STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA DEPARTMENT OF CITRUS, )

)

Petitioner, )

)

vs. ) CASE NO. 81-1112RX

)

OFFICE OF THE COMPTROLLER, )

DEPARTMENT OF BANKING AND )

FINANCE, )

)

Respondent. )

)

FINAL ORDER

Petitioner, Florida Department of Citrus, filed a "Petition to Seek Administrative Determination" of the invalidity of a rule of the Respondent, Office of the Comptroller. Petitioner is seeking an order declaring that Respondent's Rule 3A-40.101 constitutes an invalid exercise of delegated legislative authority. By Order entered April 27, 1981, the Director of the Division of Administrative Hearings assigned the matter to the undersigned Hearing Officer. The final hearing was scheduled by notice dated April 28, 1981, to be conducted on May 19, 1981. The parties requested a continuance, waived the time limitations set in Section 120.56, Florida Statutes, and the final hearing was rescheduled and conducted on May 29, 1981.

FINDINGS OF FACT

1. Petitioner is a department of state government headed by the Florida Citrus Commission. Petitioner collects various excise taxes on boxes of citrus fruit. When taxes are collected, they are deposited in a bank account in Lakeland, Florida. The next day the funds are transferred to the state general revenue account in Jacksonville, Florida. This account is administered by Respondent. Such transactions are accomplished daily. The funds deposited in the state account accrue interest for the State's general revenue, but not for Petitioner's specific use. When Petitioner does not have an immediate need for money that it has deposited in the state account, it advises the Respondent to transfer the funds to accounts administered by the State Board of Administration for investment in bonds. Interest derived from these investments accrues for the benefit of the Petitioner, except that the Board of Administration imposes a charge for its services. When Petitioner needs money, it advises the Board of Administration to transfer funds back to the state account.

   
   

2. Respondent imposes a two percent fee upon money deposited by Petitioner in the state account. After investments by the State Board of Administration were first authorized in 1965, the Respondent developed a policy of imposing its fee on interest income generated by the State Board of Administration's investments. Thus, when Petitioner's money was transferred back from the State Board of Administration to the general state account, Respondent would impose a two percent deduction on the interest income.

3. On November 19, 1979, the Office of the Attorney General issued a formal opinion that the interest generated by investments of the State Board of Administration were not subject to the Respondent's fees. Respondent thereafter refunded fees that had been collected on that basis to Petitioner.

   
   

4. Respondent filed its Rule 3A-40.101, Florida Administrative Code, with the Office of the Secretary of State on March 2, 1981. The rule reestablishes Respondent's former policy of imposing a deduction on interest income earned and reported on investments by the State Board of Administration. Respondent has implemented the rule and imposed its two percent fee upon Petitioner's interest income. Petitioner has initiated the instant rule challenge proceeding contending that Respondent lacks authority to impose the deduction on the interest income, and that the rule therefore constitutes an invalid exercise of delegated legislative authority.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this proceeding. Section 120.56, Florida Statutes.

   
   

6. Respondent administers various trust funds for state agencies. Respondent is authorized to deduct four percent from such trust funds which represents the estimated pro rata share of the cost of general government. Section 215.20, Florida Statutes. Among the trust funds maintained is Petitioner's. Respondent is authorized to make its deduction from: [Section 215.22(7), Florida Statutes]

   
   

   All income of a revenue nature deposited in the Florida Citrus Advertising Trust Fund created in s. 601.15(7), including transfers from any subsidiary accounts thereof, unless a different percentage is authorized in the aforementioned section.

   
   

   Under Section 601.15(7)(a), a different percentage (two percent) is specified.

   
   

7. Petitioner contends that interest income generated on its money by investments of the State Board of Administration is, by statute, not subject to the deduction and that Respondent's rule is therefore invalid. The issue is whether the interest income constitutes "income of a revenue nature." The terms "income" and "income of a revenue nature" are not statutorily defined for the purposes of Chapters 215 or 601, Florida Statutes. In interpreting statutes, the function is to ascertain and give effect to the legislative intention. Florida State Racing Commission v. McLaughlin, 102 So. 2d 774 (Fla. 1958). Legislative intent should be determined primarily from the language of the statute, and the Legislature is assumed to know the meaning of the words, and to have expressed its intent by use of the words found in the statute. S.R.G. Corporation v. Department of Revenue, 365 So. 2d 687, 689 (Fla. 1978); Renio v. State, 352 So. 2d 853, 860 (Fla. 1977). Words of common usage when used in a statute should be accorded their plain and ordinary sense. Pederson v. Green,

   106 So. 2d 1 (Fla. 1958); Freedman v. State Board of Accountancy, 377 So. 2d 1168, 1169 (4 DCA Fla. 1979). The terms "income" and "revenue" are words of common usage. They are broad and encompassing. As used in their common and ordinary sense, the words would clearly include monies derived from interest. See, e.g., the definitions of "income" and "revenue" set out in Webster's New Twentieth Century Dictionary of the English Language, Unabridged Second Edition

   (William Collins Publishers, Inc., 1980). The statutes doe not evidence any legislative desire that these words be accorded other than their common usage. It is therefore concluded that the deductions authorized by Section 215.20, Florida Statutes, apply to interest income derived from investments of trust fund monies by the State Board of Administration, and specifically to such interest income generated by the Petitioner's funds.

   
   

8. The Attorney General has issued an opinion which conflicts with the conclusion that the deduction applies to the interest income. Opinion of the Attorney General No. 079-110 (1979). At page 4 of the opinion, the Attorney General stated:

   
   

   The statutes specifically direct the deduction required by Section 215.20 to be made from the tax and revenue collec- tions described in Section 215.22, and the charges for the investment services of the State Board of Administration per- formed for a particular agency or fund to be paid from the earnings on investments held by a particular agency or fund. No mention is made in any of the aforecited statutes of any other monies or funds or charges against or deduction from any other monies or funds or any other disposition or transfers thereof to the General Revenue Fund.

   
   

   The error of the Attorney General's opinion is that he substituted the language "tax and revenue collections" for the language "income of a revenue nature" which appears in the statutes. Accordingly, the opinion has been rejected as viable authority.

   
   

9. Petitioner contends that the fact that the State Board of Administration is authorized to make reasonable charges for its investment services (Section 215.515, Florida Statutes) renders imposition of the deduction by Respondent inappropriate. This contention is without merit. Nothing in the statutes indicates that assessment of a service charge by the Board of Administration prohibits imposition of the deduction by Respondent. It is not irrational for both charges to be imposed since they are authorized for different purposes. The Board of Administration's charge is to compensate it for its investment services. Section 215.515(1), Florida Statutes. The Respondent's deduction represents the "estimated pro rate share of the cost of general government." Section 215.20, Florida Statutes.

   
   

10. Petitioner contends that even if the Respondent is authorized to impose its deduction upon interest income generated by trust accounts of other agencies, the deduction cannot be applied to interest income of its trust accounts because of the provisions of Section 601.15(7)(a), which provides:

Two percent of all income of a revenue nature deposited in this trust fund [The Florida Citrus Advertising Trust Fund], including transfers from any subsidiary accounts thereof, shall be deposited in the General Revenue Fund in lieu of the service charge provided for in s. 215.20;

provided, however, that if any monies are withdrawn from the trust fund for invest- ment, such 2 percent shall not again be charged against said monies when they are redeposited in the trust fund.

It is manifest that interest income derived from the trust fund investment could not constitute "said monies" because the interest income would be deposited in the general revenue fund for the first time. The statutory provision merely clarifies the fact that the Respondent cannot impose its deduction twice upon the same money.

FINAL ORDER

Based upon the foregoing findings of fact and conclusions of law, it is, hereby,

ORDERED:

Petitioner has failed to establish that the Office of the Comptroller's Rule 3A-40.101, Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority, and the Petition to Seek Administrative Determination is accordingly dismissed.

DONE and ORDERED this 25th day of June, 1981, in Tallahassee, Florida.

G. STEVEN PFEIFFER, 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 25th day of June, 1981.

COPIES FURNISHED:

J. Hardin Peterson, Jr., Esquire Peterson, Myers, Craig, Crews,

Brandon and Mann, P.A. Post Office Drawer BS Lakeland, Florida 33802

Walter W. Wood, Assistant General Counsel

Office of the Comptroller The Capitol, Suite 1302 Tallahassee, Florida 32301

Carroll Webb, Executive Director Administrative Procedures Committee Room 120 Holland Building Tallahassee, Florida 32301

Liz Cloud, Chief

Bureau of Administrative Code 1802 Capitol Building

Tallahassee, Florida 32301

Docket for Case No: 81-001112RX

Orders for Case No: 81-001112RX