This appeal, filed pursuant to our order granting application for discretionary review, is the fourth time in which the constitutionality of what has become known as the Local Option Sales Tax Act, OCGA § 48-8-80 et seq., or a provision of it, has come before this Court. The original statute that created the Local Option Sales Tax, hereinafter referred to as “LOST,” was enacted in 19751 and created a special district of taxation for each county to finance certain services that consisted of only those portions of the county that were outside the boundaries of any municipality.2 In Martin v. Ellis, 242 Ga. 340 249 SE2d 23 1978, this Court ruled that the provision of the LOST statute that authorized a differential rollback of county ad valorem taxes created a nonuniform scheme of taxation in violation of the uniformity requirements of the State Constitution.3 Id. at 345. It was stricken from the statute but the remainder of the Act was sustained. Id. Four months later, in a consolidated appeal of fifteen different lawsuits involving constitutional challenges to the LOST Act, this Court declared the entire Act to be unconstitutional because the scheme, as a whole, improperly permitted counties to collect the tax and then distribute a portion of its proceeds to municipalities within the special taxing district. City Council of Augusta v. Mangelly, 243 Ga. 358 254 SE2d 315 1979. The General Assembly acted promptly to pass a new version of the LOST Act,4 now codified, as amended, at OCGA § 48-8-80 et seq., creating special taxing districts whose boundaries correspond with each of the State’s 159 counties, and authorizing a tax that is neither a city nor a county tax, but a special district tax. See Bd. of Commrs. of Taylor County v. Cooper, 245 Ga. 251, 256 2 264 SE2d 193 1980. In the Taylor County case, this Court held that such a joint tax was expressly authorized by the Constitution.5 Id. at 255-256. This Court also approved the “local negotiation” feature of the Act setting forth a procedure whereby the county and qualified municipalities are required to negotiate the terms by which the jointly collected tax will be distributed between them and then execute jointly a certificate to be filed with the revenue commissioner. Id. at 256-258. The local negotiation feature was deemed not to be at odds with Mangelly because the tax was not a county tax with funds improperly distributed to municipalities but a special district tax with funds distributed, pursuant to negotiated agreement, throughout the district. Id. at 256. The local negotiation feature was found not to be an unlawful delegation of legislative authority because it does not delegate the power to tax but “merely allows the taxing authority to distribute the proceeds within its boundaries . . .” which is constitutionally authorized. Id at 257. This Court determined it was not mandatory, under a delegation of legislative authority analysis, for the LOST Act to direct the division of funds between county and municipalities and it was permissible for the Act to leave to the governing authorities levying the tax the task of dividing the funds among them. Id.
Apparently, however, the local negotiation feature of the LOST Act posed political problems due to the requirement that the county and the qualified municipalities reach an agreement regarding how to divide and distribute tax funds in order to file the necessary renewal certificate with the revenue commissioner at the time the tax must be renewed. Generally speaking, once the governing authorities of a special district have been authorized to collect the tax by referendum elections, they are initially required to agree to the distribution of collected funds in accordance with criteria set forth in OCGA § 48-8-89 b, based in part upon population distribution between the governing entities, and then to notify the revenue commissioner by filing a certificate executed by each respective governing authority. The commissioner then disburses the tax revenue pursuant to the agreement of the parties, after deducting the State’s one percent administration fee. Failure to file a certificate by the required date results in revocation of authority to impose the tax. OCGA § 48-8-89 c. The LOST Act also requires renegotiation of the distribution of tax funds within a specified deadline after each decennial census in order for the governing authorities to take into consideration changes in population distribution within the taxing district, consider again the criteria set forth in subsection b of the statute, “make rational the allocation of tax resources,” and then to file a renewed certificate; otherwise, authority to collect the tax expires on December 31 of the second year following the year in which the decennial census is conducted. OCGA § 48-8-89 d 1. The parties to this appeal, and the various entities that have filed amicus curiae briefs, show that problems have arisen when the governing entities cannot agree to changes in the distribution formula for purposes of renewing the certificate. Pursuant to subsection d 2, the eligible political subdivisions are required to commence renegotiations no later than July 1 of the year in which the tax will otherwise expire. Pursuant to subsection d 3, if they have not reached an agreement within 60 days, they are required to agree to submit the dispute to nonbinding arbitration or some other form of alternative dispute resolution. Prior to amendment to subsection d which became effective June 4, 2010,6 alternative dispute resolution was the final authorized step for the parties to reach an agreement in order to file the required renewal certificate within the deadline. Failure to reach an agreement resulted in termination of authority to collect the tax and if no certificate was filed regarding the manner in which previously collected taxes were to be distributed, then the proceeds were to escheat to the state.
