STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TOMMY C. CHASTAIN, III, )

)

Petitioner, )

)

vs. ) CASE NO. 96-2275

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for formal hearing before P. Michael Ruff, duly-designated Hearing Officer of the Division of Administrative Hearings, on June 17, 1996, in Tallahassee, Florida.

APPEARANCES

For Petitioner: G. Keith Quinney, Jr., Esquire

Bryant, Miller & Olive, P.A.

201 South Monroe Street, Suite 500 Tallahassee, Florida 32301

For Respondent: Peter S. Fleitman, Esquire

Brian F. McGrail, Esquire Post Office Box 6668

Tallahassee, Florida 32314-6668 STATEMENT OF THE ISSUES

The issue to be resolved in this proceeding concerns whether the Respondent, the Department of Revenue, should allow the Petitioner, Tommy C. Chastain, III, to remain an employee of the Department, as Property Appraiser II, if the Petitioner embarks upon a candidacy for the office of Property Appraiser for Bradford County, Florida. Essentially, it must be determined whether there would be a conflict of interest between his duties as an appraiser in the ad valorem tax administration program of the Department and his candidacy for the office of County Property Appraiser.

PRELIMINARY STATEMENT

This cause arose upon the submission of a written request by the Petitioner to the Respondent Department on March 27, 1996, wherein he sought the Department's approval of his seeking political office as Property Appraiser of Bradford County, Florida, while he remains a Department employee as a Department Property Appraiser II.

The Executive Director of the Department, by letter dated April 16, 1996, denied that request. The denial stated that the Department could not certify to the Department of Management Services, pursuant to Section 110.233, Florida

Statutes, that the Respondent's candidacy would involve "no interest which conflicts or activity which interferes with the state employment of the Petitioner with the Respondent agency".

The Petitioner submitted a written request to the Department on May 1, 1996, opposing the denial. The Respondent agency forwarded it to the Division of Administrative Hearings on May 10, 1996 based upon its belief that a dispute of material facts calling for a formal administrative proceeding had been raised by the Petitioner.

The cause came on for final hearing as noticed. The Petitioner offered one exhibit, which was admitted into evidence. The Respondent offered three exhibits, which were admitted into evidence. The Petitioner testified on his own behalf, and the Respondent presented the testimony of Lance Larson, a Revenue Program Administrator, as well as Steve Keller, a Chief Attorney in the property tax administration section of the Department's General Counsel's Office.

Subsequent to the hearing, a transcript of the proceeding was obtained and, by mutual agreement, Proposed Recommended Orders were to be filed by June 20, 1996. Thereafter, upon the Petitioner's request and the Department's agreement, the deadline for filing Proposed Recommended Orders was extended to June 26, 1996. The Proposed Recommended Orders were timely filed. The proposed findings of fact contained therein are addressed in this Recommended Order and again specifically ruled upon in the Appendix attached hereto and incorporated by reference herein.

FINDINGS OF FACT

1. The Petitioner, Tommy C. Chastain, III, is a Property Appraiser II (appraiser) employed by the Respondent, State of Florida, Department of Revenue (Department). The Petitioner has been employed in that capacity in excess of 12 years.

   
   

2. The Respondent is an agency of the State of Florida charged with enforcing and carrying out the taxing authority of the State of Florida, embodied in Chapter 212, Florida Statutes, and other extant law. Its regulatory authority, in raising state revenues through taxes, includes regulatory oversight and the certification process concerning county ad valorem tax rolls and related tax administration.

   
   

3. On or about March 27, 1996, the Petitioner submitted a written request to the Department's Executive Director, Mr. Fuchs, requesting authorization to seek political office as a Property Aappraiser, a county officer, of Bradford County, Florida, while remaining an employee of the Department. This request was made pursuant to Rule 60K-13, Florida Administrative Code, a rule of the Department of Management Services (DMS) concerning the circumstances under which employees of the State of Florida may obtain permission to seek political office. This rule embodies an examination and determination of whether such candidacies pose conflicts with the duties and responsibilities of such a candidate's state employment.

   
   

4. The Executive Director denied the request on April 16, 1996 on the basis that the Department was unable to certify, under prevailing DMS rules and Florida Statutes, that the Petitioner's candidacy would involve "no interest which conflicts or activity which interferes" with the Petitioner's state employment with the Department. The Petitioner sought a formal proceeding

   before the Division of Administrative Hearings to contest that initial determination.

   
   

5. The Petitioner has been employed with the Department since 1983. Approximately two years after he was so employed, the Petitioner's wife was elected to the School Board of Bradford County, Florida. Due to his wife's position on the Bradford County School Board, the Petitioner requested and the Respondent, through the Petitioner's supervisor, agreed that the Petitioner should not and would not be assigned to do the Department's appraisal work in and with regard to Bradford County and its tax rolls. This was due to a perceived conflict of interest, or the possibility thereof, on the part of both the Petitioner and the Respondent. It was a voluntary arrangement. Since that time, the Petitioner has not been assigned to do any appraisal work related to Bradford County.

   
   

6. The duties of a property appraiser for the Department, such as the Petitioner, involve assisting county property appraisers and employees in the county appraiser's office in appraisal techniques, to arrive at estimated values concerning commercial, residential and personal property. The Department appraiser administers policies and procedures pertaining to appraisal of real and personal property, set forth in the Florida Statutes and policies, rules and regulations of the Department, and it consults with all levels of government officials, as well as property owners and private appraisers, concerning problems involving appraisal of real and personal property. The Department property appraiser also investigates and reports on conduct and performance of county officials involved in the ad valorem taxing process. The property appraiser also investigates taxpayer complaints and applies the appraisal process, as defined by the American Institute of Real Estate Appraisers, to arrive at estimated values for these types of property.

   
   

7. The appraisal studies performed by employees, such as the Petitioner, for a given tax year, are kept confidential from the county property appraiser, until a year-end review is conducted between the county and Department, pursuant to Section 195.096(2)(e), Florida Statutes.

   
   

8. The Petitioner is assigned to the Lake City Regional Office in the property tax administration program. He does not perform appraisal work in and for Bradford County nor has he worked with that county's property appraiser or his staff. It is possible, however, that based upon legitimate business decisions by the Department, including considerations of saving expense funds, that he could be assigned to perform appraisal work in any county in the Lake County region, including Bradford County, although that has not been the case heretofore.

   
   

9. The Petitioner's duties and responsibilities entail safeguarding certain confidential tax information, pursuant to Department directive 0101.10 and Section 6103 and 7213, of the Internal Revenue Code (IRC), as well as pursuant to various internal security procedures for safeguarding confidential information, including procedures and policies for safeguarding information sources, mandated by the Department's rules and policies.

   
   

10. The Department appraisers are relied upon for their independent professional judgment in performing their duties and responsibilities involved in appraising property and in the tax administration process for the counties under their audit authority. Conflicts may arise between the Department appraiser and the county Property Appraiser. Judgmental adjustments to comparable sales transactions in a county that indicate market value for

    properties being appraised may differ between that of the county Property Appraiser and the Department appraiser, thereby affecting the measurement of the overall tax rolls the county Property Appraiser is required to submit to the Department for approval, pursuant to statute.

    
    

11. The Petitioner's current duties and responsibilities provide him with access to information within the Lake City regional office files which include information related to Bradford County's assessment levels for a particular year, even though he himself is not assigned to work in the Bradford County taxing appraisal and tax roll approval process. Such information is available to the Petitioner prior to it becoming known to the Bradford County Property Appraiser, the official the Petitioner seeks to oppose in the upcoming election.

    
    

12. County Property Appraisers make the determination of how to increase assessment or just value on each parcel of real estate and the amount of assessment valuation increase on homestead property, by authority of Sections

    193.011 and 193.155, Florida Statutes. The Department is charged with oversight of each county Property Appraiser's office to insure that all properties are assessed at just value, with equity and uniformity.

    
    

13. The Department's goal in property tax administration is to achieve compliance with statutory standards through the aid and cooperation of the local Property Appraiser and his staff. Cooperation by the county appraisers is essential. If Department employees gather information, contemporaneously with running for office against the Property Appraiser, it would tend to arouse suspicion in the county Property Appraisers and their staffs concerning the Department's motivations. It would call into question the independence of the Department in local tax administration matters in all the counties under its jurisdiction, as well as in a particular county involved.

    
    

14. The independent judgment of Department appraisers, in performing their assessment studies for counties, is essential for the Department to determine whether the county Property Appraiser's increases and assessments are in compliance with the Department policies, administrative rules, and statutory requirements. The failure of the county Property Appraiser's tax roll to comply with the Department standards can result in disapproval of the county tax roll, which, in turn, may lead to punitive, interim roll procedures and ultimately culminate in litigation if the discrepancies are not amicably resolved. The Department appraiser performing such assessment studies for the year in controversy would likely be required to testify and ultimately defend his or her work product in litigation in a manner adverse to the interests of the county Property Appraiser.

    
    

15. Moreover, appraisal studies performed by a Department appraiser for one county can affect the appraisal assessments in another county. The Department develops a "systematic base rate" for use in the appraisal system, from data gathered from a particular region, including appraisal data for the entire region. Data gathered for the Lake City region, where the Petitioner practices, would include data for Bradford, Baker, Union and Alachua Counties, as well as for southern Clay County, in determining what rate would be appropriate for any of those counties for individual base rates. Thus, the appraisal work performed by the Petitioner, even though he does not do appraisal work in Bradford County, can affect the appraisal assessments in Bradford County.

    
    

16. The Department appraisers are called upon to resolve disputes over tax roll assessments in counties other than that in which they are regularly

    assigned. The Petitioner, for instance, has been called upon to provide aid and assistance in the Jacksonville Regional Office in this capacity, during the time he has been assigned to the Lake City Regional Office.

    
    

17. Confidential appraisal information generated by the county Property Appraisers and their staff is available to all the Department appraisers within a particular region, as is confidential appraisal information generated by a Department appraiser assigned to a particular county in that region. The Petitioner has, and has had, access to all confidential appraisal information pertaining to Bradford County, in his Lake City Region, even though he himself is not assigned to do appraisal work in Bradford County. He has had access to that information prior to the information being made available to the Bradford County Property Appraiser.

    
    

18. The Department's goal, through its aid and assistance to the county Property Appraisers, is for the Property Appraisers in the counties to meet their statutory and constitutional obligations and have their tax rolls approved by the Department. If the county tax rolls are not in compliance with the Department assessments, and issues are not reconciled within 90 percent of the Department's assessment values, then the Department will issue review notices or administrative orders directing compliance. Such disputes can culminate in litigation.

    
    

19. In order to avoid disruption to the tax administration process and to the impartial and independent appraisal judgment exercised by the Department's appraisal staff, as well as by the county appraisal staffs, it is essential that the atmosphere of trust, confidence and reliance on the exercise of independent judgment by the Department's appraisers, and by the county appraisers, be maintained. In the Department's experience, the candidacy of a Department appraiser for the local county Property Appraiser's office can easily arouse suspicion and distrust on the part of the county Property Appraisers towards the Department's tax administration staff and its appraisers. It can foster the belief in the county Property Appraisers, even if mistaken, that the Department is fostering the candidacies and elections of its own staff members with their own ideas and judgments concerning appraisal processes and techniques against the interests of the incumbent appraisers and their counties. This is a state of affairs the Department must assiduously seek to avoid, which is why it has historically followed a policy of not approving its property appraisers' candidacies for county Property Appraiser offices while they are still Department employees.

    
    

20. The property tax administration program is primarily responsible for measuring the relevant levels of assessment of property in the state between the various counties and certifying that level for each county annually for the Department of Education, for use in disbursement of general revenue funds to the counties based upon the relevant levels of assessment in reference to a statewide average level of assessment. Thus, as an incident of that function, the tax rolls of each county must be approved each year by the Department.

    
    

21. In the appraisals conducted by both the county appraisers and the Department, of the sampled properties that are provided in any county, the methodologies that are used to appraise the property depend on the independent, impartial judgment of the appraiser doing the appraisals and applying that methodology.

    
    

22. A candidate for the Property Appraiser office has the ability to affect that judgment and call into question the product of those appraisals and

    methodologies (Department employee candidate). If tax rolls are litigated in any county in which those appraisals were done, or in counties bordering on those counties, the appraisals could be called into question in the course of litigation of those tax rolls if disapproved by the Department, as analogous appraisals. The appraisers who performed those appraisals for the same county or for neighboring counties, which were called into question in disputes with the Property Appraiser of a particular county, could be called as witnesses to defend their work product, even though their work was done in and for different counties in the Department's region from the litigating county.

    
    

23. The Department appraiser has the ability to call into question the methodologies used in any county in the state. Even if that Department appraiser was not assigned to the county in question, under the Department's practice in the Petitioner's regional office, the appraisers for the various counties have a review function over the appraisal work done for any particular county, a sort of "peer review process". Because of this process and their access to the confidential records pertaining to any county in their region, a Department appraiser who is a candidate for the county Property Appraiser's office against an incumbent, in a county in his region, could thus have access to information which might be advantageous to his political campaign. Access and use of this information, even if only a possibility and not actually practiced by such an appraiser candidate, would jeopardize the Department's relationship of cooperation and trust with each of the county Property Appraisers.

    
    

24. The county Property Appraiser, in turn, has the ability to call into question both the appraisals made by the Department's field appraisers in other counties and the methodologies applied in those appraisals, the policies of the Department that underlie those methodologies, the decision-making process for which those methodologies and policies were decided and the administration of property taxes in general by the Department. They can do this through the vehicle of disputing formally or informally the application of Department appraisal techniques, methodologies and policies in his or her own county.

    
    

25. The Department thus has a concern and a very real interest in maintaining the perception, in the administration of its taxing authority, that the independent and impartial adherence to the revenue statutes and policies involved is maintained. The Department has a real concern that if it authorizes one of its appraisers to run for the county Property Appraiser's office, the Department's policies would be perceived as motivated by an effort to install replacements to the incumbent county Property Appraisers who are more favorable to the Department's view of tax appraisal and assessment methodologies and policies.

    
    

26. If the credibility of the Department's decision to disapprove a county's tax roll is called into question because a Department appraiser is challenging that incumbent property appraiser, the Department would be prejudiced during the litigation over disapproval of that county's tax roll. This is due to the fact that a candidate for Property Appraiser, rather than a disinterested Department employee, will have performed some of the appraisal work, even if done in a different county, upon which the Department is relying to defend its litigation position and its appraisal methodologies and policies by the means of comparing independent and purportedly analogous appraisal methodologies and practices by the Department in the various neighboring counties.

27. In Lake County, Florida, for example, the current county Property Appraiser is now being challenged by a former Department appraiser. That former Department appraiser's work product in a neighboring county has been called into question and made the subject of the political campaign in the media. The methodologies used by the former Department appraiser, the appraiser's competency in applying those methodologies, the appraiser's training and level of education, and the Department's policies and the decision-making process under which those policies were selected, have been called into question in the political campaign.

    
    

28. In a like vein, the appraisal methodology used by the Department for Dixie County has been introduced into litigation presently occurring in Levy County. The issue is the neighboring county's methodology for applying and calculating the "base rate", which is a unit of measurement per square foot for dollar valuation of structures.

    
    

29. The county Property Appraisers have knowledge of how the Department appraisers and other counties apply Department policy and the Department appraisers assigned to each county know how their counterparts assigned to neighboring counties apply appraisal principles in Department appraisal policy. They know this because they have direct access to the confidential appraisal- related records as to each county in their region and, moreover because, as found above, they engage in a "peer review" of each other's audit and appraisal work periodically. Because of this knowledge of or access to confidential information pertaining to any particular county by any Department appraiser assigned to any county in that same region, that appraiser could have an undue advantage in a political campaign. The county Property Appraisers, of course, realize this. If the Department countenanced such employed Department appraisers opposing county Property Appraisers for election, immediate distrust and suspicion of the Department's motives would arise on the part of the county Property Appraisers. Thus, such a candidacy by a still-employed Department appraiser would represent a conflict of interest with his continued employment with the Department, which requires the maintenance of both the appearance and the fact of independent, impartial exercise of appraisal judgment and the maintenance of confidentiality of the tax administration-related records pertaining to any county.

    
    

30. The appraisal studies, along with all documentation attendant thereto, are confidential until they are completed for the year-end assessment. The findings therein are then discussed with the county Property Appraisers. Only after that time do they become public record. Section 196.095(2)(e), Florida Statutes.

    
    

31. In summary, the candidacy for the office of county property appraiser by a still-employed Department appraiser presents a real conflict of interest between the Petitioner's employment with the Department in that circumstance and the Department's statutory mission, which includes, as a necessary part, the maintenance of a cooperative relationship between the Department tax administration personnel and the county Property Appraisers. There exists the possibility that the platform or public statements of the Petitioner as a candidate would conflict with the Department's administration and interpretation of the tax laws under Chapters 192-197, Florida Statutes, which could impair the essential reputation of the Department for impartiality and independent judgment in appraisal work and administration of the tax laws among all of the counties under its jurisdiction. This would create a direct conflict with the Petitioner's continued state employment under those circumstances.

    CONCLUSIONS OF LAW

    
    

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

    
    

33. In order for the Petitioner to remain an employee of the Department while a candidate for Property Appraiser for Bradford County, Section 110.233(4), Florida Statutes, requires that the Department certify to DMS that the candidacy involves no interest which conflicts, or activity which interferes, with the Petitioner's state employment. See Sections 97.021(3) and 106.011(16), Florida Statutes. Those sections state that a candidate is any person who seeks to "qualify for election", or any person who appoints a treasurer and designates a primary depository. A candidate's "campaign activities often predate qualifying activities by months", and Section 110.233, Florida Statutes, does not limit the pre-authorization requirement to only those persons who have actually qualified. See, Humphries v. Department of Highway Safety and Motor Vehicles, 400 So.2d 1311 (Fla. 1st DCA 1981).

    
    

34. The candidacy for holding local public office shall be presumed to involve an interest which conflicts with an employee's state employment when the campaign of the office, if elected, is likely to give rise to a situation in which regard for a private or local interest tends to lead to a disregard of the employee's duty as a state employee. Rule 60K-13.002(3), Florida Administrative Code. The Petitioner bears the burden of establishing entitlement to the relief sought in this proceeding. Department of Transportation v. J.W.C. Company, 396 So.2d 778 (Fla. 1st DCA 1981). The entitlement to the relief sought by the Petitioner must be supported by a preponderance of the evidence. Agrico Chemical Company v. DER, 365 So.2d 759 (Fla. 1st DCA 1979).

    
    

35. Through the position of Appraiser II, the Department supervises, reviews and approves the tax rolls prepared by the elected property appraisers in each county annually, under Sections 195.002, 195.096, and 195.097, Florida Statutes. Under these provisions, tax roll assessment levels are ultimately quantified to determine the relative position of each county around the statewide average assessment level, for the purpose of equalizing school funding under Section 236.081(4), Florida Statutes. Each county's relative ranking dictates the amount of additional required school district taxes which must be levied in each county. As a result, it is imperative that the Department, acting through its appraisers, maintain impartiality in evaluating the tax rolls annually in all counties.

    
    

36. The position of Appraiser II with the Department requires assistance to the county Property Appraisers in complex property appraisal techniques and review of their procedures and work product. The position of Appraiser II plays an integral part in the approval of the county tax rolls prepared by elected county property appraisers annually.

    
    

37. The Petitioner's candidacy could influence his choice and analysis of comparable sale parcels in adjoining counties and Department appraisals, methods, and findings. According to the Appraiser II position description, the Petitioner would be required to investigate and report on the conduct and performance of the office he is seeking as to the counties under his appraisal assignment. Indeed, the Department could, if it chose, assign him directly to Bradford County. As such, therefore, a conflict of interest or interference of activity could be presumed under Rule 60K-13.002, Florida Administrative Code. Due to the Department's statutorily-mandated supervision of the office of county

    property appraiser, there cannot be a certification that an Appraiser II's candidacy, while employed by the Department, will involve no interest which conflicts, or activity which interferes, with that individual's state employment within the definitions provided in Section 110.233(4), Florida Statutes.

    
    

38. The Department appraiser's responsibility is to appraise at fair market value a sample of properties generated from the Department's Tallahassee office and provided to its appraisers in the field. The values arrived at by the staff appraisers are compared to those arrived at by the local county Property Appraisers at the end of each study, prior to submission of the tax rolls on July 1st of each year. In addition to ministerial responsibilities for gathering the factual configurations of the property being appraised, there are numerous areas of appraisal judgment underlying the staff appraiser's appraisal function, including the age of structures, the effective age, size, shape and utility of the land, its potential uses, and requirements of statutes concerning highest and best use. As expressed by the Supreme Court in Powell v. Kelly, 223 So.2d 305, 309 (Fla. 1969), ". . . the appraisal of real estate is an art, not a science". The court in Powell acknowledged that there may be certain guidelines for standard measures of value, the use of which may be mandatory in appraisal work; but their application to various situations calls for exercise of judgment by the appraiser. The standard measure of value might direct property appraisers to use a certain approach but would not necessarily bind or determine the "just value" or "market value" of the property. The standard measure of value, when properly determined, may be a science; but according to the court, the ultimate determination of "just value" is "art".

    
    

39. It is thus reasonable for two appraisers appraising the same property to arrive at a different valuation due to the difference in appraisal judgment in its exercise between those two appraisers. This variance can be as much as ten percent between two appraisers or ten percent between the county's tax roll and the Department appraiser's valuation and assessment for that particular county. The accuracy and validity of a Department staff appraiser's chosen appraised values for the properties is dependent upon and presumes the impartial exercise of appraisal judgment. The appraisal judgment of a staff appraiser of the Department would be called into question by his candidacy for the local Property Appraiser's office. Additionally, because of the Petitioner's candidacy, his bias and credibility would be called into question, thereby jeopardizing the Department's ability to evaluate the county tax rolls in Bradford County or in any county in which that appraiser had appraised property, after deciding to become a candidate.

    
    

40. Both the valuation, the product of those appraisals, and the methodologies underlying the appraisals, would be questioned as a matter of the appraiser's judgment, were that appraiser a candidate for the office of county Property Appraiser. The Department would not be able to rely on that appraiser's work if he were a candidate. In the past, the candidacy of a Department appraiser has resulted in his own appraisals and methodologies being called into question even in the county in which he was not a candidate.

    
    

41. This type of situation would jeopardize the Department's ability to defend its appraisal work in litigation, actually in any county under its jurisdiction. Litigation is the tool or threat which the Department must use to help secure cooperation of a county Property Appraiser to submit tax rolls which are approvable under extant law. See Section 193.1145, Florida Statutes. It is essential that the Department maintain the credibility of its litigation deterrent or tool, without its being weakened by the practice of employing property appraisers whose appraisals and underlying methodologies can be derided

    through the circumstance of their being candidates for the public office of county Property Appraiser during the time when they were working for the Department, performing such appraisals and using such policies and methodologies.

    
    

42. Cooperation between the local county property appraisers and the Department is essential and is dependent on the credibility and a lack of political motivation of Department employee appraisers, which could threaten county Property Appraisers and disrupt that cooperation. This is an essential, substantial interest of the Department and its health is dependent upon the Department's employing appraisers whose independence and impartiality of judgment is unimpaired by the potentiality for the self-interest possibility posed by the candidacy of an appraiser situated as the Petitioner in this proceeding. Cooperation, as a means by which the Department and county Property Appraisers insure equity and uniformity in appraisal values and methodologies, was specifically recognized with approval in Spooner v. Askew, 345 So.2d 1055 (Fla. 1976). In that decision, the Supreme Court opined that:

    
    

    the mandate of 'just valuation' derives from the Constitution. The requirement of statewide uniformity derives from statute. The latter

    is more a goal than a compellable right, and it would be naive to expect instant statewide uniformity merely because that goal had been announced by law. The legislature commendably desired to create uniformity of assessments in Florida, but its ability to do so must remain conditioned by the Constitution's directive that a class of county officers are assigned

    the primary responsibility to perform assessment functions. At best the legislative goal can be achieved only incrementally through the cooper- ative efforts of the assessors and the Department, by the development of procedures which will accommodate the responsibilities of both.

    
    

43. In the past, the methodology used by a county property appraiser in a particular county, as alluded to in the Findings of Fact, has been used to impeach or place at issue a county Property Appraiser's methodology in another county. The appraisal methodology in Dixie County is presently at issue and has become involved with an issue being litigated in Levy County.

    
    

44. A greater than ten percent variance in the assessment values between the Department and county appraiser can be the result of a Department appraiser's candidacy for office of county property appraiser in any given county election. This could result in an otherwise unwarranted tax roll disapproval due to the ten percent variance. A greater than ten percent variance could occur between the candidate Department appraiser's assessed values and the proper value he would choose if he were an unbiased, disinterested non-candidate. This could also result in unwarranted approval of a tax roll that is, in fact, undervalued. In turn, this could reasonably result in greater state funds going to that particular county and diverted away from other counties. The methodology used in other counties by a Department staff appraiser who is a candidate could be used to impeach the methodology of the county property appraiser in the county in which the Department staff appraiser was a candidate. Acknowledging that the Department has a tier or review of staff appraisers by senior appraisers, if the reviewers are relied on to catch

    these types of errors, there is still a conflict with the Department's interest and the self-interest of the candidate which disrupts that review and approval process, particularly if the candidate staff appraiser happens to disagree with the reviewer's findings.

    
    

45. The Petitioner's position as a Department employee requires that he audit assessment levels of county tax rolls in the northeast Florida region to insure uniformity in the distribution of state school funds to school districts. The county tax rolls must be approved by the Department before taxes can be levied by the counties. The Department then certifies the county assessment levels to the Commissioner of Education for use in the school-funding formula, Florida Educational Funding Program, the formula for distributing state revenue funds based upon relative levels of assessment. Thus, the Department has an interest in maintaining independence from the local administration of ad valorem taxes. As a staff appraiser with the Department, the Petitioner has had, and still has, access to information on the appraisal study in progress, which is confidential until the study results are presented and reviewed with the county Property Appraiser in any given county in that Lake City region. The data and samples are confidential under Section 195.096(2)(e), Florida Statutes, and exempt from Chapter 195, Florida Statutes. Some of this data is developed for needed use on a regional basis to which all staff appraisers in a particular region have access.

    
    

46. The Petitioner's wife is an elected school board member in Bradford County. The Department endeavored to avoid or remove the potential for conflict of interest regarding the Petitioner's employment as a Department appraiser and his wife's political office, by not assigning the Petitioner to work in Bradford County. That agreement has been in effect for over ten years. Given that degree of perceived conflict on both the part of the Petitioner and the Department, there is, however, a much greater potential for conflict based upon those mutually-understood circumstances, while the Petitioner, as a Department employee of the property tax administration program, would at the same time, be campaigning for the elected office of Property Appraiser in the county over which the Department has supervisory, regulatory and punitive authority.

    
    

47. The subject of the campaign could easily involve questions of the merits of the performance of the incumbent county Property Appraiser, which is precisely what the Department statutory responsibility in that county requires. If the Petitioner, during the course of the campaign, criticized the incumbent Property Appraiser's tax roll, which had been approved by the Department for that year, the question would arise whether the Petitioner was acting as the candidate or the Department appraiser. Presumably, he would hold himself out as acting in his private, individual capacity as a candidate for office and not as a Department spokesman. In that case, however, he would not only be criticizing the county Property Appraiser's performance in pursuit of his own political interest, but he would also be criticizing the Department's performance and approval of that tax roll, which the Petitioner himself may have participated in developing through his own appraisal work for that previous year, even though he worked in different counties.

    
    

48. The Petitioner's work product in the Lake City region would be incorporated into the assessments determined by the Department to compare and approve or disapprove each county's tax roll in that region. Therefore, if the Petitioner's criticism is at odds with the Department's in-depth study of the Bradford County tax roll, then the Petitioner's position would be adverse, would conflict with, and, therefore, interfere with his employment with the Department. As a result, the Petitioner's interest as a candidate for Bradford

    County property appraiser would directly and materially conflict with his interests as a Department employee appraiser and the Department's own statutory responsibilities, as more particularly delineated in the above Findings of Fact. The Petitioner's candidacy could implicate self-interest into the appraisal process.

    
    

49. The real possibility of the taxpayers' inability to distinguish the Petitioner's campaign platform from the Department's own interpretation of property tax administration law presents a real conflict of interest between the Petitioner's employment with the Department, the Department's statutory mission and the Petitioner's candidacy for Bradford County property appraiser. There exists the possibility that the Petitioner's platform or public statements as a candidate would conflict with the Department's administration and interpretation of the tax laws under Chapters 192-197, Florida Statutes, which could impair the essential reputation of the Department for impartiality and independent judgment in administering tax laws among all of the counties, thereby creating a direct conflict with the Petitioner's state employment.

RECOMMENDATION

Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is

RECOMMENDED that a Final Order be entered by the Department of Revenue denying certification that the Petitioner's candidacy for the office of Property Appraiser for Bradford County involves no interest which conflicts with or activity which interferes with his state employment and thus denying authorization for him to become a candidate for that office while remaining employed by the Department of Revenue, for purposes of Section 110.233(4)(a), Florida Statutes.

DONE AND ENTERED this 1st day of August, 1996, in Tallahassee, Florida.

P. MICHAEL RUFF, 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 1st day of August, 1996.

APPENDIX TO RECOMMENDED ORDER

Petitioner's Proposed Findings of Fact

1-11. Accepted, but not in themselves materially dispositive of the issues presented for resolution by the Hearing Officer.

Respondent's Proposed Findings of Fact

1-26. Accepted, except to the extent modified by the Hearing Officer.

27. Rejected, as immaterial due to its speculative nature.

28-43. Accepted, except as modified by the findings of fact of the Hearing Officer.

COPIES FURNISHED:

G. Keith Quinney, Jr., Esquire Bryant, Miller & Olive, P.A.

201 South Monroe Street, Suite 500 Tallahassee, FL 32301

Peter S. Fleitman, Esquire Brian F. McGrail, Esquire Post Office Box 6668 Tallahassee, FL 32314-6668

Linda Lettera, General Counsel Department of Revenue

204 Carlton Building Tallahassee, FL 32399-0100

Larry Fuchs, Executive Director Department of Revenue

104 Carlton Building Tallahassee, FL 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit to the agency written exceptions to this Recommended Order. All agencies allow each party at least ten days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the Final Order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the Final Order in this case.

Docket for Case No: 96-002275

Orders for Case No: 96-002275