely filed any legal action for Prior Unpaid Amounts

accruingbeforeMarch29,2008. 80. The Counties had a constitutionally protected property interest in a statute of

limitationsdefenseagainstuntimelyclaimsforPriorUnpaidAmounts. 81. The Legislature has no authority to revive expired claims for Prior Unpaid

Amounts,astheyweretimebarredatthetimeSection12tookeffectonMarch29,2012. Page23of24

82.

Section 12 unconstitutionally deprives the Counties of their protected property

interestinastatuteoflimitationdefenseagainstPriorUnpaidAmountsaccruingbeforeMarch 29,2008. WHEREFORE,theplaintiffsrespectfullyrequestthatthisCourtenteritsfinaljudgment (i)declaringSection12invalidtotheextentitrevivestheStatesrighttoseekpaymentbasedon anyPriorUnpaidAmountsaccruingpriortoMarch29,2008;(ii)orderingtheDepartmentand the Agency not to implement or enforce Section 12 with respect to Prior Unpaid Amounts accruingpriortoMarch29,2008;and(iii)providingsuchadditionalandsupplementalreliefas thecourtdeemsjustandproper,includingcostsofthisaction. RESPECTFULLYSUBMITTEDthis26thdayofApril,2012. /s/SusanH.Churuti SusanH.Churuti Fla.BarNo.284076 ThomasB.Drage,Jr. Fla.BarNo.173070 BryantMillerOlive,P.A. OneTampaCityCenter,Suite2700 Tampa,FL33602 (813)2736677 (813)2232705(fax) schuruti@bmolaw.com

VirginiaSaundersDelegal Fla.BarNo.989932 GeneralCounsel FloridaAssociationofCounties 100S.MonroeStreet Tallahassee,FL32301 (850)9224300 (850)4887192(fax) gdelegal@flcounties.com AttorneysforPlaintiffs Page24of24