STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GARY WAYNE CHITTY, )

)

Petitioner, )

)

vs. ) CASE NO. 90-3670

)

DEPARTMENT OF REVENUE, )

)

Respondent. )

)

RECOMMENDED ORDER

By Stipulation filed November 29, 1990, the parties waived their right to a formal administrative hearing in this matter and agreed to submit this case to the undersigned for a Recommended Order based on a stipulated factual basis.

APPEARANCES

For Petitioner: Mel Black, Esquire

2937 S.W. 27th Avenue Suite 202

Miami, Florida 33133

For Respondent: James McAuley, Esquire

Mark Aliff, Esquire Assistant Attorneys

General

Department of Revenue

Tax Section, Capitol Building Tallahassee, Florida 32399-1050

STATEMENT OF THE ISSUE

Whether the subject assessment of taxes, interest and penalties should be upheld.

PRELIMINARY STATEMENT

On July 31, 1989, Respondent issued a Notice of Jeopardy Findings and Assessment against the Petitioner under the provisions of Section 212.050, Florida Statutes. Thereafter, Petitioner filed a petition which challenged the determination that he engaged in activities that subjected him to the assessment and which challenged the constitutionality of the statutory provisions under which the assessment was made.

At the request of the parties, the time for filing memoranda of law was set for more than ten days following the filing of the stipulated facts.

Consequently, the parties waived the requirement that a recommended order be

rendered within thirty days after the transcript is filed. Rule 22I-6.031, Florida Administrative Code. All findings of fact are based on the stipulation of the parties.

FINDINGS OF FACT

1. By "Notice of Assessment and Jeopardy Findings" dated July 31, 1989, Respondent assessed Petitioner with taxes, interest, and penalties in the total amount, as of the date of the notice, of $161,724.75. This assessment was made pursuant to Section 212.0505, Florida Statutes, following an incident on February 4, 1988. The parties stipulated that this assessment was properly issued, that notice thereof was properly given to Gary Wayne Chitty, and that the mathematical calculations contained therein are accurate and correct.

   
   

2. The following findings are made as to Petitioner, Gary Wayne Chitty, pursuant to the stipulation of the parties.

   
   

   1. His full name is Gary Wayne Chitty.

      
      

   2. His social security number is 261-17-0682.

      
      

   3. His date of birth is April 27, 1953.

      
      

   4. His present residence is 6840 S.W. 12th Street, Miami, Florida.

      
      

   5. He has never declared himself a citizen of any country other than the United States.

      
      

   6. On, or before, February 1988, he knew Rafael Silvio Pena.

      
      

   7. On February 4, 1988, he held a valid multi-engine pilot's license which was issued to him by the Federal Aviation Authority.

      
      

   8. On, or about February 4, 1988, he and Rafael Silvio Pena boarded and flew an aircraft designated N6726L.

      
      

   9. He and Mr. Pena planned to fly a

      multi-engine aircraft (N6726L) from a point outside of the United States and to enter the airspace of the United States near Cedar Key, Florida and travel within the airspace of Florida to Marathon, Florida.

      
      

   10. He filed, or caused to be filed, a flight plan for said trip with Mr. Pena in advance of the trip.

       
       

   11. He loaded or caused to be loaded marijuana on the aircraft (N6726L) prior to its departure.

   12. On, or about, February 4, 1988, he and Mr. Pena flew said airplane (N6726L) from a point in the vicinity of Cedar Key, Florida, to Marathon, Florida.

       
       

   13. During said flight, the aircraft made no other landings.

       
       

   14. During the entire flight on February 4, 1988, he and Mr. Pena were the sole occupants of said aircraft.

       
       

   15. During said flight he was the pilot of N6726L.

       
       

   16. He flew this aircraft on February 4, 1988 with the full knowledge and/or consent of the airplane's owners and/or official lessees.

       
       

   17. When he took off from the aircraft's departure point on February 4, 1988, it was loaded with a large quantity of marijuana.

       
       

   18. When he took control of said aircraft and took off, he knew it was loaded with said marijuana.

       
       

   19. He discussed his plans to transport the marijuana with Mr. Pena.

       
       

   20. When he took control of the aircraft, the aircraft (N6726L) contained nineteen (19) bales of marijuana which weighted six hundred ninety-nine (699) pounds.

       
       

   21. He and Mr. Pena flew this airplane along a course towards Marathon, Florida in a manner which took it over or near Lake Okeechobee, Florida.

       
       

   22. At a point along his route, he and/or Mr. Pena caused the bales of marijuana to be jettisoned from the aircraft.

       
       

   23. The marijuana was jettisoned as part of a conscious plan or design.

       
       

   24. The marijuana that was jettisoned from N6726L during its flight on February 4, 1988, weighed a total of 699 pounds.

       
       

   25. He did not know that during this flight of February 4, 1988, his aircraft was being observed by law enforcement officers.

   26. As part of his original plan, he piloted this aircraft to Marathon, Florida, where he landed.

AA. During this entire flight the aircraft performed adequately and experienced no mech- anical difficulties.

BB. Upon his landing at Marathon, he and Mr. Pena were arrested.

CC. He knew the estimated retail value of the marijuana on board his aircraft (N6726L) was $600 per pound.

CONCLUSIONS OF LAW

1. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes.

   
   

2. Section 212.0505, Florida Statutes, provides, in pertinent part, as follows:

   
   

   (1)(a) Every person is exercising a taxable privilege who engages in this state in the unlawful sale, use, consumption, distribution, manufacture, derivation, production, transpor- tation of ... cannabis as defined in s. 893.02 ...

   
   

   * * *

   
   

   (5) Any assessment made pursuant to this section shall be deemed prima facie correct in any judicial or administrative proceeding in this state. ...

   
   

3. Mr. Chitty advances two arguments in support of his challenge to the assessment. First, he contends that none of the activities to which he stipulated occurred "in this state" as that phrase is used in Section 212.0505(1)(a), Florida Statutes. Second, he contends that the statutory scheme under which the assessment was made is unconstitutional.

   
   

4. Mr. Chitty contends that the term "in this state" as used in the statute should not be construed to include the airspace of the State of Florida. This contention is rejected. The term "in this state" is defined by Section 212.02(8), Florida Statutes, as follows:

   
   

   (8) "In this state" or "in the state" means within the state boundaries of Florida as defined in s. 1, Art. II of the Constitution of the State of Florida and includes all territory within these limits owned by or ceded to the United States.

   
   

5. Section 1 of Article II of the Constitution of the State of Florida describes the physical boundaries of the State of Florida without specifying whether the airspace above the described lands are also included within the

   described area. Neither party has cited any judicial decision that is dispositive of the issue of whether an act committed in the airspace of a state is an act committed within that State. The cases cited by the Department are closely analogous to the facts presented by this case and support the Department's interpretation of these statutes. See, Grace v. McArthur, 180 F. Supp. 331 (E.D. Ark. 1959); State v. Northwest Airlines, 7 NW.2d 691 (Minn.

   1942); Alaska Airlines, Inc. v. Department of Revenue, 769 P. 2d 193 (Or. 1989). In contrast, the case cited by Petitioner, Bragg v. State, 487 So.2d 424 (5th DCA 1986), is not analogous to the facts presented by this case.

   
   

6. The State of Florida has repeatedly exercised its police power over acts committed while flying in the airspace over its boundaries. See, for example, Sections 860.13 and 932.701-704, Florida Statutes.

   
   

7. It is concluded that the Department of Revenue has properly construed the term "in this state" to mean that one is in the State of Florida within the meaning of Section 212.0505(1)(a), Florida Statutes, when one is in the airspace flying above the physical boundaries of the State as described by Section 1 of Article II of the Constitution of the State of Florida.

   
   

8. An agency's interpretation of its rules and governing statutes is entitled to great weight and will not be overturned unless the interpretation is clearly erroneous. Health Quest Corporation, et al. v. Department of Health and Rehabilitative Services and Arbor Health Care Co., et al., 11 FALR 5427 (1989), ABC Liquors, Inc. v. Department of Business Regulation, 397 So.2d 696 (Fla. 1st DCA 1981); Department of Insurance v. Southeast Volusia Hospital District, 438 So.2d 815 (Fla. 1983).

   
   

9. The facts to which the parties stipulated establish that Mr. Chitty transported marijuana into Florida by airplane and that he delivered the marijuana by jettisoning it over Lake Okeechobee as part of a conscious plan or design. The act of flying an airplane over the State of Florida for the purpose of jettisoning bales of marijuana over Lake Okeechobee constitutes the transporting of marijuana "within" the State of Florida within the meaning of Section 212.0505(1)(a), Florida Statutes. Further, the intentional jettisoning of bales of marijuana over Lake Okeechobee as part of a conscious plan or design is an act of delivery of marijuana "within" the State of Florida within the meaning of Section 212.0505(1)(a), Florida Statutes.

   
   

10. In addition to the transporting and delivery of marijuana within the State of Florida, Respondent contends that the stipulated facts establish that Mr. Chitty engaged in the "use" of the marijuana within the meaning of Section 212.0505(1)(a), Florida Statutes. The term "use" is defined by Section 212.02(21), Florida Statutes, to mean:

    
    

    (21) "Use" means and includes the exercise of any right or power over tangible personal property incident to the ownership thereof, or interest therein, except that it does not include the sale at retail of that property in the regular course of business.

    
    

11. The stipulated facts do not address whether the marijuana was the property of Mr. Chitty or whether Mr. Chitty was acting at the instructions of the owner. Consequently, the record fails to establish that Mr. Chitty engaged in the "use" of the marijuana within the meaning of Section 212.0505(1)(a), Florida Statutes.

12. It is well settled that only courts of competent jurisdiction have exclusive, original jurisdiction to determine the constitutionality of a statute. 10 Fla. Jur. 2d, Constitutional Law, Section 47. Consequently, the undersigned is without the jurisdictional authority to make any recommendation or conclusion based on the contention that the underlying statutory scheme is unconstitutional.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that a Final Order be entered which upholds the subject Jeopardy Findings and Assessment.

RECOMMENDED in Tallahassee, Leon County, Florida, this 28th day of January, 1991.

CLAUDE B. ARRINGTON

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 28th day of January, 1991.

COPIES FURNISHED:

James McAuley, Esquire Mark Aliff, Esquire

Assistant Attorneys General Department of Revenue

Tax Section, Capitol Building Tallahassee, Florida 32399-1050

Mel Black, Esquire 2937 S.W. 27th Avenue Miami, Florida 33133

J. Thomas Herndon Executive Director Department of Revenue

104 Carlton Building Tallahasseee, Florida 32399-0100

William D. Moore General Counsel

203 Carlton Building Tallahassee, Florida 32399-0100

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS:

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 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.

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA DEPARTMENT OF REVENUE

GARY WAYNE CHITTY,

Petitioner,

vs. DOAH Case No. 90-3670

DEPARTMENT OF REVENUE,

Respondent.

/

FINAL ORDER

This case came before the Department of Revenue for the purpose of considering a Recommended Order. The Hearing Officer assigned by the Division of Administrative Hearings in the above-styled case submitted a Recommended Order to the Department of Revenue. A copy of the recommended Order is attached hereto and incorporated by reference as if fully set forth.

The Department, through counsel, filed an exception to the Conclusion of Law contained in paragraph 11 of the Recommended Order. This exception consists of the conclusion of law and is therefore considered as legal argument. For the reasons expressed below the Department finds that the Assessment is correct and therefore upheld.

FINDINGS OF FACT

The Department adopts the Findings of Fact and the Statement of the Issue as set forth in the Recomended Order.

CONCLUSIONS OF LAW

The Department sets forth the following conclusions of law. To the extent the conclusions of law in the Hearing Officer's Recommended Order are not set forth in this Final Order, they are modified.

1. This matter came before the Division of Administrative Hearings which has jurisdiction over the parties to, and the subject matter of, the proceedings.

2. Section 212.0505, Fla. Stat., provides, in pertinent part as follows: (1)(a) Every person is exercising a taxable

   privilege who engages in this state in the

   unlawful sale, use, consumption, distribution, manufacture, derivation, production, transportation of . . . cannabis as defined in s.893.02 . .

   (5) Any assessment made pursuant to this section shall be deemed prima facia correct in any judicial or administrative proceeding in this state . .

   
   

3. Mr. Chitty advances two arguments in support of his challenge to the assessment. First, he contends that one of the activities to which he stipulated occurred "in this state", as that phrase is used in s.212.0505(1)(a), Fla. Stat. Second, he contends that the statutory scheme under which the assessment was made is unconstitutional.

   
   

4. Mr. Chitty contends that the term "in this state" as used in the statute should not be construed to include the airspace of the State of Florida. This contention is rejected. The term "in this state" is defined by s.212.02(8), Fla. Stat., as follows:

   
   

   (8) "in this state" or "in the state" means within the state boundaries of Florida as defined in s. l, Art. II of the Constitution of the State of Florida and includes all territory within these limits owned by or ceded to the United States.

   
   

5. Section 1 of Art. II of the Constitution of the State of Florida describes the physical boundaries of the State of Florida without specifying whether the airspace above the described lands are also included within the described area. Neither party has cited any judicial decision that is dispositive of the issue of whether an act committed in the airspace of a state is an act committed within that State. The cases cited by the Department are closely analogous to the facts presented by this case and support the Department's interpretation of these statutes. See, Grace v. McArthur, 180 F.Supp. 331 (E.D. Art. 1959); State v. Northwest Airlines, 7 NW.2d 691 (Minn. 1942); Alaska Airlines, Inc. v. Dept. of Revenue, 769 P.2d 193 (Or. 1989). In contrast, the case cited by Petitioner, Bragg v. State, 487 So.2d 424 (Fla. 5th DCA 1986), is not analogous to the facts presented by this case.

   
   

6. The State of Florida has repeatedly exercised its police power over acts committed while flying in the airspace over its boundaries. See, for example, ss.860.13 and 932.701-704, Fla. Stat.

7. It is concluded that the Department of Revenue has properly construed the term "in the state" to mean that one is in the State of Florida within the meaning of s.212.0505(1)(a), Fla. Stat., when one is in the airspace flying above the physical

   boundaries of the State as described by s.1, Art. II, Fla. Const.

   
   

8. An agency's interpretation of its rules and

   governing statutes is entitled to great weight and will not be overturned unless the interpretation is clearly erroneous. Health Quest

   Corporation, et al. v. Dept. HRS & Arbor Health Care Co., et al., 11 FALR 5427 (1989), ABC Liquors, Inc. v. Dept. of Business Regulation, 397 So2d 696 (Fla. 1st DCA 1981); Dept. of Insurance v. Southeast Volusia Hospital Dist., 438 So.2d 815 (Fla. 1983).

   
   

9. The facts to which the parties stipulated establish that Mr. Chitty transported marijuana into Florida by airplane and that he delivered the marijuana by jettisoning it over Lake Okeechobee as part of a conscious plan or design. The act of flying an airplane over the State of Florida for the purpose of jettisoning bales of marijuana over Lake Okeechobee constitutes the transporting of marijuana "within" the State of Florida within the meaning of s.212.0505(l)(a), Fla. Stat. Further, the intentional jettisoning of bales of marijuana over Lake Okeechobee as part of a conscious plan or design is an act of delivery of marijuana "within" the State of Florida within the meaning of s.212.0505(1)(a), Fla. Stat.

   
   

10. In addition to the transporting and delivery of marijuana within the State of Florida, Respondent contends that the stipulated facts establish that Mr. Chitty engage in the "use" of the marijuana within the meaning of s.212.0505(1)(a), Fla. Stat. The term "use" is defined by s.2l2.0505(1)(a), Fla. Stat., to mean:

    
    

    (21) "Use" means and includes the exercise of any right or power over tangible personal property incident to the ownership thereof, or interest therein, except that it does not include the sale at retail of that property in the regular course of business.

    
    

11. The stipulated facts do not address whether the marijuana was the property of Mr. Chitty or whether Mr. Chitty was acting at the instructions of the owner The stipulated facts do however establish and support a legal conclusion that Mr. Chitty, consistent with the definition of "use" under s.212.02(21), Fla. Stat., exercised an "interest therein," the marijuana. Consequently, the record establishes that Mr. Chitty engage in the "use" of the marijuana within the meaning of s.212.0505(1)(a), Fla. Stat.

    
    

12. It is well settled that only courts of competent jurisdiction have exclusive, original jurisdiction to determine the constitutionality of the statute. 10 Fla. Jur.2d, Constitutional Law, 5.47. Consequently, the under signed is without the jurisdictional authority to make any underlying statutory scheme is unconstitutional.

CONCLUSION

Therefore, based upon the above established facts and law, it is ORDERED: That the subject Jeopardy Findings and Assessment are hereby upheld.

Any Party to this Order has the right to seek judicial review of the Order as provided in Section 120.68, Florida Statutes, by the filing of a Notice of Appeal as provided in Rule 9.110, Florida Rules of Appellate Procedure, with the clerk of the Department in the Office of General Counsel, Post Office Box 6668, Tallahassee, Florida 32314-6668 and by filing a copy of the Notice of Appeal accompanied by the applicable filing fees with the appropriate District Court of Appeal. The Notice of Appeal must be filed within 30 days from the date this Order is filed with the Clerk of the Department.

DONE AND ENTERED in Tallahassee, Leon County, Florida this 2nd day of May, 1991.

STATE OF FLORIDA DEPARTMENT OF REVENUE

J. Thomas Herndon Executive Director

Filed with the Agency Clerk this 2 day of May, 1991.

Judy Langston, Agency Clerk

Copies: James McAuley, Esquire Mark Aliff, Esquire

Assistant Attorneys General Department of Legal Affairs Tax Section, The Capitol Tallahassee, FL 32399-1050

Robert E. Meale, Hearing Officer Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

Mel Black, Esquire 2937 S.W. 27th Avenue Suite 202

Miami, Florida 33133

Victoria L. Weber, Esquire General Counsel

Department of Revenue

Room 204, Carlton Building Tallahassee, FL 32301

Eric A. de Moya, Esquire Assistant General Counsel Department of Revenue

Room 204, Carlton Building Tallahassee, FL 32301

Docket for Case No: 90-003670

Orders for Case No: 90-003670