STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JIM NEEL and ASSOCIATES, )

)

Petitioner, )

)

vs. ) CASE NO. 88-5739

) DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Panama City, Florida, before the Division of Administrative Hearings, by its duly designated Hearing Officer, Diane Cleavinger on January 20, 1989. The parties were represented as follows:

For Petitioner: Sandra G. Atkins, Esquire

203-A East Fourth Street Panama City, Florida 32401

For Respondent: Bruce A. Campbell, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58 Tallahassee, Florida 32399-0458

The issue addressed in this proceeding is whether Jim Neel, the majority owner of Jim Neel and Associates, Inc. qualifies as a Native American for the purposes of Chapter 14-78, Florida Administrative Code.

Petitioner's majority owner testified in his own behalf and presented the testimony of J. C. Wilson and Peggy Venable, a genealogist for the Creek Indians. DOT presented no live testimony but submitted the deposition testimony of James M. Neel, Jr., a/k/a Jim Neel.

Respondent filed its proposed recommended order on February 6, 1989.

Petitioner did not submit a proposed recommended order. Respondent's proposed findings of fact have been considered and utilized in the preparation of this Recommended Order except where such proposals were not supported by the weight of the evidence or were immaterial, cumulative or subordinate. Specific rulings of the Respondent's proposed findings of fact are contained in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. Petitioner, Jim Neel & Associates, Inc., a Florida corporation, applied to the Department of Transportation (DOT) for certification as a Disadvantaged Business Enterprise.

   
   

2. The majority stockholder of Jim Neel & Associates, Inc., is Jim Silver Eagle Neel.

3. On his mother's side Jim Neel is a direct descendant of Creek Indians Who were enrolled in the 1832 Census for that Tribe. Additionally, his father's family is known to be descended from the Cherokee Tribe. In terms of blood lines it is estimated that Mr. Neel is one-quarter American Indian. However, Mr. Neel has the features of a Native American.

   
   

4. However, Mr. Neel has actively participated in the activities of the Lower Creek Muskogee Tribe since the beginning of 1986. 1/ He is considered by the National and local Creek Indian Tribes to be a member of their group.

   
   

5. Additionally, Petitioner has been recognized by the federal Bureau of Indian Affairs as being a member of the Creek Indian Tribe. Such recognition enables Petitioner to participate in the Eastern Creek Judgment Fund which was awarded against the federal government for treaty violations to members of the Eastern Creek Tribe.

   
   

6. Prior to the beginning of 1986, Mr. Neel did not maintain any direct affiliation with a tribe. To the best of his knowledge, his mother did not maintain any direct affiliation with a tribe. However, the evidence did show his mother kept in contact with local Creeks on an informal basis. Additionally, when Mr. Neel was young, his mother would tell him stories about his Indian heritage, but advise him not to reveal the fact of his Indian heritage to others.

   
   

7. When Mr. Neel was growing up it was not wise to declare one's Indian heritage due to the racial prejudice which would be inflicted on that individual. In fact, Mr. Neel did not feel he could freely declare his heritage until about ten years ago.

   
   

8. Mr. Neel was raised on a poor rural farm in northwest Florida. His mother, due to her Indian heritage, was uneducated. She could not read or write and, therefore could not obtain above menial wages to support her family. The entire family, including Petitioner, existed under an economic as well as social disadvantage. Through sheer determination, Petitioner literally pulled himself up by his own bootstraps. Around 1948 he became an auto/truck mechanic. Around 1955 he began as a service manager for an Oldsmobile dealer. Because the wages of a mechanic were low at that time, Mr. Neel changed careers and joined the Panama City Police force. He was a city police officer for the next fifteen years. In 1972 he was employed by the Panama City Airport Authority as a security officer. He rose by promotion to become the Airport Manager from 1980 through 1987. At present he is a consultant to the Airport Authority.

   
   

9. No evidence was presented by the Department which would be sufficient to demonstrate that Mr. Neel had not suffered social and economic disadvantage on an individual basis.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction of the subject matter of and the parties to this proceeding pursuant to Section 120.57(1), Florida Statutes.

    
    

11. The authority of the Florida Department of Transportation is derived from Chapters 339 and 337, Florida Statutes.

12. Pursuant to Sections 339.0805, 337.125, 337.135 and 337.137, Florida Statutes, the Department administers a certification program which certifies applicants as Disadvantaged Business Enterprises (DBEs). DBEs are accorded competitive advantages and preferential treatment because they are eligible to participate in the Department's sheltered program of set-aside contracts under DBE subcontract goals. The program also serves to implement the State Minority Business Program as described in Section 287.0945, Florida Statutes.

1. DBEs are small business concerns that are owned and controlled by socially and economically disadvantaged individuals as defined by the federal Surface Transportation and Uniform Relocation Assistance Act of 1987. Chapter 339, Florida Statutes, in pertinent part provides:

   
   

   339.0805 State Transportation Trust Fund; specified percentage to be expended with small business owned by socially and economically disadvantaged persons; construction management development program; bond guarantee program.--

   (1)(a) Except to the extent that the head of the department determines otherwise, not less than 10 percent of the amounts expended from the State Transportation Trust Fund shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals as defined by the Surface Transportation and Uniform Relocation Assistance Act of 1987.

   (b) In fulfilling this mandate, the department shall utilize every means available to it, including, but not limited to, goals and set-asides for competitive bidding and contracting only by, between, and among those firms which are certified by the department as socially and economically disadvantaged business enterprises and which are prequalified as may be appropriate. It is the policy of the state to meaningfully assist socially and economically disadvantaged business enterprises through a program that will provide for the development of skills through business management training, as well as financial assistance in the form of bond guarantees, to primarily remedy the effects of past economic disparity... .

   
   

   1. The head of the department is authorized to expend up to 6 percent of the funds specified in subsection (1) which are designated to be expended on small business firms owned and controlled by socially and economically disadvantaged individuals to conduct, by contract or otherwise, a construction management development program... .

      1. On-the-job instruction will consist of, but is not limited to, setting up the job site; cash flow methods; project scheduling; quantity takeoffs; estimating; reading plans and specifications; department procedures and billing and payments; and bid preparation methods.

         
         

   2. The head of the department is authorized to expend...funds...on a bond guarantee program... .

   
   

   (5) The department shall promulgate rules for implementing the directives contained in this section. [Emphasis added.]

   
   

2. The Surface Transportation and Uniform Relocation Assistance Act of 1987 (23 U.S.C. 101 et seq.) (STURRA), Public Law 100-17 at 101 Stat. 145 and

   146 defines a "small business concern" by reference to Section 3 of the Small Business Act (15 U.S.C. 632). Likewise, STURRA defines "socially and economically disadvantaged individuals" by reference to Section 8(d) of the Small Business Act (15 U.S.C. 637[d]). Section 106(c) of STURRA provides:

   
   

   1. Disadvantaged Business Enterprises.--

      1. GENERAL RULE.--Except to the extent that the Secretary determines otherwise, not less than 10 percent of the amounts authorized to be appropriated under titles I and III of this Act or obligated under titles I, II and III (other than section 203) of the Surface Transportation Assistance Act of 1982 after the date of the enactment of this Act shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals.

         
         

      2. DEFINITIONS.--For purposes of this subsection--

      1. SMALL BUSINESS CONCERN.--

         The term "small business concern" has the meaning such term has under section 3 of the Small Business Act (15 U.S.C. 632); except that such term shall not include any concern or group of concerns controlled by the same socially and economically disadvantaged individual or individuals which has average annual gross receipts over the preceding 3 fiscal years in excess of $14,000,000 as adjusted by the Secretary for inflation.

      2. SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUALS.--The term "socially and economically disadvantaged individuals" has the meaning such term has under section 8(d) of the Small Business Act

      (15 U.S.C. 637[d]) and relevant subcontracting regulations promulgated pursuant thereto; except that women shall be presumed to be

      socially and economically disadvantaged individuals for purposes of this subsection.

      
      

3. Section 8(d) of the Small Business Act (15 U.S.C. 637[d]), provides:

   
   

   1. Performance of contracts by small business concerns; inclusion of required contract clause; subcontracting plans; contract eligibility; incentives; breach of contract; review; report to Congress.

      
      

      1. It is the policy of the United States that small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals, shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems...the policy of the United States that its prime contractors establish procedures to ensure the timely payment of amounts due pursuant to the terms of their subcontracts with small business concerns and small business concerns owned and controlled by socially and economically disadvantaged individuals.

      2. The clause stated in paragraph (3) shall be included in all contracts let by any Federal agency except any contract which...

      3. The clause required by paragraph (2) shall be as follows:

         1. It is the policy of the United States that small business concerns and disadvantaged individuals shall have the maximum practicable opportunity to participate in the performance of contracts let by any Federal Agency, including contracts and subcontracts for subsystems, assemblies, components, and related services for major systems... .

         2. The contractor hereby agrees to carry out this policy in the awarding of subcontracts to the fullest extent consistent with the efficient performance of this contract... .

         3. As used in this contract, the term "small business concern" shall mean a small business as defined pursuant to section 3 of the Small Business Act [15 U.S.C.A. 632] and relevant regulations promulgated pursuant thereto. The term "small business concern owned and controlled by socially and economically disadvantaged individuals" shall mean a small business concern... .

            1. which is at least 51 per centum owned by one or more socially and economically disadvantaged individuals; or, in the case of any publicly owned business, at least 51 per centum of the stock of which is owned by one or more socially and economically disadvantaged individuals; and

            2. whose management and daily business operations are controlled by one or more of such individuals.

   
   

   The contractor shall presume that socially and economically disadvantaged individuals include Black American, Native Americans, Asian Pacific Americans, and other minorities, or any other individual found to be disadvantaged by the Administration pursuant to section 8(a) of the Small Business Act [15 U.S.C.A., 637(a)]. (Emphasis added.)

   
   

4. As can be seen, the multiple chain of incorporation by reference of the definition of "socially and economically disadvantaged" ends with a reference to "Native Americans" and no further definition.

   
   

5. Therefore, whether a person is a bona fide member of a minority group is a question of fact on which Petitioner has the burden of proof. The key facts which Petitioner must show is not only his claim of minority membership, but also the fact that the claimed minority community recognizes him as a member of that minority group. In this case, the evidence is clear that Petitioner is a Creek Indian and is so recognized by the tribe and the federal government. Petitioner clearly falls within the Native American category and as such is presumed to be socially and economically disadvantaged for purposes of certification as a DBE.

   
   

6. However, this presumption is rebuttable by the Department. The burden of proof therefore shifts to the Department to prove by a preponderance of the evidence that the Petitioner was not a socially and economically disadvantaged individual.

   
   

7. The United States Department of Transportation has promulgated 49 CFR, part 23, to implement STURRA and provide guidelines for state "recipients" who receive federal highway funds. Relevant provisions of 49 CFR, Part 23 are:

   
   

   Subpart D - Implementation of Section 105(f) of the Surface Transportation Assistance Act of 1982.

   
   

   Section 23.61 Purpose.

   1. The purpose of this subpart is to implement section 105(f) of the Surface Transportation Assistance Act of 1982 (Pub.

      L. 97-424) so that except to the extent that the Secretary determines otherwise, not less than ten percent of the funds authorized by the Act for the programs listed in section

      23.63 of this subpart is expended with small

      business concerns owned and controlled by socially and economically disadvantaged individuals.

      
      

      Section 23.2 Definitions.

      The following definitions apply to this subpart. Where these definitions are inconsistent with the definitions of Section

      23.5 of this part, these definitions control for all other purposes under this part.

      
      

      "Act" means the Surface Transportation Assistance Act of 1982 (Pub. L. 97-A24).

      Disadvantaged business" means a small business concern: (a) which is at least 51 percent owned by one or more socially and economically disadvantaged individuals, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more socially and economically disadvantaged individuals; and

   2. whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.

      "Small business concern" means a small business as defined pursuant to section 3 of the Small Business Act and relevant regulations promulgated pursuant thereto.

      "Socially and Economically Disadvantaged Individuals" means those individuals who are citizens of the United States (or lawfully admitted permanent residents) and who are Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, or Asian- Indian Americans and any other minorities or individuals found to be disadvantaged by the Small Business Administration pursuant to section 8(a) of the Small Business Act.

      Recipients shall make a rebuttable presumption that individuals in the following groups are socially and

      economically disadvantaged individuals in the following groups are socially and economically disadvantaged. Recipients also may determine, on a case-by-case basis, that individuals who are not a member of one of the following groups are socially and economically disadvantaged.

      1. "Black Americans" which includes persons having origins in any of the Black racial groups of Africa;

      2. "Hispanic Americans" which includes persons of Mexican, Puerto Rican, Cuban, Central or South America, or other Spanish culture or origin, regardless of race;

      3. "Native Americans" which includes persons who are American Indians, Aleuts, or Native Hawaiians;

      4. "Asian-Pacific Americans" which includes persons whose origins are from Japan, China, Taiwan, Korea, Vietnam, Loas, Cambodia, the Philippines, Samoa, Guam, the

         U.S. Trust Territories of the Pacific, and the Northern Marianas; and

      5. "Asian-Indian Americans" which includes persons whose origins are from India, Pakistan and Bangladesh. (Emphasis added.)

         
         

         Chapter 14-78, Florida Administrative Code is the rule which implements STURRA at the State level and basically restates the above federal standards in all parts relevant here.

         
         

8. Appendix C to Subpart D of 49 CFR, Part 23 provides in pertinent part:

   
   

   Recipients should continue the existing practice of making their own judgments about whether an individual is in fact a member of one of the presumptive groups. If an individual has not maintained identification with the group to the extent that he or she is commonly recognized as a group member, it is unlikely that he or she will in fact have suffered the social disadvantage which members of the group are presumed to have experienced. If an individual has not held himself or herself out to be a member of one of the groups, has not acted as a member of a community of disadvantaged persons, and would not be identified by persons in the population at large as belonging to the disadvantaged group, the individual should be required to demonstrate social disadvantage on an individual basis.

   For example, an individual could demonstrate that he had a Chinese ancestor. However, this hypothetical person has never lived in a Chinese American community, has held himself out to be white for driver's license or other official record purposes, has not previously claimed to be a Chinese American, and would not be perceived by others in either the Chinese-American community or non-minority community to be a Chinese-American (or any other sort of Asian- Pacific American) by virtue of his appearance, culture, language or associations. The recipient should not regard this individual as an Asian-Pacific American.

9. The key therefore to rebutting the presumption of Petitioner's minority status is to establish that he did not suffer the social and economic disadvantage which members of the defined minority groups are presumed to have experienced. The Department did not produce sufficient evidence to demonstrate Petitioner did not suffer from the social and economic hardships of Native Americans. In fact the evidence demonstrated that Petitioner did suffer from such hardships. One such social hardship was being forced to hide his Indian heritage. The example cited above is clearly distinguishable from the facts of this case since the example does not contain the secondary class citizenship caused by being unable to declare and take pride in an individual's minority heritage.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered granting the application of Jim

Neel and Associates, Inc. for certification as a Disadvantaged Business Enterprise.

DONE and ENTERED this 19th day of April, 1989, in Tallahassee, Leon County, Florida.

DIANE CLEAVINGER

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1989.

ENDNOTE

1/ Mr. Neel was not aware of the existence of a Creek Tribe in his home area of Panama City until 1986. When he discovered its existence he became a member.

He has served as both Chief and Vice Chief of the Tribe.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-5739

The facts contained in paragraph 1 and 2 of Respondent's Proposed Findings of Fact are subordinate.

The facts contained in paragraph 3, 4, and 6 of Respondent's Proposed Findings of Fact are adopted in substance insofar as material.

The facts contained in the first sentence of paragraph 5 of Respondent's Proposed Findings of Fact are adopted. The remainder of the paragraph was not shown by the evidence.

The facts contained in paragraph 7 of Respondent's Proposed Findings of Fact were not shown by the evidence.

COPIES FURNISHED:

Sandra G. Atkins, Esquire 203-A East Fourth Street Panama City, Florida 32401

Bruce A. Campbell, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32399-0458

Kaye N. Henderson, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32399-0450

Thomas H. Bateman, III, Esquire General Counsel

Department of Transportation

562 Haydon Burns Building Tallahassee, Florida 32399-0458

Docket for Case No: 88-005739

Orders for Case No: 88-005739