Judges: K. N. AYERS
Agency: Department of Management Services
Latest Update: Jun. 01, 1990
Summary: Division of Administration (DOA) should return Social Security withholding delinquent fee to School Board where School Board mailed check four days before deadline and arrived two days late.
84-3487STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SCHOOL BOARD OF PINELLAS )
COUNTY, FLORIDA, )
)
Petitioner, )
)
vs. ) CASE NO. 84-3487
) DEPARTMENT OF ADMINISTRATION, ) DIVISION OF RETIREMENT, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on March 22, 1985, at Clearwater, Florida.
APPEARANCES
For Petitioner: Usher L. Brown, Esquire
1960 East Druid Boulevard Clearwater, Florida 33518
For Respondent: Augustus D. Aikens, Jr., Esquire
2639 North Monroe Street Tallahassee, Florida 32301
By Petition dated September 7, 1984, the Pinellas County School Board, Petitioner, contests the assessment by the Department of Administration, Division of Retirement, Respondent, of a penalty in the amount of $9,415.68 against it for late payment of social security taxes withheld from employees' pay for the payroll period May 1-15, 1984. Challenges to Respondent's authority to adopt the procedures by which penalty was assessed and whether these procedures are rules were dismissed by Petitioner at the hearing. At the beginning of the hearing, the parties entered into certain stipulations which are contained in Findings 1 through 8 below, and five exhibits were admitted into evidence. Two of these exhibits are depositions of employees of the Respondent. Neither side presented additional evidence. Petitioner's Final Brief and Memorandum of Lag were timely filed and have been considered. No brief, memorandum or proposed recommended order has been received from Respondent.
FINDINGS OF FACT
Check No. 98506 dated May 15, 1984, issued by the School Board of Pinellas County in the amount of 941,567.65 was mailed to Respondent on May 16,
1984, to pay the social security withholding taxes for the payroll period May 1- 15, 1984. This check was in the correct amount due, and the envelope containing this check was addressed to the correct address of Respondent, P. O. Box 9000, Tallahassee, Florida 32303.
Check No. 98506 payable to Social Security Contributions Trust Fund was received by Respondent at 8:13 a.m., May 22, 1984, at Tallahassee, Florida.
U. S. Post Office, Clearwater Branch, has a two-day standard delivery time from Clearwater to Tallahassee for mail received at that post office.
Section 121.071(5), Florida Statutes, is applicable to these proceedings, as is Section 650.05(4), Florida Statutes.
On September 29, 1983, Pinellas County School Board was informed by Second Notice (Exhibit 1) of the changes in payment of social security taxes effective January 1, 1984, which required all reporting activities to remit payments in time to be received by Respondent no later than the twentieth of the month for payroll period ending during the first 15 days of the month.
The Division of Retirement is a state agency responsible for collecting social security contributions from all public employers in Florida and remitting same to the United States Government by the last day of each month for those payroll periods ending during the first 15 days of the month.
Section 650.05(4), Florida Statutes, provides for a 1 percent delinquent fee for delinquent payments.
Payment of $9,698.16 covering penalty and interest was paid by Petitioner by check dated September 28, 1984 (Exhibit 3). This payment was made under protest.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.
Section 121.071(5), Florida Statutes (1984 supp.), provides in pertinent part:
Effective January 1, 1984, contributions made in accordance with subsection (4) [social security payments] shall be paid by the employer into the system trust fund in accordance with rules promulgated by the administrator pursuant to chapter 120. For any payroll period ending any day of the month before the 16th day of the month such contributions are due and payable no later than the 20th day of the month; and, for any payroll periods ending any day of the month after the 15th day of the month, such contributions are due and payable no later than the 5th day of the next month.
Contributions received in the offices of the Division of Retirement of the Department of Administration after the prescribed date shall
be considered delinquent unless, in the opinion of the division, exceptional circumstances beyond an employer's control prevent a remittance by the prescribed due date notwithstanding such employer's good faith efforts to effect delivery....
Delinquent social security contributions shall be assessed a delinquent fee as authorized by s. 650.05(4). The delinquent fee assessable for an employer's first delinquency after July 1, 1984, shall be as specified in s. 650.05(4), and, beginning with the second delinquency in any fiscal year by the employer subsequent to July 1, 1984, all subsequent delinquency fees shall be assessed against the employer at
twice the applicable percentage rate specified in s. 650.05(4).
Section 650.05, Florida Statutes (1983), provides in pertinent part: (3)(a) Each political subdivision as to which
a plan has been approved under this section
shall pay into the Social Security Contribution Trust Fund, with respect to wages (as defined in s. 650.02), at such time or times as the state agency may by regulation prescribe, contributions in the amounts and
at the rates specified in the applicable agreement entered into by the state agency under s. 650.03.
* * *
(4) Delinquent payments due under paragraph (3)(a) may, with interest of 1 percent for each calendar month or part thereof past the due date, be recovered by action in a court of competent jurisdiction against the political subdivision liable there for or shall, at the request of the state agency, be deducted from any other monies payable to such subdivision by any department or agency of the state.
Prior to the 1984 amendment to s. 121.071(5), that section, as shown in Florida Statutes (1983) provided in pertinent part:
Contributions received in the office of the Division of Retirement of the Department of Administration after the prescribed date shall be considered delinquent. Delinquent
social security contributions shall be assessed a delinquent fee as authorized by s. 650.05(4).
Although the 1984 amendment to s. 121.071(5) was made retroactive to January 1, 1984, this amended statute was not referred to in Use Final Brief or Memorandum of Law submitted by Petitioner. Nor was Rule 228-3.11, Florida
Administrative Code, cited by Petitioner. Since Respondent did not submit a Brief or Memorandum of Law supporting its position that the penalty should be paid by Petitioner, the existence of the amended statute and Rule 22B-3.11, Florida Administrative Code, was revealed only by the research necessary to prepare this order.
Rule 22B-3.11, Florida Administrative Code, effective November 6, 1984, essentially tracks the language of s. 121.071(5) as amended retroactive to January 1, 1984. Although that rule was not in effect at the time of the transaction here involved, that rule does constitute the agency's interpretation of Section 121.071(5) which was in effect at the time the delinquent payment here involved was made. An agency's interpretation of a statute it is called upon to administer is entitled to great weight. Natelson v. Department of Insurance, 454 So.2d 31 (Fla. 1st DCA 1984), Department of Insurance v. Southeast Volusia Hospital District, 438 So.2d 815 (Fla. 1983).
Rule 22B-3.11, Florida Administrative Code, provides in pertinent part:
Social Security contributions not received in the office of the Division when due shall be considered delinquent, unless a waiver is granted pursuant to subsection (4).
* * *
... Social Security contributions not remitted timely as prescribed in subsection
shall be delinquent, unless in the opinion of the Division exceptional circumstances beyond the employer's control prevented remittance by the prescribed due date and a waiver of the delinquent fee is granted by the Division. A waiver may be granted only once for an employer for retirement or Social Security during any one fiscal year. The employer shall fully explain and certify such waiver request in writing to the Division.
The issue for determination in these proceedings is whether the penalty should be waived because "exceptional circumstances beyond the employer's control prevented remittance by the prescribed due date notwithstanding such employer's good faith efforts to effect delivery."
Once the remittance is placed in the U. S. Postal System, its handling thereafter was certainly beyond Petitioner's control. The stipulated fact is that the normal postal delivery time from Clearwater to Tallahassee is two days. The check was placed in the mail four days before the due date. U. S. Mail is the standard and accepted method throughout these United States for remitting payments with or without due dates. Respondent probably receives in excess of
90 percent of the payments it receives through the U. S. Mail System, although no evidence was presented in this regard. If Respondent remits the payments it receives from the various agencies to the Social Security Administration by U.
Mail, that would indicate Respondent accepts the U. S. Postal Service as a reliable courier. Again, no evidence as presented as to how these payments are remitted by Respondent to the Social Security Administration. Use of the U. S. Postal System is an accepted method of transmitting checks for the payment of obligations and, except where specifically provided otherwise by statute or
rule, payment is made when a valid check is deposited in the U. S. Postal System and goes beyond the control of the payor. Newman v. Ferris, 432 So.2d 641 (Fla. 4th DCA 1983).
That Respondent expected employers to use the regular U. S. Mail service to remit social security contributions is clearly evident in the instructions sent to public employers (Exhibit 1) wherein it is stated:
If the amount to be remitted can be determined and transmitted in advance of the payroll
date then utilization of the regular U.S. mail services should enable you to meet the delivery deadline.
By placing the social security contributions within the U. S. Mail service four days prior to the due date, Petitioner exercised a good faith effort to ensure delivery on or prior to the due date and the failure of the check to reach Respondent by the due date was due to exceptional circumstances beyond the Petitioner' s control.
From the foregoing it is concluded that by placing the check dated May 15, 1984, payable to the Social Security Contributions Trust Fund in the U. S. Mail System at Clearwater, Florida, on May 16, 1984, Petitioner made a good faith effort to assure receipt of this payment by Respondent in Tallahassee on or before May 20, 1984; that once the check was placed in the U. S. Mail System it was totally removed from all control by Petitioner; and that six days' transit time for U. S. Mail from Clearwater to Tallahassee constitutes an exceptional circumstance for which Petitioner is entitled to relief. It is
RECOMMENDED that, pursuant to Section 120.071(5), Florida Statutes, and Rule 22B-3.11(4), Florida Administrative Code, Respondent waive the penalty and interest in the amount of 9,698.15 paid by the Pinellas County School Board, and that sum be refunded to the School Board of Pinellas County.
ENTERED this 7th day of May, 1985, at Tallahassee, Florida.
K. N, AYERS Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1985.
COPIES FURNISHED:
Usher L. Brown, Esq.
Associate School Board Attorney Post Office Box 6374 Clearwater, Florida 33518
Augustus D. Aikens, Jr., Esq. Division of Retirement Department of Administration 2639 North Monroe Street Suite 207, Building C Tallahassee, Florida 32301
Ms. Gilda Lambert Secretary
Department of Administration Carlton Building Tallahassee, Florida 32301
=================================================================
AGENCY FINAL ORDER
=================================================================
STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
SCHOOL BOARD OF PINLLAS COUNTY, FLORIDA,
Petitioner,
vs. CASE NO. 84-3487
DEPARTMENT OF ADMINISTRATION, DIVISION OF RETIREMENT,
Respondent.
/
FINAL ORDER
Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, K. N. Ayers, held a public hearing in the above- styled case on March 22, 1985, at Clearwater, Florida.
APPEARANCES
For Petitioner: Usher L. Brown, Esquire
1960 East Druid Boulevard Clearwater, Florida 33518
For Respondent: Augustus D. Aikens, Jr., Esquire
2639 North Monroe Street Tallahassee, Florida 32301
By Petition dated September 7, 1984, the Pinellas County School Board, Petitioner, contests the assessment by the Department of Administration,
Division of Retirement, Respondent, of a penalty in the amount of 59,415.68 against it for late payment of social security taxes withheld from employees' pay for the payroll period May 1-15, 1984. Challenges to Respondent's authority to adopt the procedures by which penalty was assessed and whether these procedures are rules were dismissed by Petitioner at the hearing. At the beginning of the hearing, the parties entered into certain stipulations which are contained in Findings 1 through 8 below, and five exhibits were admitted into evidence. Two of these exhibits are depositions of employees of the Respondent. Neither side presented additional evidence. Petitioner's and Respondent's Final Briefs and Memorandums of Law were timely filed, however, the Hearing Officer only considered Petitioner's in his Recommended Order. Both have been considered in this order.
FINDINGS OF FACT
Check No. 98506 dated May 15, 1984, issued by the School Board of Pinellas County in the amount of $941,567.65 was mailed to Respondent on May 16, 1984, to pay the social security withholding taxes for the payroll period May 1- 15, 1984. This check was in the correct amount due, and the envelope containing this check was addressed to the correct address of Respondent, P. C. Box 9000, Tallahassee, Florida 32302.
Check No. 98506 payable to Social Security Contributions Trust Fund was received by Respondent at 8:13 a.m., May 22, 1984, at Tallahassee, Florida.
U. S. Post Office, Clearwater Branch, has a two-day standard delivery time from Clearwater to Tallahassee for mail received at that post office.
Section 121.071(5), Florida Statutes, is applicable to these proceedings, as is Section 650.05(4), Florida Statutes.
On September 29, 1983, Pinellas County School Board was Informed by Second Notice (Exhibit 1) of the changes in payment of social security taxes effective January 1, 1904, which required all reporting activities to remit payments in time to be received by Respondent no later than the twentieth of the month for payroll period ending during the first 15 days of the month.
The Division of Retirement is a state agency responsible for collecting social security contributions from all public employers in Florida and remitting same to the United States Government by the last day of each month for those payroll periods ending during the first 15 days of the month.
Section 650.05(4), Florida Statutes, provides for 1 percent delinquent fee for delinquent payments.
Payment of $9,698.16 covering penalty and interest was paid by Petitioner by check dated September 28, 1984 (Exhibit 3). This payment was made under protest.
Upon a review of the entire record in this case and the transcript of the March 22, 1985 hearing the recommended findings are modified as follows:
In his Conclusions of Law, page 6, the Hearing Officer found no evidence was presented as to how the State's social security payments are remitted to the Social Security Administration. The Hearing Officer is incorrect. Melvin Cody Law testifies at page 6 of his deposition (Exhibit 5)
that the Respondent hand carries its payment to Jacksonville because "we do not trust the mail. We do not wire it . . . and the reason we do that is that the federal government penalty to us would be such that we could not stand it."
Payment of social security taxes by local agencies may be effected by
U. S. mail, carrier service, wire transfer or personal delivery, however, payment is not completed until the agency's payment is received in the office of the Division of Retirement of the Department of Administration. Testimony of Rudolph Hartsfield (Exhibit 4) page 8, lines 1-12. Testimony of Melvin Cody Law (Exhibit 5) page 10, lines 16-22.
Respondent did not find the justification submitted by Petitioner demonstrated exceptional circumstances beyond its control. (Exhibit 5 attachment to deposition of Cody Law.)
CONCLUSIONS OF LAW
The Petitioner, Pinellas County School Board, is a political subdivision of the State of Florida as defined in Section 650.02(f) , Florida Statutes. As such, all of the Petitioner's employees are required to pay into the Social Security Contributions Trust Fund an employee's tax equal to the amount of employee tax which would be imposed by the Federal Insurance Contributions Act (26 U.S.C.A. s. 1301 et seq). These employee taxes (contributions) are required to be collected by payroll deduction from wages when paid. (Section 650.04(2), Florida Statutes). The political subdivision is also required to contribute into the Social Security Trust Fund. (Section 650.05(3)(a))
If the employer and employee contributions are delinquent, a delinquency fee of one percent (1%) for each month or part thereof past the due date may be assessed by the Respondent. (Section 650.04(4), Florida Statutes)
Further, the Florida Retirement System Act makes it clear contributions for social security are due in addition to retirement.
"Contributions for social security by each member and each employer, in the amount required for social security coverage as now or hereafter provided by the federal Social Security Act, shall be in addition to retirement contributions . . ." (121.071(4), F.S.)
Prior to January 1, 1984, retirement and social security contributions were governed by the same rules and deemed :aid if postmarked by the 20th day of the month immediately following the month during which the payroll was paid (Section 121.071(5), Florida Statutes; and Rule 22B-3.11(1), Florida Administrative Code). The social security contributions, like retirement contributions, were, by statute, due "no later than the 25th day of the month following the month in which the payroll period ended". The agency rule could establish a different due date, but it could not establish a date earlier than the 20th of the month. The agency adapted its retirement collection rules to the Social Security payment collections. However, this procedure was modified after the social security statutes (26 U.S.C.A. s. 1301, et seq) were modified by the U.S. Congress to require social security contributions to be submitted twice each month rather than monthly.
"Effective January 1, 1984, contributions made in accordance with subsection (4) shall be paid by the employer into the system trust fund in accordance with rules promulgated by the administrator pursuant to chapter 120.
For any pay roll period ending any day of the month before the 16th day of the month, such contributions are due and payable no later than the 20th day of the month; and, for any payroll periods ending any day of the month after the 15th day of the month, such contributions are due and payable no later than the 5th day of the next month."
(Section 121.071(5), Florida Statutes (1983)
In addition to this specific payment schedule, the Legislature redefined and linked delinquent payments to the time the contributions were received "in the office of the Division of Retirement":
"Contributions received in the office of the Division of Retirement of the Department of Administration after the prescribed date shall be considered delinquent, and, with respect to retirement contributions due under subsections
and (3), each employer shall be assessed a delinquent fee of 1 percent of the contributions due for each calendar month or part thereof that the contributions are delinquent. Delinquent social security contributions shall be assessed a delinquent fee as authorized by s. 650.05(4). [emphasis supplied] (Section 121.01(5) F.S.)
As mentioned earlier, Section 650.05(4) authorizes a delinquency fee of one percent (1%).
Despite the clear language of the statutes that contributions payments are delinquent if they are not received by the prescribed date, Petitioner argues the statute means "payments are delinquent if they are not ailed by the due date". "Receiving" and "Mailing" are not synonymous terms.
"Where the language of a statute is so plain and unambiguous as to fix the legislative intent and leave no room or construction, admitting of but one meaning, courts may not depart from the plain language employed by the Legislature." [State ex rel, Florida State Racing Commission v. Jai Alai, Inc. 112 So.2d 825 (Fla. 1959); See also, Brooks v.
Anasia Mosquito Control District, 148 So.2d 64 (Fla. DCA 1963):
"The Courts should not place a construction on a statute which will mean departure from the natural meaning of the language used."
Received" is defined by Webster's New Collegiate Dictionary as: "to come into possession of". Respondent accordingly did not come into possession of the contribution until they were in its offices. Words of common usage, when used in a statute, should be construed in their plain and ordinary sense. Pedersen v. Green, 105 So.2d 1 (Fla. 1958)
This case is distinguishable from Neuman v. Ferris, 432 So.2d 641 (Fla. 4th DCA 1983). In Neuman, the Mortgagor in a foreclosure action was directed to deliver his monthly payments by mail. Here Section 121.071 does not direct any method of delivery nor mode of payment. Neuman only described the due date as the first date of each and every month. It did not define the delinquent date as 121.071(5) does. This case is also distinguishable from Wiers v. White, 196 So.2d 206 (Fla. 1940). In Weirs, the question in that foreclosure action was whether the Maryland Trust Company of Baltimore et al. had become holders of a August 3, 1928 note and mortgage from Mrs. White and her husband. Mrs. White and her husband had given their note and mortgage in the principal sum of three thousand dollars ($3,000.00) to the Security Bond and Mortgage Company of Jacksonville who in turn assigned it to Maryland Trust on August 3, 1928. The Court held Maryland Trust was a "holder" because Security Bond had made and recorded the assignment and transmitted the note, mortgage, and assignment by mail to Maryland Trust. Control of the note and mortgage thereby passed out of the hands of Security Bond to Maryland when it was placed in the mail with the intent for the note, mortgage, and assignment to be transmitted to Maryland Trust. The sole question was: When did domination and control over the note, mortgage, and assignment cease. There was no issue in Wiers of the date payments were due or made. Similarly, Weirs had no rule, regulation, or statute which defined due date or place of payment as does 121.071(5), Florida Statutes. Similarly, neither Neuman nor Weirs was a case which required payments by a State agency pursuant to law. Clearly payments "received in the offices of the Division of Retirement after the prescribed date shall be considered delinquent". From the foregoing language it is clear the Legislature intended to require the payments to be delinquent even if mailed but not received in the Respondent's Offices before the due date.
Accordingly, the penalty and interest assessment by the Division of Retirement in the amount of $9,698.15 paid by the Pinellas County School Board was proper and the Agency's action is affirmed.
DONE and ORDERED in Tallahassee, Florida this 15th day of July, 1985.
J. MCMULLIAN III Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1985.
COPIES FURNISHED:
Usher L. Brown, Esq.
Associate School Board Attorney Post Office Box 6374 Clearwater, Florida 33518
Augustus D. Aikens, Jr., Esq. Division of Retirement Department of Administration 2639 North Monroe Street Suite 207 - Building C Tallahassee, Florida 32303
K. N. Ayers, Hearing Officer Division of Administrative Hearings The Oakland Building
2009 Apalachee parkway
Tallahassee, Florida 32301
Docket for Case No: 84-003487
Orders for Case No: 84-003487
| Issue Date |
Document |
Summary |
|
Jul. 16, 1985 |
Agency Final Order
|
|
|
May 07, 1985 |
Recommended Order
|
Division of Administration (DOA) should return Social Security withholding delinquent fee to School Board where School Board mailed check four days before deadline and arrived two days late.
|
