The Issue At issue herein is whether or not the Petitioner, Kelly Boat Service, Inc.'s and Cape Kennedy Charter Boats, et al's activities fall within the admissions tax liability imposed by Section 212.04, F.S. (1973). Based upon the pleadings filed herein, the documentary evidence introduced during the course of the hearing, the other evidence of record including the arguments of counsel, the following relevant facts are found.
Findings Of Fact In the instant matter, the Department of Revenue issued two sales tax assessments. The first such assessment is against Cape Kennedy Charter Boats and covers the audit period of March 1, 1973, through February 29, 1976. The Department also assessed Kelly Boat Service, Inc., in a series of three separate assessments covering the audit periods August 1, 1970, through January 31, 1976. Based on such assessments, a tax liability resulted in the amount of $25,072.37. Of this amount, $10,000 was paid by the tax payer on July 21, 1976 (Respondent's Composite Exhibit No. 1). The remaining tax liability plus interest which has accrued from July 21, 1976, is outstanding and continues to accrue. During the course of the hearing, the parties agreed that the specific liabilities as set forth in the assessment were not at issue. Rather, Petitioner solely challenged the legal authority of the Department of Revenue to impose the assessments in question. The Petitioners are owners and operators of a fleet of deep sea fishing boats in and around Destin, Florida, which, for a fee, carry individual fishermen to certain fishing banks which lie beyond the three-league limit in the Gulf of Mexico. While there, the Petitioners sell food and drinks to the fishermen and rent them fishing equipment. The fishing is done at the snapper banks in the Gulf of Mexico or in the vicinity of those banks. The fishing equipment and tackle used on these trips are mainly used beyond the three-league limit in the waters of the Gulf of Mexico; and most, if not all, of the food and drinks sold at the galley of the refreshment stand on the boat was outside the three-league limit of the State of Florida. In an earlier summary final judgment, the Circuit Court of Appeal declared, as authorized by Chapter 86, Florida Statutes, 1973, the liability of Kelly Boat Services, Inc., for payment of the admissions tax by Section 212.04, F.S., 1973, from which the Department of Revenue filed an appeal. In that decision, the Court held that Kelly, whose boats take on passengers at Destin for fishing in the Gulf of Mexico beyond the territorial limits of Florida, is taxable at the statutory rate on the admission fare charged at the dock, but that the State is foreclosed from assessing Kelly for taxes that should have been paid between August, 1970, and the first day of August, 1973, the period in which the Department demanded the production of Kelly's records for audit. Section 212.14(6), F.S., 1973. Kelly cross-appealed and urged that its activities were not subject to the tax, citing Straughn v. Kelly Boat Service, Inc., 210 So.2d 266 (Fla.App. 1st 1968). In its decision, the First District Court of Appeal in Dept. of Revenue v. Kelly B Boat Service, Inc., 324 So.2d 351 (Fla. 1976), indicated that the trial court was correct in its reading of its decision in Dept. of Revenue v. Pelican Ship Corp., 257 So.2d 56 (Fla.App 1st 1972), Cert. Denied, 262 So.2d 682 (Fla. 1972), Cert. Dismissed, 287 So.2d 93 (Fla. 1974), and in hold that Kelly's commercial activities, as evidenced by the record, render it liable to assessment for the admissions tax. The Court noted that the trial court was incorrect, however, in foreclosing the Department of Revenue from making the assessment for the full three-year period authorized by Subsection 212.14(6), F.S., 1973. The decision goes on to read that the State is not foreclosed by reason of the Court's 1968 decision in Straughn v. Kelly Boat Service, Inc., or otherwise to assert that on the facts evidenced by record, Kelly should satisfy its full tax liability incurred three years prior to August 1, 1973. North American Company v. Green, 120 So.2d 603 (Fla. 1960); Jackson Grain Company v. Lee, 139 Fla. 93, 190 So. 464 (1939). Based on the above decision of the First District Court of Appeal, the Department's assessment, which the parties admit is factually correct, is valid both as to the August 1, 1970, through July 31, 1973, and the August 1, 1973, through January 31, 1976, audit periods. Since this matter has previously been adjudicated, the same is res judicata as to the legal validity of the Department's assessment. Further, since the assessment relative to Cape Kennedy Charter Boats is based upon the same factual circumstances and legal authority as the one against Kelly Boat Service, Inc., which was upheld as aforementioned in the case of the Dept. of Revenue v. Kelly Boat Service, Inc., supra, there is no factual challenge to the validity of the Department's assessment and there being no assertion by the Petitioner that any rules of law other than those enunciated by the District Court of Appeal in Dept. of Revenue v. Kelly Boat Service, Inc., supra, are applicable, such assessment must likewise be upheld. I shall so recommend. 1/
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, hereby, RECOMMENDED: That the Department of Revenue's assessment in the instant matter against the Petitioners be UPHELD. Additionally, in view of the Petitioners' letter of April 11, 1979, Petitioners' motion to treat this matter as a class action is hereby DISMISSED. RECOMMENDED this 31st day of May, 1979, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact Petitioner is a Swiss national, who resides in Jamaica. His business in Jamaica involves water sports and vacation tours, primarily for European tourists. Petitioner attended a boat show in Fort Lauderdale, Florida, in order to locate a suitable boat for entertainment and tour purposes for use by his business in Jamaica. There, he saw The Lady, a vessel being brokered by Anchorline Yacht and Ship Brokerage, Inc., of St. Petersburg, Florida. On February 28, 1980, Petitioner purchased The Lady from Anchorline for $120,000. Prior to that date, a survey was conducted by Wilkinson Company, marine surveyors, and repairs indicated by that survey were completed at South Pasadena Marina, Inc. At the time that Petitioner purchased The Lady from Anchorline, he advised the broker that he was taking the vessel out of the country. Accordingly, the broker required Petitioner to sign an affidavit that Petitioner had read the provisions of Section 212.05, Florida Statutes, and no tax was collected on the sale and purchase of The Lady. As The Lady was journeying from St. Petersburg across the State of Florida to West Palm Beach in order to reach Jamaica, she started taking on water. She was taken to Lantana Boatyard, where another marine survey was conducted. That survey concluded that The Lady was not seaworthy and, therefore, could not be taken to Jamaica at that time. As one of the required repairs, her engines needed to be overhauled by Cummins in Miami. Accordingly, after the repairs to be made at the Lantana Boatyard were completed, The Lady was taken to the Keystone Point Marina in North Miami, Florida, so that the work on her Cummins engines could be undertaken. During this time, Petitioner attempted to register The Lady in Jamaica; however, the Jamaican Government refused to license or register the vessel since she was not in Jamaica but was still physically located within the State of Florida. As a result of discussion between Petitioner and a Mr. Mathews at Anchorline, on September 18, 1980, the Petitioner made application for a Florida boat Certificate of Title at a tag agency. He reported the purchase price as ten dollars and, accordingly, paid forty cents tax on the transaction. Cummins started the repair work necessary on The Lady's engines while she had been docked at the Keystone Point Marina. On occasion, Petitioner has stayed overnight on The Lady for security purposes. He has had a telephone attached to the vessel for his personal use while on board. On January 7, 1981, Respondent Department of Revenue issued a Warrant for Collection of Delinquent Sales and Use Tax against the Petitioner in the total amount of $9,967.37, representing the follows: Tax $4,799.60 Penalty 4,799.60 Interest 350.17 Filing Fee 18.00 $9,967.37 On January 19, 1981, Petitioner made payment to Respondent Department of Revenue in the amount of $5,167.77, which payment was made under protest and which payment represents the amount of tax, interest, and filing fees, but does not include the amount of penalty. Pursuant to its warrant, the Department of Revenue has chained The Lady to the dock at the Keystone Point Marina. Accordingly, the work being performed by Cummins on her engines has not been completed, and no sea trial can be conducted. As stipulated by the parties, since the Petitioner purchased The Lady, she has been under repair and has never left Florida waters.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is therefore, RECOMMENDED THAT: A final order be entered denying Petitioner's claim for a refund, finding the Petitioner liable for a sales tax equal to four percent of the purchase price, together with interest and filing fees, but finding the penalty assessed against Petitioner to be erroneous and therefore invalid. DONE AND ENTERED this 8th day of October 1981 in Tallahassee, Florida. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of October 1981. COPIES FURNISHED: Michael Lechtman, Esquire 801 N.E. 167th Street, Suite 301 North Miami Beach, Florida 33162 John Browdy, III, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32301 The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32301
The Issue Whether Petitioner owes sales and use tax (plus penalties and interest) to the Department of Revenue (Department), as alleged in the Department's December 22, 1999, Notice of Decision.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the numerous stipulations set forth in the parties' Joint Stipulation of Facts and Second Joint Stipulation of Facts: 23/ Mr. Wheeler is a very successful entrepreneur, who has numerous investments and businesses. His interest in Petitioner represents only a small fraction of his wealth, and, consequently, he pays little or no attention to its business operations. He has let Captain Ernest exercise day-to-day control over these operations. No one other than Captain Ernest has been delegated such authority. When the "Destiny" was purchased by Petitioner, Mr. Wheeler intended for it to be used, for a time, as a charter boat (on a bare boat basis) and then sold, hopefully for a profit. From the time that Petitioner purchased the "Destiny" until the end of the Audit Period, Petitioner was not "involved in any business other than chartering the 'Destiny.'" Captain Ernest was the one who "picked [the "Destiny"] out." He did so pursuant to Mr. Wheeler's instructions that he "make sure" to select a "good charter platform." Aside from giving Captain Ernest these instructions, Mr. Wheeler did not participate in the selection process. The "Destiny" had a "perfect" configuration for chartering. In fact, it was "originally designed as a charter boat." It had last been used for chartering approximately five years before it was purchased by Petitioner. Rob Maas (the "Mr. Maas" referred to in the parties' Stipulation of Fact 26) is the attorney who represented Petitioner at the time the "Destiny" was purchased. At the request of Mr. Wheeler, who was "interested in satisfying all conditions for the Florida use tax exemption," Mr. Maas advised Mr. Wheeler and Captain Ernest as to "what was necessary to maintain the exemption." He told them that "bare boat charter forms" needed to be used when the vessel was chartered and that "any time the boat ever moved . . . [it had to be for] a business reason." After being given such advice, Mr. Wheeler specifically instructed Captain Ernest to use the "Destiny" exclusively for bare boat chartering and no other purpose, instructions that Captain Ernest followed. Captain Ernest accepted delivery of the "Destiny" on behalf of Petitioner in the Bahamas, 1/ notwithstanding that the purchase agreement between Petitioner and the seller indicated that delivery of the vessel was to be made at Pier 66 in Fort Lauderdale, Florida. Petitioner did not pay any sales tax on its purchase of the boat. Mr. Wheeler was not present at the time delivery of the vessel was accepted. After accepting delivery, Captain Ernest brought the boat to Fort Lauderdale. He did so because Fort Lauderdale was "the easiest place to get repairs done," a "good place to pick up crew . . . and finding things that you need for boats," and "the place you want to be" to charter a boat; however, he "probably [would] not" have entered Florida waters if had known that doing so would subject Petitioner to use tax liability. Upon arriving in Fort Lauderdale, Captain Ernest took the "Destiny" directly to Bradford Marine Shipyard (Bradford Marine), a Fort Lauderdale repair facility, where it was "outfitted . . . specifically for charter." On those occasions that Mr. Wheeler was on the "Destiny" during the Audit Period, he was aboard in the capacity of a paying charterer pursuant to a bare boat charter agreement that he and Petitioner had entered into on July 21, 1995. This bare boat charter agreement provided that Petitioner (as the "Owner") would make the "Destiny" available to Mr. Wheeler (as the "Charterer") "for charter on a 'stand-by' basis" and further provided, in pertinent part, as follows: Vessel Availability. Charterer understands the Vessel is scheduled to undergo significant repairs and improvements during 1995 and will not be available when such work is scheduled. Charterer further understands and agrees its charter is on a non-exclusive basis and Owner intends to charter the Vessel through the use of a charter broker to other parties. In the event of a scheduling conflict between Charterer and another charterer, Charterer agrees Owner may "bump" Charterer from using the Vessel during the conflicting period. Charter Broker. Owner and Charterer acknowledge that this is a direct charter without a charter broker. Accordingly, the charter rate is a discounted rate. Term, Hire, & Payment. Subject to the Vessel's availability, Owner agrees to let, and Charterer to hire, the Vessel on such days and for such term as Owner and Charter[er] agree at the rate of $3,000.00 per day, plus state sales tax, if applicable. There will be an accounting at the end of each calendar year to determine Charterer's usage during the preceding year. Due to the Vessel's repair schedule in 1995, the first accounting shall occur at the end of 1996 for Charterer's usage from the date of this Agreement. Charterer shall pay Owner the charter hire determined by the accounting by January 31st of next year. In addition to the charter hire, Charterer shall be responsible for all remaining expenses during charter, including but not limited to food, beverage, fuel, dockage, and accommodations. . . . 5. Control. The Vessel is chartered on a demise basis. Owner hereby transfers to Charterer full authority regarding operation and management of the Vessel for the charter terms. Charterer is solely responsible for retaining a master and crew and it is agreed that said Captain and/or crew are agents and employees of Charterer and not Owner. . . . On July 21, 1995, Mr. Wheeler and Petitioner also entered into a separate agreement for the services of the "Destiny's" captain and crew. This agreement between Mr. Wheeler (as "Charterer") and Petitioner (as "Contractor") for use of the "Destiny's" captain and crew provided, in pertinent part, as follows: Term, Hire & Payment. Charterer hereby retains Contractor to provide crew services to the Vessel during the charter period at the rate of $500.00 per day. In addition, Charterer shall provide the master and crew with food and quarters aboard the Vessel while retained. There will be an accounting at the end of each calendar year to determine Charterer's usage during the preceding year. Due to the Vessel's repair schedule in 1995, the first accounting shall occur at the end of 1996 for Charterer's usage from the date of this Agreement. Charterer shall pay Owner the charter hire determined by the accounting by January 31st of the next year. Provisions. Charterer, before any charter use, shall advance an expense deposit for running expenses. The master shall use these funds to pay for food, liquor, laundry, fuel and lubricants, harbor fees, communication expenses, and any other required supplies or services. If the deposit is insufficient to cover all charges, Charterer shall advance further funds, as needed, during the charter. Upon conclusion of a charter, the master shall provide an accounting to the Charterer of sums received and disbursed. Crew Services. Contractor, on those days Charterer is to use the Vessel, shall provide a full-time, qualified captain and crew. Each crew member shall hold any required license and shall be properly uniformed. . . . Navigation. The master shall act at the Charterer's direction; provided, however, that the master shall not have to carry out any order that jeopardizes the safety of the Vessel or those on board. Relationship. Contractor is retained by Charterer only for the purposes and to the extent set forth in this Agreement, and Contractor's relationship to Charterer shall be that of an independent contractor. Neither the execution or performance of this Agreement shall render the parties partners or co-venturers for any purposes. . . . Mr. Wheeler chartered the "Destiny" pursuant to the July 21, 1995, bare boat charter agreement (and utilized the services of the "Destiny's captain and crew pursuant to the separate July 21, 1995, employment agreement) on the following dates during the Audit Period: September 12, 1995, through September 15, 1995; December 21, 1995, through January 4, 1996; March 4, 1996, through March 7, 1996; July 21, 1996, through July 28, 1996; and August 19, 1996, through August 25, 1996. 2/ These charters all occurred outside of Florida. Mr. Wheeler was billed (in accordance with his agreements with Petitioner) for his use of the "Destiny," for the services performed for him by the "Destiny's" captain and crew, and for all "running expenses" incurred during his charters, and he paid Petitioner the full amount he was billed. Mr. Wheeler was not the only one to charter the "Destiny" during the Audit Period. There were seven other charters: by Ryder Systems, Inc., of Miami, Florida, from 2:00 p.m. to 7:00 p.m. on January 22, 1996; by Barry Zekelman, from noon on April 6, 1996, to noon on April 13, 1996; by William Boardman, from noon on May 20, 1996, to noon on May 31, 1996; by David Cole, from noon on June 29, 1996, to noon on July 7, 1996; by the Robert E. Morris Company, from 4:00 p.m. on July 9, 1996, to 4:00 p.m. on July 12, 1996; by Thomas Russell, from 9:00 a.m. to 8:00 p.m. on July 30, 1996; and by Richard Dvorak, from 3:00 p.m. on August 4, 1996, to 3:00 p.m. on August 18, 1996. Each of these charters, like Mr. Wheeler's charters of the "Destiny," occurred pursuant to a bare boat charter agreement (on a form containing provisions standard in the bare boat chartering industry, including, among others, one obligating the charterer to pay all "running expenses" during the charter), with the captain and crew being provided in accordance with the terms of a separate employment agreement entered into by the charterer. (These separate employment agreements, unlike Mr. Wheeler's agreement for the services of the "Destiny's" captain and crew, were with Captain Ernest, not Petitioner.) The arrangements made for the payment of the "Destiny's" captain and crew for services performed by them while the "Destiny" was under charter during the Audit Period were "customary in the industry." Only one charter during the Audit Period, the Ryder Systems, Inc., of Miami, Florida, charter, took place in Florida. Florida is not considered a preferred destination in the bare boat chartering industry. A considerable amount of time was spent during the Audit Period marketing and promoting the "Destiny" to rebuild the reputation it had previously enjoyed as a charter boat. 3/ It was not until 1997 that Petitioner's bare boat chartering business "really took off as far as . . . charter numbers went." Although the "Destiny" was under charter only for a small portion of the Audit Period, at no time during the remainder of the Audit Period (when it was not under charter) was it used for any purpose unrelated to Petitioner's bare boat chartering business. The "Destiny" was used to house 4/ and feed Captain Ernest and the other members of the crew 5/ at all times during the Audit Period, whether the "Destiny" was under charter or not. Such use of the "Destiny" was in furtherance of Petitioner's bare boat chartering operations. Having a full-time captain and crew aboard a "mega" yacht available for bare boat charter, even when the yacht is not under charter, is essential to conduct successful chartering operations. The captain and crew must be available, on the vessel, to host the charter brokers and prospective charterers who come aboard between charters (sometimes with little or no advance notice) and to perform those everyday tasks necessary to maintain the vessel. To attract and keep qualified onboard personnel, it is necessary to provide them with, as part of their compensation package, free room and board on the "mega" yacht. Doing so is the standard practice in the bare boat chartering industry. When it was not under charter during the Audit Period, the "Destiny" was heavily promoted and marketed in an attempt to attract bare boat charter business. "[A] lot of promotion" and marketing was needed because the "Destiny" was reentering the charter market after a five year hiatus and Captain Ernest "was new to the charter industry." The promotional and marketing efforts included entering the "Destiny" in boat shows, hosting luncheons for charter brokers aboard the "Destiny," taking charter brokers and their guests on "fam" trips on the "Destiny," and showing the "Destiny" to prospective clients. Captain Ernest and the crew always tried to make the "Destiny" look its best when charter brokers and prospective charterers came aboard. Flowers were purchased and used to enhance the appearance of the "Destiny." When charter brokers came aboard the "Destiny," they were wined and dined and otherwise shown the type of service Captain Ernest and the crew were capable of delivering to charterers. (The reputation of the captain and crew for quality service determines "what charters [a "mega" yacht bare boat chartering business is] going to get and how [the] business is going to go.") It was particularly important "in the early days" for Captain Ernest and his crew to "make an impression on the brokers" because they were not known in the broker community. During the Audit Period, when not under charter, the "Destiny" was stocked with supplies and provisions purchased for use in connection with Petitioner's bare boat chartering operations. These supplies and provisions included fuel and various food and beverage items. Some of the food and beverage items were for use during promotional and marketing activities aboard the vessel. The chef (who specialized in European-style dishes) would often serve rack of lamb or roast duck (as a main course) to visiting charter brokers. There were also food and beverage items on the vessel for the members of the crew. In addition, items that could not readily be obtained in the Caribbean islands (at a reasonably competitive price) were purchased before the "Destiny" departed for the Caribbean. These items were stored on the vessel so that they would be available for any charter that Captain Ernest might be able to obtain while the vessel was located in Caribbean. (Charterers paid Petitioner for the items they and their guests consumed during the charter.) It was "common" for Petitioner to buy large quantities of meats and seafood and store these items for later use in the seven freezers on the "Destiny." For example, on one occasion, Petitioner bought 71.49 pounds of leg of lamb (from a company that would "cryovac" the meat so that it would keep for a very long time). There were many occasions during the Audit Period, when the "Destiny" was not under charter, that it was moved from one location to another. All such movements, however, were in furtherance of Petitioner's bare boat chartering operations. For example, it was moved from time to time to attend boat shows and to pick up charter brokers and prospective charterers who wanted to look at the vessel. On other occasions, it was taken to repair facilities and other places ("mainly . . . in Florida"), such as Pier 66, to have repair and maintenance work done. It was also taken out on "quite a few" sea trials. In addition, there were times it was moved to avoid the problems that can arise if a boat just "sit[s] at the dock." "It's very important for a boat to stay moving and stay running" in order for it to remain in good working order. Another reason it was moved was to be in "the prime areas for [charter] pick-ups." 6/ In summary, during the Audit Period, the "Destiny" was either chartered on a bare boat basis (with captain and crew furnished under a separate employment agreement) or used in a manner reasonably designed to further Petitioner's bare boat chartering business, and for no other purpose. Furthermore, every tax-free Florida purchase of tangible personal property made by Petitioner under its Florida sales tax exemption certificate from the time of its acquisition of the "Destiny" until the end of the Audit Period (including the purchase of Yamaha WaveRunners on August 14, 1995, for $12,770.00 7/) was made in furtherance of Petitioner's bare boat chartering business. 8/ By letter dated October 11, 1996, the Department informed Petitioner that it was going to audit Petitioner's "books and records" for the Audit Period. Petitioner was selected for audit because it had reported only a relatively small amount of taxable charter revenue on the Florida sales and use tax returns it filed during the Audit Period. The Department began its review of Petitioner's "books and records" on January 23, 1997, at Mr. Maas' office. The Department's "audit findings" were that the "Destiny" "was purchased for [a] dual purpose, for leasing and to be used by the shareholder" and therefore "the vessel and other purchases [made by Petitioner during the Audit Period under its sales tax exemption certificate] are taxable at the cost price." Based upon these audit findings, the Department issued a Notice of Intent to Make Audit Changes, in which it advised Petitioner that Petitioner owed $250,744.18 in sales and use taxes, $125,325.07 in penalties, and $56,948.55 in interest through July 18, 1997, for a total of $433,017.80, "plus additional interest of $82.44 per day . . . from 07/18/97 through the date [of] payment." By letter dated April 22, 1998, Petitioner protested the Department's proposed assessment. On December 22, 1999, the Department issued its Notice of Decision sustaining the proposed assessment and announcing that, as of December 22, 1999, Petitioner owed the Department $506,142.08, with "interest continu[ing] to accrue at $82.44 per day from 12/23/99." Petitioner subsequently filed a Petition for Chapter 120 Administrative Hearing on the Department's proposed action.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order finding that its assessment against Petitioner is incorrect in its entirety. DONE AND ENTERED this 24th day of September, 2002, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 2002.
The Issue The issue to determine in this matter is whether Respondent Department of Environmental Protection (DEP) properly issued its proposed verification of an Environmental Resource Permit (ERP) exemption, dated March 23, 2018, for the installation of nine pilings off of Respondent Larry Lynn’s residential property, in the direction of Petitioner MarineMax, Inc.’s commercial property (MarineMax), pursuant to section 373.406(6), Florida Statutes, commonly known as the “de minimus” exemption.
Findings Of Fact Mr. Lynn has owned the real property located at 111 Placid Drive, Fort Myers, Florida, since 1994. Mr. Lynn’s residential property is a corner lot that fronts a canal on two of the four sides of his property, and also contains his home. MarineMax is a national boat dealer with approximately 65 locations throughout the United States and the British Virgin Islands. MarineMax has approximately 16 locations in Florida. MarineMax, through subsidiary companies, acquired the property at 14030 McGregor Boulevard, Fort Myers, Florida, in December 2014 (MarineMax Property). Prior to MarineMax’s acquisition, this property had been an active marina for more than 30 years. MarineMax continues to operate this property as a marina. The MarineMax Property is a 26-acre contiguous parcel that runs north-south and that is surrounded by canals and a larger waterway that connects to the Gulf of Mexico. The “northern” parcel of the MarineMax Property is surrounded by two canals and the larger waterway that connects to the Gulf of Mexico. The “southern” parcel is a separate peninsula that, while contiguous to the northern parcel, is surrounded by a canal that it shares with the northern parcel, along with another canal that separates it from residential properties. Mr. Lynn’s property is located directly south of the northern parcel of the MarineMax Property, and the canal that runs east-west. As his property is a corner lot, it also fronts an eastern canal that is directly across from the southern parcel of the MarineMax Property. The eastern canal described above also serves as a border between MarineMax and a residential community that includes Mr. Lynn’s residential property. Mr. Lynn has moored a boat to an existing dock on the eastern canal described in paragraphs 5 and 6 for many years. MarineMax holds ERPs for the business it conducts at its MarineMax Property, including the canal between the northern parcel of the MarineMax Property and Mr. Lynn’s property. For example, these ERPs permit: (a) the docking of boats up to 85 feet in length with a 23-foot beam; (b) boat slips up to 70 feet in length; (c) up to 480 boats on the MarineMax Property; and (d) a boatlift and boat storage barn (located on the southern parcel). The MarineMax Property also contains a fueling facility that is available for internal and public use. It is located on the northern parcel of the MarineMax Property, directly across the east-west canal from Mr. Lynn’s property. The prior owner of the marina constructed this fueling facility prior to 2003. Request for Verification of Exemption from an ERP Mr. Lynn testified that after MarineMax took over the property from the prior owner, he noticed larger boats moving through the canal that separates his property from the MarineMax Property. Concerned about the potential impact to his property, including his personal boat, Mr. Lynn contracted with Hickox Brothers Marine, Inc. (Hickox), to erect pilings off of his property in this canal.2/ On March 8, 2018, Hickox, on behalf of Mr. Lynn, submitted electronically a Request for Verification of Exemption from an Environmental Resource Permit to DEP. The “Project Description” stated, “INSTALL NINE 10 INCH DIAMETER PILINGS AS PER ATTACHED DRAWING FOR SAFETY OF HOMEOWNER’S BOAT.” The attached drawing for this project depicted the installation of these nine pilings 16 and 1/2 feet from Mr. Lynn’s seawall, spaced 15 feet apart. On March 23, 2018, DEP approved Mr. Lynn’s Request for Verification of Exemption from an Environmental Resource Permit, stating that the activity, as proposed, was exempt under section 373.406(6) from the need to obtain a regulatory permit under part IV of chapter 373. The Request for Verification of Exemption from an Environmental Resource Permit further stated: This determination is made because the activity, in consideration of its type, size, nature, location, use and operation, is expected to have only minimal or insignificant or cumulative adverse impacts on the water resources. The Request for Verification of Exemption from an Environmental Resource Permit further stated that DEP did not require further authorization under chapter 253, Florida Statutes, to engage in proprietary review of the activity because it was not to take place on sovereign submerged lands. The Request for Verification of Exemption from an Environmental Resource Permit also stated that DEP approved an authorization pursuant to the State Programmatic General Permit V, which precluded the need for Mr. Lynn to seek a separate permit from the U.S. Army Corps of Engineers. Megan Mills, the environmental specialist and program administrator with DEP’s South District Office, testified that DEP’s granting of Mr. Lynn’s Request for Verification of Exemption from an Environmental Resource Permit was routine, and that his Request for Verification of Exemption from an Environmental Resource Permit met the statutory criteria. After DEP granted the Request for Verification of Exemption from an Environmental Resource Permit, Hickox, on behalf of Mr. Lynn, installed the nine pilings in the canal at various distances approximately 19 feet from Mr. Lynn’s seawall and in the canal that divides Mr. Lynn’s property from the MarineMax Property (and the fueling facility).3/ MarineMax timely challenged DEP’s Request for Verification of Exemption from an Environmental Resource Permit. Impact on Water Resources MarineMax presented the testimony of Sam Lowrey, its corporate vice president of real estate, who had detailed knowledge of the layout of the MarineMax Property. Mr. Lowrey testified that the canal between the MarineMax Property and Mr. Lynn’s residential property is active with boating activity, noting that MarineMax’s ERP allows up to 480 vessels on-site. With the installation of the pilings, he testified that he was concerned that MarineMax customers “will be uncomfortable navigating their boats through this portion of the canal[,]” which would be detrimental to MarineMax’s business. Mr. Lowery testified that he had no personal knowledge of whether MarineMax has lost any business since the installation of the pilings. MarineMax also presented the testimony of Captain Ralph S. Robinson III, who the undersigned accepted as an expert in marine navigation, without objection.4/ Captain Robinson has been a boat captain, licensed by the U.S. Coast Guard, since 1991. He has extensive experience captaining a variety of vessels throughout the United States and the Bahamas. He is an independent contractor and works for MarineMax and other marine businesses. Captain Robinson is also a retired law enforcement officer. Captain Robinson testified that he was familiar with the waterways surrounding the MarineMax Property, as he has captained boats in those waterways several times a month for the past 15 years. Captain Robinson testified that he has observed a number of boats with varying lengths and beams navigate these waterways, and particularly, the canal between the MarineMax Property and Mr. Lynn’s property. Captain Robinson estimated that the beam of these boats range from eight to 22 feet. He also testified that the most common boats have a beam between eight and 10 feet. Captain Robinson’s first experience with the pilings in the canal occurred in April 2018, when he was captaining a 42- foot boat through the canal. He testified that an 85-foot boat was fueling on the fuel dock, and when he cleared the fueling boat and pilings, he had approximately one and a half feet on each side of his boat. He testified that “[i]t was very concerning.” Captain Robinson testified that since this experience in April 2018, he calls ahead to MarineMax to determine the number and size of boats in the portion of this canal that contains the pilings. On behalf of MarineMax, in December 2018, Captain Robinson directed the recording of himself captaining a 59-foot Sea Ray boat with an approximately 15- to 16-foot beam through the canal separating the MarineMax Property and Mr. Lynn’s residential property, with another boat of the same size parked at MarineMax’s fueling dock.5/ Captain Robinson testified that these two boats were typical of the boats that he would operate at the MarineMax Property and surrounding waterway. The video demonstration, and Captain Robinson’s commentary, showed that when he passed through the canal between the fuel dock (with the boat docked) and Mr. Lynn’s residential property (with the pilings), there was approximately four to five feet on either side of his boat. Captain Robinson stated: This is not an ideal situation for a boat operator. Yes, it can be done. Should it be done? Um, I wasn’t happy or comfortable in this depiction. Captain Robinson testified that his “personal comfort zone” of distance between a boat he captains and obstacles in the water is five or six feet. Ultimately, Captain Robinson testified that he believed the pilings in the canal between the MarineMax Property and Mr. Lynn’s property were a “navigational hazard.” Specifically, Captain Robinson stated: Q: In your expert opinion, has Mr. Lynn’s pilings had more than a minimal, or insignificant impact on navigation in the canal, in which they are placed? A: I believe they’re a navigational hazard. The impact, to me personally, and I’m sure there’s other yacht captains that move their boat through there, or a yacht owner, not a licensed captain, um, that has to take a different approach in their operation and diligence, um, taking due care that they can safely go through. It’s been an impact. Q: Is a navigational hazard a higher standard for you as a boat captain, being more than minimal or insignificant? A: Yes. A navigational hazard is, in my opinion, something that its position could be a low bridge or something hanging off a bridge, a bridge being painted, it could be a marker, it could be a sandbar, anything that is going to cause harm to a boat by its position of normal operation that would cause injury to your boat, or harm an occupant or driver of that boat. Ms. Mills, the environmental specialist and program administrator with DEP’s South District Office, testified that after MarineMax filed the instant Petition, she and another DEP employee visited Mr. Lynn’s residential property. Although not qualified as an expert in marine navigation, Ms. Mills testified that, even after observing the placement of the pilings and the boating activity the day she visited, the pilings qualified for an exemption from the ERP.6/
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, the undersigned recommends that DEP enter a final order dismissing MarineMax’s challenge to the determination that Mr. Lynn’s pilings qualify for an exemption from an environmental resources permit pursuant to its March 23, 2018, approval of Mr. Lynn’s Request for Verification of Exemption from an Environmental Resources Permit. DONE AND ENTERED this 28th day of March, 2019, in Tallahassee, Leon County, Florida. S ROBERT J. TELFER III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th day of March, 2019.
The Issue Whether the Respondent committed the violation alleged in the Notice to Show Cause dated March 30, 1998, and, if so, the penalty which should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, is the state agency responsible for licensing and regulating yacht and ship brokers in Florida. Section 326.003, Florida Statutes (1997). Nivardo Beaton is a resident of Miami, Florida. He is not now, and never has been, licensed as a yacht broker or salesperson. The Division has no record of any prior enforcement or disciplinary actions against Mr. Beaton. At the times material to this action, Mr. Beaton worked at Avanti Powerboats, where he did assembly, electrical installation, and motor installation work on the boats built by Avanti Powerboats. Although he was originally a salaried employee of Avanti Powerboats, at the times material to this action, Mr. Beaton worked on a "piece work" basis and was paid a flat fee when he completed rigging a boat. Mr. Beaton also had a verbal agreement with Raul Rodriguez, the owner of Avanti Powerboats, whereby he was to be paid a five-percent commission for each direct sale of an Avanti boat and a one-and-one-half- percent commission for each Avanti boat sold by a dealership he had recruited as an Avanti distributor. An advertisement appeared in the October 17, 1997, edition of South Florida Boat Trader in which "Beaton Boat Sales and Service - Nivardo Beaton" offered three new boats and three used boats for sale. The three new boats were all Avantis; the three used boats were a twenty-one-foot Corona, a thirty-five- foot Contender, and a thirty-three-foot Avanti. Mr. Beaton owned the Corona; the Contender was owned by a friend, and Mr. Beaton did not expect any compensation from the sale of this boat; and the Avanti, an open-decked fishing boat, had been taken in trade by Mr. Rodriguez and was owned by Avanti Powerboats. Pursuant to a verbal agreement with Mr. Rodriguez, Mr. Beaton was to receive a five percent commission on the sale of this used thirty-three- foot Avanti. The advertisement was seen by an employee of the Division, and, when the Division's records revealed that neither Mr. Beaton nor Beaton Boat Sales and Service were licensed to offer yachts for sale, an investigation was initiated. Peter Renje, the Division's investigator, contacted Mr. Beaton on November 19, 1997, and informed him that he could not offer for sale used boats over thirty-two feet in length with the expectation of compensation unless he was licensed as a yacht broker. After Mr. Renje's first visit, Mr. Beaton immediately contacted the South Florida Boat Trader and discontinued the advertisement. He also provided Mr. Renje with the materials he requested to assist him in his investigation. Mr. Beaton abandoned the idea of doing business under the name of Beaton Boat Sales and Service. Mr. Beaton never sold a boat or transacted any other commercial transaction through this business. The only action Mr. Beaton took under the name of Beaton Boat Sales and Service was placing the advertisement in the October 17, 1997, issue of the South Florida Boat Trader. Mr. Beaton has worked in the management and production areas of the boat-building industry for over twelve years; he began working in sales in 1997. Before working for Avanti Powerboats, he worked for a short time selling Boston Whalers, Zodiac Inflatables, and Key West Boats. He also was employed as a full-time salesman by Fisherman's Paradise, Inc., a division of Warren Craft Distributing, Inc., from January to June 1997. Mr. Beaton was aware at the time he placed the advertisement in the South Florida Boat Trader that a person must have a broker's license in order to sell used yachts. He was not aware at the time he placed the advertisement that he needed to have a broker's license to offer for sale the thirty-three-foot Avanti open fishing boat. The evidence presented by the Division is sufficient to establish that Mr. Beaton, doing business as Beaton Boat Sales and Service, offered for sale a used boat over thirty-two feet in length and that he expected to earn a commission if he sold the boat. The evidence is also sufficient to establish that Mr. Beaton worked with Avanti Powerboats as an independent contractor, that he cooperated with the Division in its investigation, that he immediately cancelled the subject advertisement, and that he did not do any business as Beaton Boat Sales and Service. Mr. Beaton's testimony that he was not aware that a thirty-three-foot open-decked fishing boat fell within the statutory definition of a yacht is accepted as credible. Although Mr. Beaton had a few months' experience in boat sales, there is no evidence to establish that he engaged in the sale of used boats or that he sold boats in excess of thirty-two feet in length. The evidence presented by the Division is, therefore, not sufficient to permit the inference that Mr. Beaton knew or should have known that offering for sale a used boat over thirty- two feet in length without a broker's license violated Chapter 326. Likewise, the evidence presented by the Division is not sufficient to permit the inference that Mr. Beaton intended to violate Chapter 326. There was no evidence presented by the Division to establish that any member of the public suffered any injury as a result of Mr. Beaton's action in advertising for sale the used Avanti.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums and Mobile Homes, enter a final order finding Nivardo Beaton guilty of violating Section 326.004(1), Florida Statutes (1997); ordering Mr. Beaton to cease and desist from any other violations of Chapter 326, Florida Statutes, and the rules promulgated thereunder; and imposing a civil penalty in the amount of $250. DONE AND ENTERED this 13th day of October, 1998, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 13th day of October, 1998. COPIES FURNISHED: William Oglo, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-1007 Nivardo Beaton, pro se Beaton Boat Sales and Services 14812 Southwest 81 Street Miami, Florida 33193 Philip Nowicki, Ph.D., Director Division of Florida Land Sales, Condominiums and Mobile Homes 1940 North Monroe Street Tallahassee, Florida 32399-1030 Lynda L. Goodgame, General Counsel Department of Business and Professional Regulations 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue Whether the Lee County Sheriff’s Office (“LCSO” or “Respondent”) correctly determined that a vessel owned by Gary Janikula (“Petitioner”) was a “derelict vessel” or an “abandoned vessel” on the waters of the state of Florida, within the meaning of section 823.11, Florida Statutes (2020), and therefore, subject to the provisions of sections 376.15, 705.101, 705.103, and 823.11, Florida Statutes (2020).
Findings Of Fact Based on the competent substantial evidence adduced at the final hearing, and the record as a whole, the following Findings of Fact are made: Mr. Janikula is the registered owner of a 35-foot pontoon houseboat,6 registration number FL3396HP (“pontoon houseboat”), found in the public waters of Lee County, Florida. LCSO is empowered to remove, or cause to be removed, derelict vessels from Florida’s public waters. §§ 376.15(3)(a) and 823.11(3), Fla. Stat. A vessel is considered to be “derelict” if it is left, stored, or abandoned “[i]n a wrecked, junked, or substantially dismantled condition upon any public waters of Florida.” § 823.11(3), Fla. Stat. Adam Winton is a sworn law enforcement officer (“LEO”) working as a Deputy Sheriff for Respondent. Prior to joining Respondent, Deputy Winton was employed by the Florida Fish and Wildlife Conservation Commission (“Commission”). The Commission is the primary state agency responsible for derelict vessel enforcement identification and investigation. Deputy Winton received “ongoing training, as well as [law enforcement] academy training in derelict vessel investigations,” and he has been assigned to “disaster areas several times for the sole purpose of conducting derelict vessel identification.” Deputy Smith has been a LEO for 23 years. Deputy Smith has been with Respondent’s marine unit for nine years. In addition to his four-year 6 Generally, this type of pontoon boat operates with a motor on each hull. degree from Florida State University, he has completed 16 hours of derelict vessel investigation training. When a derelict vessel investigation is begun, the LEO starts by identifying the owner of the vessel and finding out the owner’s intentions for the vessel. The derelict vessel investigation then determines three things: the vessel is “wrecked;” “junked;” or “substantially dismantled.” A vessel is “wrecked when it does not have the ability to extract itself absent some mechanical assistance;” it might be sunk or grounded. A vessel is “junked” when it is substantially stripped of components, the vessel has been discarded, or it could also be sunk. A vessel is “substantially dismantled” if the vessel does not have the power to be steered, there are parts missing from the vessel, or the vessel’s integrity itself is compromised. 10 On August 16, 2020, Deputy Winton was working the marine patrol detail in the public waters of Lee County, Florida. While on that patrol, Deputy Winton observed Mr. Janikula’s pontoon houseboat in Matanzas Pass7 in Lee County, Florida. Deputy Winton observed the pontoon houseboat “listing [leaning] significantly” and the “right [starboard] hull had been compromised.” He observed the right hull did not “have an effective means of dewatering ... [and] it’s been in the state for quite some time.” Although the pontoon houseboat appeared to be floating, Deputy Winton testified the “starboard hull was in shallow water so it’s possible it was resting on the bottom.” The pontoon houseboat’s starboard hull was low in the water while the port (left) side was much higher out of the water, demonstrating the vessel’s listing. Deputy Winton also observed that the “interior cabin areas were breached and open to the elements.” Several “cabin windows and doors were 7 Matanzas Pass is within Estero Bay, Lee County, Florida. either open, broken, or missing,” allowing air, rain, or salt water into the pontoon houseboat. Further, Deputy Winton observed the pontoon houseboat did not “appear to have any sort of steering device.” He observed that although this pontoon houseboat was supposed to be equipped with two motors, the starboard motor was missing and the port motor had “damage to the cowling area [and] the bottom part was very corroded.” The port motor was “cracked in the back and everything [was] corroded on it.” Deputy Winton determined the port motor was an inoperable outboard engine. The “cables and different control mechanisms that run to where the [other] engine should be or where any sort of steering should be were broken, discarded, just hanging into the water.” As a result of all that he observed, Deputy Winton issued a Florida Uniform Boating Citation V2973718 to Mr. Janikula. In addition to including Mr. Janikula’s identification information, and the date, time, and location of the pontoon houseboat, the citation included the following description of the pontoon houseboat as “at-risk of becoming derelict.” Deputy Winton testified that this “at-risk” citation “is usually used as a sort of warning or sort of means to get somebody to fix a problem before it escalates to the point where they are issued a criminal charge for derelict vessel and a removal process is initiated.” In late November 2020, over three months after Deputy Winton issued the “at-risk” citation, Deputy Smith observed the pontoon houseboat partially submerged in Estero Bay in Lee County, Florida. Deputy Smith observed the pontoon houseboat’s pontoons under water, and the vessel was “hard aground” in three feet of water. 8 This citation contained Lee County Court Case Number 20-396456/W4 and was for an infraction which did not require a court appearance, but the payment of a fine within 30 days. This is an administrative proceeding. The undersigned was not advised of and has not relied on any action taken by the Lee County Court. Deputy Smith began an investigation of the pontoon houseboat, looking to determine if it met the criteria for a derelict vessel. Deputy Smith spoke with Mr. Janikula about the condition of his pontoon houseboat, and what his intentions were for it. In early December 2020, Deputy Smith observed the partially submerged pontoon houseboat, and again spoke with Mr. Janikula. On December 8, 2020, Deputy Smith again observed the partially submerged pontoon houseboat in Estero Bay. He saw the pontoon houseboat “was definitely in [a] wrecked condition ... sitting on the bottom. And it did not have the ability to remove itself.” The pontoon houseboat was sitting on a sandbar in two-to-three feet of water, and it was listing to the starboard side because the starboard pontoon was full of water. Deputy Smith also observed that the pontoon houseboat was missing the starboard motor and the port motor was inoperable. The cables, necessary to connect the two motors for steering, were “degraded, rotting, and laying in the water.” Deputy Smith observed the “throttle mechanism was rusted and degraded and, ... not in very good shape.” The pontoon houseboat could not move on its own. As a result of his observations, Deputy Smith located Mr. Janikula, and provided him a Florida Uniform Boating Citation, V542737. This citation included Mr. Janikula’s identification information, and the date, time, and the location of the pontoon houseboat. Additionally, the citation included the description that the pontoon houseboat was an “ABANDONED AND DERELICT VESSELS [sic].” Mr. Janikula acknowledged receipt of the derelict vessel citation and the information described in the first paragraph of the Preliminary Statement above. LCSO provided photographic evidence (Respondent’s Composite Exhibit G) of the condition of the pontoon houseboat between December 2020 and February 2021. A brief description of each photograph is provided: G-1: The front of the pontoon houseboat is listing to the starboard side, with barnacles exposed on the port hull, rub railing is broken, and port side is missing windows; G-2: The front of the pontoon houseboat is listing to the starboard side, with barnacles exposed on the front port bow; G-3: The pontoon houseboat registration number is visible, barnacles on the port side exposed pontoon above the water line are visible, rub railing is broken and coming apart, windows are broken out, and the LCSO’s Notice is visible; G-4: Starboard lower back side panel is shredded, hatch cover is missing, starboard motor is missing, throttle cables are unattached and hanging in the salt water; G-5: Starboard stern close-up of the damaged steering position, throttle cables are hanging down, starboard lower back side panel is shredded, stern back-door frame is rusted, and the back door open; G-6: Full stern view of the inoperable port side outboard motor, starboard motor is missing, starboard side steering cables laying in the salt water, and starboard lower back side panel is shredded; G-7: Navigational lights on starboard are visible, and bow appears to be a receptacle for a number of unrelated, discarded items, including a wheel and ice chest; G-8: Starboard lower back side panel is shredded, open hatches or windows are visible, port engine is out of the water, starboard motor is missing, steering cables are in the water, and pontoon houseboat is visibly listing to the starboard side; G-9: Full stern view of the inoperable port side outboard motor, starboard motor is missing, starboard side steering cables are laying in the salt water, stern back door frame is rusted and back door is open, and starboard lower back side panel is shredded; G-10: Port side pontoon is partially out of the water, rub rail is broken, windows are broken or missing, stern back door is open, port side outboard motor is out of the water, and starboard motor is missing; G-11: LCSO Notice posted on the pontoon houseboat on December 8, 2020; and G-12: Bow of the pontoon houseboat is listing to the starboard side, barnacles are exposed on the front port bow, and rub railing is broken. Mr. Janikula testified that the pontoon houseboat is “an ongoing project” of his, yet he failed to provide credible evidence of any repairs being made to it. He offered that someone was living on it and the person had a “hot shower last night.” Mr. Janikula testified that his pontoon houseboat was “currently in about 7 feet of water floating just fine. Right next to me. I can see it from here.” Mr. Janikula testified that the one outboard motor “got damaged,” his pontoon houseboat “doesn’t have any functioning engine” on it, and currently it is incapable of being moved on its own. Although he claimed the pontoon houseboat only had one motor when he purchased it, Mr. Janikula claimed the steering components were all present, and the vessel only needed one engine to steer. Lastly, Mr. Janikula testified that the pontoon houseboat was “technically ... a residential barge … it looks like a mobile home on pontoons.” LCSO’s photographs provide proof that this is not a barge as defined in section 327.02(3), Florida Statutes,9 but a pontoon houseboat, and it is in a wrecked condition. There can be no dispute that the pontoon houseboat was a “vessel” within the meaning of section 327.02(46). Based on the evidence (both testimony and photographic), the undersigned finds that at the time of the hearing, Mr. Janikula’s testimony regarding: substantial repairs having been made to the pontoon houseboat; 9 Section 327.02(3) provides: “Barge” means a vessel that does not have living quarters, is not propelled by its own power, and is designed to be pushed or pulled by another vessel. the description of the pontoon houseboat as floating in “7 feet of water”; the claim that the pontoon houseboat was sold with only one engine; and the claim that it is a residential barge, to be unpersuasive and self-serving. Further, the pontoon houseboat was a “derelict vessel” within the meaning of section 823.11(1)(b)1. It was left in a wrecked, junked, or substantially dismantled condition upon the public waters of this state. The testimony and photographic evidence conclusively demonstrate that the pontoon houseboat was a junked and/or substantially dismantled vessel when it was observed by the deputies.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Lee County Sheriff’s Office issue a final order deeming the pontoon houseboat to be a “derelict vessel” within the meaning of section 823.11, and the Lee County Sheriff’s Office is authorized under section 376.15(3)(a) to relocate or remove it. DONE AND ENTERED this 30th day of April, 2021, in Tallahassee, Leon County, Florida. S LYNNE A. QUIMBY-PENNOCK Administrative Law Judge 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2021. COPIES FURNISHED: Gary Scot Janikula 132 Tropical Shore Way Fort Myers Beach, Florida 33931 Antonette D. Hornsby, Esquire Lee County Sheriff's Office 14750 Six Mile Cypress Parkway Fort Myers, Florida 33913
Findings Of Fact Based on the stipulations and admissions of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at hearing, I make the following findings of fact. Facts admitted by all parties The water quality standards contained in Rule 17-3.111, Florida Administrative Code will not be violated by this project. There are no aquatic macrophytes located in the area of the proposed project. The proposed project is located within 500 feet of the incorporated municipality of Horseshoe Beach, Florida. The proposed project is located within Class II waters of the State not approved for shellfish harvesting. The project will not adversely affect the conservation of fish and wildlife, including endangered or threatened species, or their habitats. The proposed project will be of a permanent nature. The project will not adversely affect or will not enhance significant historical or acheological resources under the provisions of Section 267.061, Florida Statutes. The rest of the findings The Applicant, Dixie County, applied for a dredge and fill permit to construct a dock which would expand the existing public dock at Horseshoe Beach. In accordance with the revised plans dated October 23, 1986, the proposed facility would consist of a pier 6 feet wide and 120 feet long designed to accommodate six boat slips, each 30 feet wide and 40 feet long. The boundaries of the boat slips will be demarcated by pilings set 10 feet apart. Four of the boat slips would be primarily for the use of commercial fishing boats and commercial shrimping boats. The other two boat slips (the two slips closest to the land) would be reserved for the exclusive use of recreational and other small vessels. By adding a catwalk 3 or 4 feet wide down the middle of the two slips reserved for recreational vessels, the usefulness of those slips to recreational vessels would be greatly enhanced and the narrowness of the resulting slips would preclude their use by large vessels. Adding the two catwalks would be a minor addition to the proposed project which would greatly enhance the usefulness of the project and at the same time avoid the possibility that large vessels in the two slips closest to the land would impede ingress and egress at the nearby boat lift, boat fueling facility, and boat ramp. Adding a reasonable number of permanent trash or garbage containers would also enhance the usefulness of the proposed project and minimize the possibility of improper disposal of trash and garbage which is generated by the normal use of a dock by fishermen and boaters. The proposed project site is located in the Gulf of Mexico at Horseshoe Beach, Florida, and would extend into the waters of the Gulf, which is a tidally influenced water body adjacent to Dixie County, Florida. The water along the shoreline of the area is shallow for a considerable distance waterward, except where basins and channels have been dredged. The Horseshoe Beach area is relatively unpolluted. The existing public dock at Horseshoe Beach is used primarily by recreational vessels, but there is also extensive commercial fishing and Shrimping boat activity in the area. The project is located at the mouth of a canal with direct access to the Gulf. Several commercial fishhouses operate from the canal bank, which generates extensive commercial boat traffic past the proposed project site. Large numbers of commercial shrimp boats presently dock along the canal that ends near the proposed project site. The proposed project requires no dredging. The only filling required by the proposed project is the placement of pilings into the bottom of the Gulf of Mexico. Even though the plans do not specify whether concrete or wooden pilings will be used, this lack of specificity in the plans is irrelevant. Regardless of what types of pilings are used on this project, the filling activity will not violate the water quality criteria contained in Rule 17- 3.051(1), Florida Administrative Code. The placement of the pilings will not adversely affect the public health, safety, and welfare. Further, the proposed project will not adversely affect any property interests of the Petitioners within the scope of Chapter 403, Florida Statutes. The Gulf bottom in the area of the proposed project has already been disturbed. The presently existing suspension of particulate material in the water column, a natural occurrence in the area of the project, results in low visibility which means that seagrass beds and other marine vegetation, which provide shelter and detrital deposits for fish and other marine resources, will not grow. Coast Guard regulations prohibit commercial fishing vessels from depositing materials into the water within three miles of the coast line. Commercial fishing vessels must prominently display a sticker reciting that regulation and it is the practice of commercial fishing vessels operating in the vicinity of Horseshoe Beach to comply with this Coast Guard no discharge requirement by cleaning nets and scrubbing decks outside the three mile limit. It is not the practice of Commercial fishing vessels to deliberately discharge diesel fuel, fish parts or other material into the water while docked. Further, the limited number of commercial fishing vessels which could dock at the proposed facility at the same time cannot reasonably be expected to create discharges in amounts creating a nuisance, posing any danger to the public health safety or welfare, or violating the water quality criteria contained in Rule 17-3.051(1), Florida Statutes. Although small amounts of diesel fuel can become mixed with bilge water and be discharged by automatic bilge pumps while commercial fishing vessels are docked, there is no evidence that this would be in amounts Sufficient to create a nuisance or violate water quality criteria. To the contrary, notwithstanding a large amount of commercial boat traffic past the proposed site and notwithstanding the fact that large numbers of shrimp boats dock up the canal from the proposed site, the water in the area of the proposed site has remained relatively unpolluted. The proposed project will not affect the normal wind and wave action in the area of the proposed project. Such wind and wave action presently results in free exchange between the waters of the open Gulf and the waters near the shore. This free exchange of waters means that any pollutant discharges in the area of the proposed project will be diluted and rapidly dispersed into the Gulf of Mexico. There will be no measurable difference in the wind and wave action, or in the water exchange, after the proposed project is built. No harmful shoaling or erosion is expected to result from construction of the proposed project. Any docking structure extending out into the Gulf of Mexico will obviously have some effect on navigation in the area of the dock, but there is no evidence that the proposed dock will present a hazard to navigation or any significant interference with customary navigation patterns. The distance between the nearest channel marker and the waterward end of the proposed project is more than 200 feet. The angle of the proposed dock and its Spatial relation to the main Horseshoe Beach turning basin cause no impediment to navigation. The placement of Coast Guard Safety lights on the dock would minimize any potential for impeding navigation or posing a danger to the public health or safety during hours of darkness.
Recommendation Based on all of the foregoing, I recommend that the Department of Environmental Regulation issue a Final Order in this case granting the permit applied for by Dixie County. It is also recommended that the permit be made subject to the following additional conditions: That one or more Coast Guard safety lights be placed on the proposed expansion to the dock; That catwalks be added down the middle of the two most landward of the proposed boat slips; and That a reasonable number of trash or garbage receptacles be permanently located on the proposed expansion to the dock to minimize the possibility of trash and garbage being thrown overboard. DONE AND ENTERED this 30th day of October, 1987, at Tallahassee, Florida. MICHAEL M. PARRISH, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1448 The following are my specific rulings on all of the proposed findings of fact submitted by all of the parties. The paragraph numbers referred to below are references to the paragraph numbers in the parties' respective proposed recommended orders. Ruling on findings proposed by the Petitioners: Paragraph 1: Accepted. Paragraph 2: Accepted. Paragraph 3: Accepted. Paragraph 4: First sentence is rejected as appearing to be more in the nature of an introduction to a discussion of legal issues than a proposed finding of fact. Second and third sentences are rejected as repetitious Paragraph 5: Entire paragraph rejected as unnecessary speculative generalizations in light of the other evidence in this case. Paragraph 6: Entire paragraph rejected as unnecessary speculative generalizations in light of the other evidence in this case. Paragraph 7: Rejected as contrary to the greater weight of the evidence. Paragraph 8: Entire paragraph is rejected as appearing to be more in the nature of an introduction to a discussion of legal issues than proposed findings of fact. Paragraph 9: Entire paragraph rejected as contrary to the greater weight of the evidence; construction of the dock may be expected to bring about some changes in the nature of the boat traffic in the immediate area, but nothing of the nature or magnitude suggested by these proposed findings. Paragraph 10: Rejected as contrary to the greater weight of the evidence. Paragraph 11: First sentence is rejected as contrary to the greater weight of the evidence. Second sentence is accepted in part and rejected in part. Rejected portion is irrelevant. Third sentence is rejected as irrelevant. Fourth Sentence is accepted. Fifth sentence is rejected as contrary to the greater weight of the evidence and as repetitious Sixth sentence is rejected as contrary to the greater weight of the evidence. Paragraph 12: Entire paragraph rejected as contrary to the greater weight of the evidence. Rulings on findings Proposed by the Respondent: Paragraph 1: Accepted. Paragraph 2: Accepted in substance. Paragraph 3: First two sentences accepted in substance. Last sentence rejected as irrelevant. Paragraph 4: Accepted. Paragraph 5: Accepted. Paragraph 6: Accepted. Paragraph 7: Rejected as unnecessary recitation of opposing party's contentions and not proposed finding of fact. Paragraph 8: Accepted in substance. Paragraph 9: Accepted in substance. Paragraph 10: Accepted. Paragraph 11: Accepted in substance. Paragraph 12: Accepted. Paragraph 13: First sentence accepted in substance. Second sentence accepted in part and rejected in part; rejected portion concerns riparian rights, which are irrelevant to whether this permit should be issued. Paragraph 14: Entire paragraph rejected as irrelevant. Paragraph 15: Accepted in substance. Paragraph 16: Accepted. Paragraph 17: Accepted in substance. COPIES FURNISHED: Frederick M. Bryant, Esquire Moore, Williams & Bryant, P.A. Post Office Box 1169 Tallahassee, Florida 32302 J. Doyle Thomas, Esquire County Attorney Post Office Box 339 Cross City, Florida 32628 Ann Cowles-Fewox, Legal Intern Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400 Karen Brodeen, Esquire 2600 Blair Stone Road Tallahassee, Florida 32301 Dale Twachtmann, Secretary Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32399-2400
The Issue The issues to be determined in this proceeding are whether Respondent Prospect Marathon Coquina, LLC (PMC), is entitled to an environmental resource permit for the proposed expansion of a docking facility, and whether PMC is entitled to a modified sovereignty submerged land lease for the proposed project.
Findings Of Fact The Parties With the exception of Elizabeth Schuh, all Petitioners live in the Driftwood neighborhood, which is located across Big Bayou from the proposed project. All Petitioners use Big Bayou for various recreational purposes, including swimming and boating. Several Petitioners also use Big Bayou for nature observation. Petitioner Peter Pav owns waterfront property on Big Bayou. Respondents do not dispute Petitioners’ standing. The Department is charged with the responsibility to regulate construction activities in waters of the state. The Department has also been delegated authority from the Trustees of the Internal Improvement Trust Fund (Trustees) to process applications for submerged land leases for structures and activities that will preempt the use of sovereign submerged lands. PMC is a Florida limited liability corporation that owns 2,786 linear feet of upland shoreline contiguous to the state-owned submerged lands of Big Bayou. PMC is the developer of the multi-family residential condominium development on Coquina Key that the proposed project would serve, known as Coquina Key North. The Affected Waterbody Big Bayou is near the southern end of the St. Petersburg peninsula. The mouth of the bayou opens to Tampa Bay. Big Bayou is part of the Pinellas County Aquatic Preserve, which includes most of the coastal waters of Pinellas County. Like all aquatic preserves in Florida, the Pinellas County Aquatic Preserve is also designated as an Outstanding Florida Water.1 Florida Administrative Code Rule 18-20.001 states that the aquatic preserves in Part II of Chapter 258 (which include the Pinellas County Aquatic Preserve) “were established for the purpose of being preserved in an essentially natural or existing condition so that their aesthetic, biological and scientific values may endure for the enjoyment of future generations.” The term “essentially natural condition” is defined as “those functions which support the continued existence or encourage the restoration of the diverse population of indigenous life forms and habitats to the extent they existed prior to the significant development adjacent to and within the preserve.” Fla. Admin. Code R. 18-20.003(24). In the 1960s and 1970s, development activities throughout Tampa Bay caused the loss of about 80 percent of its seagrasses and significant degradation of water quality. The seagrasses and water quality in Big Bayou were also adversely affected by filling and other development activities, including the filling and bulkheading of Coquina Key where the proposed project would be located. In more recent years, the water quality in Big Bayou has improved. Although trash sometimes washes up on the shoreline and one can sometimes see a sheen on the water surface caused by gasoline or oil, the water quality in Big Bayou is generally good, with high dissolved oxygen and low nutrient concentrations. The seagrasses have also recovered to a large extent. A variety of seagrasses grow in Big Bayou, including shoal grass, manatee grass, turtle grass, widgeon grass, and a relatively uncommon species, palm grass. Seagrasses are the foundation for the marine food web. They also serve as a nursery for small fish and invertebrates, stabilize sediment, and improve water quality. Manatees regularly enter and use Big Bayou because it provides good habitat. The manatees in this area are part of the Southwest Florida manatee subpopulation. Based on data collected through 2001, that subpopulation is either stable, or possibly declining. Pinellas County is not one of the 13 Florida counties that were required to develop and implement manatee protection plans. There are two areas of Pinellas County that the Florida Fish and Wildlife Conservation Commission (FWCC) has identified as needing additional manatee protection measures, but Big Bayou is not one of them. The Proposed Project The proposed authorizations would allow PMC to expand an existing multi-family, residential docking facility on the north end of Coquina Key, along an existing seawall and adjacent to the Coquina Key North condominiums that PMC converted from a former apartment complex. The proposed project would add 60 boats slips to the existing 30 boat slips at the project site. The new slips could accommodate boats up to 25 feet in length. PMC would restrict use of the boat slips to Coquina Key North condominium owners. In converting the former apartment complex to condominiums, PMC retained ownership of a strip of land immediately upland of the submerged lands on which the proposed project would be constructed. The ground for Petitioners’ Motion for Summary Order is that the ownership retained by PMS, because it does not include ownership of the upland residences, does not entitle PMS to obtain a submerged land lease for the proposed project. That legal argument is addressed in the Conclusions of Law. Direct Impacts An earlier plan for the proposed project was to place 30 new boat slips on the north side of the existing docks and 30 new slips on the south side. However, to avoid direct impacts to seagrasses, the plan was modified to avoid an area of seagrasses on the south side. The proposed project now would add 38 boat slips on the north side and 22 slips on the south side. The over-water dock structures would be placed waterward of the seagrasses that currently grow along the seawall. The seagrasses adjacent to the proposed project are not likely to be harmed by wave action or turbulence from boating activity around and in the slips because of the distance between the slips and the seagrasses. The proposed authorizations include specific conditions that prohibit numerous activities that could cause adverse water quality impacts at the proposed project site, such as the discharge of trash, human or animal waste, or fuel; fish cleaning stations; boat repair facilities; fueling facilities; hull cleaning, painting or other external boat maintenance; and boat maintenance or repair activities requiring removal of a boat from the water, or removal of major portions of the boat for purposes of routine repair or maintenance on site, except where removal is necessitated by emergency conditions. No liveaboards would be allowed at the proposed project. PMC intends to incorporate these conditions into its agreements with the condominium owners who use the boat slips. Because Big Bayou is an Outstanding Florida Water, PMC is required to provide reasonable assurances that the project will not result in the lowering of existing ambient water quality. Florida Administrative Code Rule 62-4.242(2)(c) defines “existing ambient water quality” as the better water quality of either what existed on the date that the water body was designated an Outstanding Florida Water or what existed in the year prior to the permit application. Because the current water quality is better than it was in 1972 when the Pinellas County Aquatic Preserve was created, the current water quality is the standard to apply in this case. Although some incidental non-compliance with the conditions of the proposed authorizations could occur, such incidental non-compliance would not likely result in significant2 degradation of the existing ambient water quality in Big Bayou. Secondary Impacts – In General Petitioners’ primary concerns with the proposed project are with the secondary impacts that would be caused by increased boating activity in Big Bayou. Petitioners contend that the additional boats using the 60 new boat slips would adversely affect water quality, seagrasses, manatees, and other natural resources. Petitioners also assert that the additional boating activity would cause erosion of the north shoreline of Big Bayou and impair Petitioners’ recreational uses of the bayou. It is reasonable to assume that there would be more boat trips on Big Bayou if the proposed project were built than if it were not built. However, it is impossible to say how many more boat trips would be generated by the proposed project. It cannot be assumed that because there would be 60 more boat slips, there would be 60 more boats on Big Bayou each day, each week, or even each month. Moreover, the number of boats on Big Bayou on any given day fluctuates because it depends not only on the whims of the boat owners who have boat slips in Big Bayou, but also on the whims of the boat owners who anchor their boats in the open waters of Big Bayou, launch their boats from the public boat ramps on Big Bayou, or enter Big Bayou from Tampa Bay or more distant waters. Secondary Impacts - Erosion Petitioners did not present competent evidence to support their claim that the proposed project would cause erosion of the north shoreline of Big Bayou. Secondary Impacts – Water Quality The Department has adopted by reference the Southwest Florida Water Management District’s Basis for Review for Environmental Resource Permits (Basis of Review) to apply to applications for environmental resource permits for projects over which the Department retains permitting authority. For docking facilities, Section 3.2.4.3 of the Basis of Review requires the applicant to provide hydrographic information to demonstrate that the “flushing time” (the time required to reduce the concentration of a pollutant) is sufficiently short to prevent the accumulation of any pollutants to the point of violating water quality standards. PMC’s hydrographic analyses indicate that Big Bayou is well-flushed. The water of the bayou moves a half mile to a mile during a normal tide. The fact that the current water quality in Big Bayou is good indicates that contamination associated with the current level of boating activity in the bayou is not accumulating. Incidental discharges of contaminants from boats using the proposed project would likely be rapidly dispersed and diluted. Petitioners argued that PMC’s hydrographic analyses did not address every part of Big Bayou. The rule requires hydrographic characterization of “the project site and surrounding waters.” As the challengers, Petitioners needed to rebut PMC’s prima facie case regarding the hydrographic characteristics in the bayou with competent evidence showing PMC’s findings were inaccurate, or show that the scope of PMC’s hydrographic analyses did not conform with any reasonable interpretation of the applicable rule. Petitioners presented no such evidence or showing. Some additional, incidental contamination can be expected to occur as a result of the operation of the boats that would use the proposed project. However, PMC provided reasonable assurance that the addition of these contaminants would not significantly degrade the existing ambient water quality of Big Bayou nor cause any other applicable water quality standard to be violated. Secondary Impacts - Seagrasses The maximum water depth at which most seagrasses can grow is between five and six feet because of their need for light. When boaters attempt to cross shallow areas where seagrasses are located, they sometimes damage the grasses with the boat propellers, leaving areas of torn grass and “prop scars,” furrows in the bottom. Even when boat propellers do not touch the bottom, but come close, they can disturb the loose sediments and cause turbidity. It can be especially harmful when boats run aground, because the boater will sometimes grind away at the seagrasses in an attempt to move the boat to deeper water, causing holes 10 or 12 feet in diameter. Different seagrasses recover from such damage at different rates. In some cases, it can take years for a prop scar to become re-vegetated. A 1995 study of prop scars by the Florida Marine Research Institute found that the Tampa Bay area is one of four areas of Florida with the greatest acreage of moderate and severe scarring. There are prop scars visible in the bottom of Big Bayou and Petitioners testified about seeing boats run aground in Big Bayou. The main navigation channel on the north side of Big Bayou ranges in depth from slightly less than 8 feet to over 17 feet. There are channel markers to help boaters find and stay in this channel, but some of the original markers are missing. In addition to the main navigation channel, there is an area along the north side of Coquina Key that is used by the residents living along that shoreline to get to and from Tampa Bay. This second route, which is not marked, is much shallower than the main channel and its use by boaters at low tide is a threat to seagrasses in the area.3 If more boaters in Big Bayou stayed in the main navigational channel, there would be a decreased threat to the seagrasses. However, the evidence shows that boaters often travel out of the main channel, either by inadvertence or to take a shortcut, and cross shallow areas where the seagrasses are located. It was the opinion of David Crewz, a plant ecologist who specializes in seagrasses, that increased boating activity in Big Bayou could decrease the habitat quality of the bayou. He said that one can expect more prop scarring and more turbidity caused by stirring up the bottom sediments. He was most concerned about boats larger than 16 feet in length that do not stay in the marked navigation channel. The 1995 Florida Marine Research Institute study of prop scarring, which Mr. Crewz co-authored, recommended a four- point approach to reduce prop scarring: (1) boater education, (2) channel marking, (3) enforcement, and (4) speed zones. The conditions contained in the proposed authorizations would implement two of the four points recommended by the study. PMC would install informational signs about seagrasses at the proposed project and at Grandview Park so that boaters using the proposed project and boaters using the boat ramp at the park would be less likely to operate their boats in a manner harmful to seagrasses. PMC would replace all missing markers along the main navigation channel. The current distance between some of the channel markers may be causing some boaters to stray from the channel. PMC would mark the location of seagrasses adjacent to the navigation channel. The operation phase of the environmental resource permit would not become effective until the channel markers and seagrass markers have been installed. The proposed educational displays, channel markers, and seagrass markers would probably reduce boat traffic across seagrass areas, but they would not eliminate it. However, because the displays and markers would be viewed by boaters using Big Bayou other than just the 60 boaters who would use the slips at the proposed project, the “net” effect of the proposed project would likely be no significant increase in prop scars or related adverse impacts to seagrasses in Big Bayou due to the proposed project. Therefore, PMC provided reasonable assurance that the proposed project would not result in significant adverse impacts to seagrasses. To go further, however, and contend as PMC does that, even with the addition of 60 boats, the effect of the proposed project would be to significantly reduce the current incidents of prop scarring, boat grounding, and other adverse impacts to seagrasses, is mere speculation without a statistical analysis of boater behavior or other evidence that was not presented in this case. PMC would also limit the use of its boat slips to vessels with a draft that would provide at least a twelve-inch clearance between the vessel’s draft in a motor-down position and the top of submerged resource at mean low tide. This condition appears to been intended to track similar wording used in Florida Administrative Code Rule 18-20.004(5)(b)8., but because the condition leaves unstated the depth of the submerged resources and the water level of Big Bayou at mean low tide, a prospective renter of a boat slip would not know whether his or her boat would comply with the condition. The rule cannot be more specific because it applies to all waterbodies, but the specific condition in the proposed authorizations can and should be more specific to provide for adequate notice and enforcement. PMC provided reasonable assurance that the proposed project would not cause significant adverse impacts to seagrasses. Secondary Impacts – Manatees In Florida, between 25 and 30 percent of the annual manatee deaths are caused by collisions with boats. From 2002 to 2006, in Pinellas County waters, 41 percent of the manatee deaths of a known cause were watercraft-related. That percentage exceeds the state average and corresponds to an average of 3.2 deaths per year caused by boats. However the study area from which these statistics were compiled does not include Big Bayou. Dr. John Reynolds, a marine mammal expert, believes that boat speed is the primary factor in manatee deaths from boat collisions. At higher speeds, boaters and manatees have less time to avoid a collision and the severity of the injury to a manatee is generally greater when the manatee is struck by a boat moving at higher speeds. There are no boat speed zones currently established in Big Bayou. Thirty-three years of data collected by the Florida Fish and Wildlife Conservation Commission (FWCC) indicate that there are no known boat-related manatee deaths within two and a half miles of the project site. There have been two dead manatees discovered in Big Bayou, but their deaths were not attributed to boat collisions. Increasing the number of boats in an area used by manatees increases the potential for boat/manatee collisions. To minimize the potential for boat/manatee collisions, PMC would implement the standard manatee protection measures that apply during the construction of the proposed docks. PMC would also implement and maintain a manatee education program approved by the FWCC, including informational signs regarding manatees at the proposed project. Although reducing speeds by establishing, posting, and enforcing idle speed or slow speed zones in the bayou would probably be the most effective measure for the protection of manatees, PMC cannot be required by the proposed authorizations to control boat speeds because boat speed zones must be established by Pinellas County and the Florida Marine Patrol. The proposed authorizations incorporate the conditions recommended by the FWCC for the protection of manatees. Tom Logan, the former FWCC endangered species coordinator and now a consultant who focuses on endangered species and their habitat, believes that the special conditions included in the proposed authorizations provide adequate protection for manatees. The U.S. Fish and Wildlife Service also concluded that the proposed project is not likely to adversely affect manatees. PMC provided reasonable assurance that the proposed project would not cause significant adverse impacts to manatees. Secondary Impacts – Recreation Petitioners claim that their recreational uses of Big Bayou for fishing, swimming, canoeing, kayaking, and windsurfing would be diminished by the proposed project. However, Big Bayou is large enough to accommodate the additional boat trips associated with the proposed project and Petitioners’ recreational uses. A public water body like Big Bayou must be shared by persons living along or near its shores with all other citizens of Florida. Although some Petitioners would prefer that the bayou had the feel of a more remote or wild place, the Pinellas County Aquatic Preserve is recognized to have a “highly developed, urban nature.” Fla. Admin. Code R. 18-20.019. It already has the attributes of an urban preserve. PMC provided reasonable assurance that the proposed project would not prevent or significantly impair the existing recreational uses of Big Bayou. Cumulative Impacts Florida Administrative Code Rule 18-20.006 and Section 3.2.8 of the Basis of Review require that cumulative impacts be evaluated in determining whether to issue, respectively, a submerged lands lease or an environmental resource permit. PMC and the Department state in their Proposed Recommended Orders that the consideration of cumulative impacts is limited to projects that are existing or under construction, but Florida Administrative Code Rule 18.006(1) also requires, for a sovereignty submerged lands lease, consideration of “the number and extent of similar human actions within the preserve which have previously affected or are likely to affect the preserve.” Because the principal source of potential adverse impacts associated with the proposed project is boating activity, the existing docking facility at Coquina Key North, the other docks in Big Bayou, and the boat ramp at Grandview Park are existing structures generating boating activity that must be taken into account in the cumulative impacts analysis. Although the proposed project, with the conditions on its construction and operation, would, alone, have no significant adverse impact on water quality, seagrasses, manatees, or recreational uses in Big Bayou, the cumulative impacts to Big Bayou from all similar activities in the preserve have created significant (material) adverse impacts to Big Bayou in the form of trash, water contamination, damage to seagrasses, and prop scars. Public Interest Criteria Section 258.42(1)(a), Florida Statutes, requires that a lease of sovereignty submerged lands within an aquatic preserve by the Trustees must be “in the public interest.” Florida Administrative Code Rule 18-21.003(46) defines “public interest” in this context as “demonstrable environmental, social, and economic benefits which would accrue to the public at large as a result of a proposed action, and which would clearly exceed all demonstrable environmental, social, and economic costs of the proposed action.” Florida Administrative Code 18-20.004(2) sets forth the public interest criteria to be considered and balanced by the Trustees in determining whether to issue a submerged land lease or other authorization to use sovereignty submerged lands. The Rule identifies public boat ramps and “marking navigation channels to avoid disruption of shallow water habitats” as examples of public benefits. These benefits, however, must “clearly exceed” the “costs,” such as degraded water quality, degraded natural habitat and function, harm to endangered or threatened species and habitat, and adverse cumulative impacts. For issuance of the environmental resource permit, a determination is required that the proposed project is “clearly in the public interest,” because Big Bayou is part of an Outstanding Florida Water. Fla. Admin Code R. 62-4.242(2). This determination requires the consideration and balancing of a number of criteria set forth in Section 3.2.3 of the Basis of Review: Whether the activity will adversely affect the public health, safety, or welfare or the property of others; Whether the activity will adversely affect the conservation of fish and wildlife, including endangered or threatened species, or their habitats; Whether the activity will adversely affect navigation or the flow of water or cause harmful erosion or shoaling; Whether the activity will adversely affect the fishing or recreational values or marine productivity in the vicinity of the activity; Whether the activity will be of a temporary or permanent nature; Whether the activity will adversely affect or will enhance significant historical and archaeological resources under the provisions of s. 267.061; and The current condition and relative value of functions being performed by areas affected by the proposed activity.4 As explained in the Conclusions of Law, the “clearly in the public interest” test does not require the applicant to demonstrate that the intended activity would have a net public benefit. The counter-intuitive result is that, to meet the “in the public interest” test for the sovereignty submerged land lease, PMC must demonstrate a net public benefit, but to meet the “clearly in the public interest test” for the environmental resource permit, PMC does not have to show a net public benefit. The measures that PMC has agreed to undertake to meet the public interest criteria for the proposed authorizations are as follows: Contribute $300,000 to the construction of a second boat ramp at the current Sutherland Bayou Boat Ramp project in Palm Harbor; Install and maintain navigational aides marking the main channel in the bayou; Install markers indicating the location of seagrass beds; Install and maintain an informational display at the public boat ramp in Grandview Park, relating to the protection of seagrasses and natural resources within the bayou; and Install and maintain an aerial map at the Grandview Park boat ramp depicting the location of the navigation channel and the seagrass beds in the bayou. The $300,000 contribution for the boat ramp was based on a similar contribution ($5,000 per slip) that was made previously by the developer of another docking facility in Pinellas County. The Department had originally suggested that PMC contribute to a spoil island restoration project to satisfy the public interest criterion. However, due to the Trustees’ and/or Department’s concern about the reduction in the number of boat slips available to the general public,5 the Department proposed that PMC contribute $300,000 to Pinellas County’s Sutherland Bayou Boat Ramp project in Palm Harbor. The definition of “mitigation” in Florida Administrative Code Rule 18-20.003(35) states that, “Cash payments shall not be considered mitigation unless payments are specified for use in a previously identified, Department endorsed, environmental or restoration project.” No evidence was presented to show that the Sutherland Bayou Boat Ramp project is an “environmental or restoration project,” and it does not appear to qualify as such. Implicit in the boat ramp contribution proposal is the view that the public interest in providing more recreational boaters with access to Pinellas County waters outweighs the negative impacts to marine resources that are associated with increased boating activity. No evidence was presented, however, to explain or support this view. The strange result here is that PMC would be mitigating for the adverse impacts associated with increasing the boating activity in Big Bayou by helping to increased boating activity in other county waters where seagrass losses have been greater, prop scarring is a bigger problem, and more manatees are being killed by boat collisions.6 Dr. Reynolds stated that the Sutherland Bayou Boat Ramp project in Palm Harbor could be a benefit to Big Bayou if the boat ramp project took boat traffic away from the bayou, but he did not know whether it would. A reasonable inference can be made that, being so far away, the Sutherland Bayou Boat Ramp project is unlikely to add to or subtract from boat traffic in Big Bayou. As found above, the adverse environmental impacts of the proposed project, taking into account the proposed conditions, would be insignificant. However, because the record evidence shows that the Sutherland Bayou Boat Ramp project would put boats into county waters (and aquatic preserve waters) where there has been greater seagrass losses, more prop scarring, and more manatees killed by boat collisions than in Big Bayou, PMC’s $300,000 contribution to the boat ramp project actually increases the secondary impacts and cumulative impacts of PMC’s proposed project and causes it to fail to meet the public interest criteria. Without the $300,000 contribution to the Sutherland Boat Ramp project, PMC would meet the “clearly in the public interest” test for the environmental resource permit because the other mitigation offered by PMC would offset the secondary and cumulative impacts of the proposed project. However, a different result would occur in the case of the sovereignty submerged land lease. Eliminating the $300,000 contribution to the Sutherland Boat Ramp project would result in a situation where the public benefits of the proposed project do not “clearly exceed” the costs of the project and, therefore, PMC would not meet the “in the public interest” test. Although the record in this case is insufficient to demonstrate that PMC’s contribution to the boat ramp project would cause the benefits of the project to clearly exceed its costs, the record evidence is sufficient to support issuance of the lease modification if PMC were able to get the appropriate government authorities to establish a boat speed zone in Big Bayou, or if PMC contributed to the enforcement of boat speed zones in the aquatic preserve. As restated in the Conclusions of Law, whether the proposed mitigation is sufficient to offset the adverse impacts of the proposed project is a determination that rests exclusively with the Trustees and the Department, based on the record evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Environmental Protection enter a final order denying Environmental Resource Permit No. 52-0258984-001 and the modification of Sovereignty Submerged Land Lease No. 520224543. In the event the Trustees determine to issue the submerged land lease, it is recommended that the lease be modified to add a condition that the boat slips shall only be subleased or sold to residents of Coquina Key North condominiums. DONE AND ENTERED this 21st day of March, 2008, in Tallahassee, Leon County, Florida. BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of March, 2008.
The Issue Whether Petitioner owes sales and use tax (plus penalties and interest) to the Department of Revenue (Department), as alleged in the Department's November 1, 1999, Notice of Decision.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement and clarify the Stipulations of Fact set forth in the parties' Joint Pre-Hearing Stipulation: 1/ Mr. Wiviott is a very successful, "hands-on" entrepreneur who presently owns approximately five or six businesses. Since 1958, when he and his brother opened a carpet store in Milwaukee, Mr. Wiviott has owned approximately 30 different businesses (including nine restaurants and a yacht service business), many of which he has sold "for literally millions of dollars of profit." Approximately two-thirds of the businesses that he has owned he has "started from scratch." There have been instances where Mr. Wiviott has invested in businesses that were in industries in which, at the time of his investment, he had no prior experience. In these instances, he overcame his lack of experience by being "extremely industrious" and doing "research." When Mr. Wiviott has needed to consider a "feminine viewpoint" in making a business decision, he has used Mrs. Wiviott, his wife of 43 years, as a "sounding board." For the past 35 years, William Becker has been Mr. Wiviott's accountant. In 1991 or 1992, Mr. Wiviott purchased two "brand new" boats as business investments. The boats were sold to Mr. Wiviott together as a package. Mr. Wiviott paid a total of $1.1 million for the two boats. The larger of the boats was a 63-foot sport fisherman. Although unfinished, it was seaworthy. Mr. Wiviott named this boat the "Choice One." Mr. Wiviott named the other boat, a 56-foot sport fisherman, the "Choice Too." Mr. Wiviott accepted delivery of the Choice One and Choice Too in the Bahamas. He did not pay any sales tax on his purchase of the boats. After accepting delivery, Mr. Wiviott brought the boats to Fort Lauderdale. In 1993, Mr. Wiviott explored the possibility of entering (for the first time) the yacht charter business. He spoke to various people involved in the industry, including two charter brokers (Bob Offer and Bob Saxon) and a charter yacht owner (Bernie Little). He also had discussions with Mr. Becker. Together, he and Mr. Becker made cost and revenue projections. He ultimately made a "value judgment" to go into the business. Mr. Wiviott retained the services of Mr. Offer to help him find a suitable yacht for the business. One of the yachts that Mr. Offer showed Mr. Wiviott was the Fifty-One, a Washington State-built, Fort Lauderdale- based "mega" yacht owned by an Italian national, Dr. Moretti. The Fifty-One's interior design made it particularly well suited for chartering. It had four levels, including a sky deck/lounge equipped with a complete kitchen (to complement the galley located on the bottom level). There were five staterooms that could comfortably accommodate ten charter guests. Each of the regular staterooms had its own head. The master stateroom had "his and her" heads. There was also a stateroom for the captain, as well as quarters for six other crew members (the number needed to properly service a charter party). The Fifty-One had not been well maintained during the time it had been owned by Dr. Moretti. Although Dr. Moretti had made the Fifty-One available for charter, the yacht had a poor reputation among charter brokers and, as a result, it just "sat at the dock," unchartered, while under Dr. Moretti's ownership. In October of 1993, Mr. Wiviott offered to purchase the Fifty-One from Dr. Moretti for $5.1 million, subject to a satisfactory marine survey and sea trial. Dr. Moretti initially rejected the offer, but subsequently agreed to sell the Fifty- One at Mr. Wiviott's offering price (which was considerably less than the $9 million that Dr. Moretti had paid for the Fifty-One a year and a half earlier). Before the deal was consummated, Mr. Wiviott contracted with a marine survey company, Patton Marine, Inc. (Patton), to perform a thorough inspection of the Fifty-One. Patton performed an extensive pre-purchase survey of the Fifty-One, which included various sea trials and other tests (conducted in Fort Lauderdale and off the Fort Lauderdale coast). The survey revealed that the Fifty-One had various "deficiencies." Most of these "deficiencies" were "small items" and were remedied before the sale was finalized. The most serious of the remaining "deficiencies" was the excessive amount of interior vibration. Notwithstanding the known "deficiencies" that remained, Mr. Wiviott thought that, at $5.1 million, the Fifty- One was a good buy. At worst, he believed, he "could make a pretty good profit" by reselling the Fifty-One. Mr. Wiviott retained Robb Maass, whom Mr. Wiviott was told was the "top marine attorney in the [Fort Lauderdale] area," to assist him in forming a Florida corporation which would purchase the Fifty-One and operate a yacht charter business. With Mr. Maass' assistance, B. W. Marine, Inc. (Petitioner) was organized under the laws of the State of Florida, effective January 20, 1994, with Mr. Wiviott as its sole officer, director, and shareholder. Petitioner's principal corporate address was, at the time of incorporation, and has remained, 757 Southeast 17th Street, #389, Fort Lauderdale, Florida 33316. On January 28, 1994, shortly after Petitioner's incorporation, Petitioner closed on the purchase of the Fifty- One. No Florida or other state sales tax was paid on the purchase. The newly purchased yacht (which had been registered in the Cayman Islands by the previous owner, Dr. Moretti) was immediately registered with the United States Coast Guard, and it thereafter began to fly an American flag. Based upon on Mr. Maass’ advice, Petitioner also took steps to obtain a "certificate of documentation with appropriate endorsement for employment in the coastwise trade" for the Fifty-One. It was not until the following year, however, that the United States Congress (passing a bill introduced by Florida Congressman E. Clay Shaw, Jr.) authorized the Secretary of Transportation to issue such a "certificate of documentation." 2/ After taking delivery of the yacht in the Bahamas, Petitioner imported the Fifty-One into Florida. It did so because Mr. Wiviott wanted the Fifty-One to be marketed in the south Florida area and to have access to the exceptional yacht repair and maintenance facilities that were available there. The South Florida area is where the "mega" yacht charter brokers (who, in most instances, effectively "make[] the decision [as to] which boat a charter client is going to use") are concentrated and where the reputation (or, as Mr. Wiviott put it in his hearing testimony, the "aura" or illusion") of a "mega" yacht is established (in part, by the owner, captain, and crew "pander[ing]" to the broker community during showings of the yacht). It is therefore important for a "mega" yacht available for charter to have a presence in the south Florida area so that it can seen by, and shown to, the "mega" charter brokers who are concentrated there. Although most "mega" yachts are marketed in Florida, "the chartering experience [generally occurs] elsewhere," in such places as New England (in the summer) and the Caribbean and Mediterranean (in the winter). Aware of this, Mr. Wiviott, at the time that the Fifty-One was imported into Florida, had no expectation that that the Fifty-One would be used exclusively for charters in Florida waters. Mr. Wiviott wanted the Fifty-One to be imported into Florida without Petitioner having to pay any use tax. Mr. Maass advised Mr. Wiviott that Petitioner would not have to pay Florida use tax if it registered with the Department as a "dealer" and used the Fifty-One "only . . . for bare boat charter[s]." Mr. Maass cautioned Mr. Wiviott that "[t]here could be no personal recreational use, no personal use aboard the boat whatsoever." Before importing the Fifty-One into Florida, Petitioner registered with the Department as a "dealer" that would be engaging in "bare boat" charter operations in Florida. Mark Newcomer was the first captain of the Fifty-One under Petitioner's ownership. Mr. Wiviott considered Captain Newcomer to be, not a "charter captain," but a "yard captain," that is, a captain "who specializes in repairs, maintenance and upgrades of yachts." Captain Newcomer was hired by Petitioner "to take delivery [of the Fifty-One] and to oversee the renovation and retrofit[ting] of the yacht." He was responsible for ensuring that the Fifty-One was brought up to American Bureau of Shipping (ABS) standards. Obtaining certification that the Fifty-One met ABS standards was an "essential part" of any campaign to effectively "market[] the boat" for charter. Mr. Wiviott did not have any intention of continuing Captain Newcomer's employment with Petitioner following completion of "the renovation and retrofit[ting] of the yacht." Captain Newcomer brought the Fifty-One into Florida on or about February 1 or 2, 1994, and docked it at a Fort Lauderdale marina (either Pier 66 Marina or the Bahia Mar Marina). On February 3, 1994, Captain Newcomer moved the Fifty- One to the Bradford Marine Shipyard (Bradford Marine), a Department-registered Fort Lauderdale repair facility able to service boats up to 150 feet in length. The Fifty-One underwent repairs and improvements at Bradford Marine until February 12, 1994, by which time the work that had to be done with it out of the water had been completed. At Bradford Marine, Petitioner had to pay a 20 to 30 percent "surcharge on all outside vendors that c[a]me in." On February 13, 1994, Captain Newcomer moved the Fifty-One to the Bahia Mar Marina (Bahia Mar), a more cost- effective location, to do (with the help of others) the remaining repair and improvement work on the yacht (which could be done with the yacht in the water). Because Captain Newcomer was "very good friends" with the dockmaster at the Bahia Mar, he and those he supervised were allowed to perform work on the Fifty-One (involving the use of noise-generating power tools) that would have otherwise been prohibited. The Fifty-One remained at the Bahia Mar until March 14, 1994, undergoing repairs and improvements. On March 15, 1994, Captain Newcomer, accompanied by Mr. and Mrs. Wiviott (and with less than a full crew), took the Fifty-One on a cruise to the Jockey Club, a "private club" that was part of a "condominium complex resort" located in Miami. He did so pursuant to the instructions of Mr. Wiviott, with whom he spoke to on a daily basis regarding the repair and improvement work that was being done on the Fifty-One under his (Captain Newcomer's) supervision. Mr. Wiviott wanted "to take the boat out to stretch it out [and to] see the progress that Captain Newcomer was making." Furthermore, Mr. Wiviott thought that it was important for Petitioner's charter business for the Fifty- One "to be seen." Near the Jockey Club, the Fifty-One ran aground "in the mud," where it "sat . . . for about eight hours until the tide came back in." After the Fifty-One arrived at the Jockey Club, divers "g[o]t under the boat and clean[ed] the prop[eller]s [and] clean[ed] the drivetrain." The Fifty-One remained docked at the Jockey Club for three days. On March 17, 1994, the Fifty-One returned to the Bahia Mar to undergo further repairs and improvements. By mid-April of 1994, the work necessary to bring the Fifty-One up to ABS standards had been completed. Petitioner therefore applied for, and on April 19, 1994, was issued, an ABS "Class Certificate." The Fort Lauderdale Charter Broker's Boat Show (1994 Boat Show) was held at Pier 66 Marina (Pier 66) from April 14, 1994 to April 20, 1994. The Fifty-One was one of the boats entered in the 1994 Boat Show, and it remained at Pier 66 for the entire show. Mr. Wiviott was aboard throughout the event to show the boat to charter brokers and others. Captain Newcomer helped Mr. Wiviott show the boat. Food and drinks were served. Fresh flowers adorned the boat. The crew wore their dress uniforms. After the end of each day's session, Mr. Wiviott stayed aboard the Fifty-One overnight in lieu of spending company money to rent a hotel room. Following the 1994 Boat Show, from April 20, 1994 until April 28, 1994, the Fifty-one was taken on a "shakedown" cruise to Key West and back to Fort Lauderdale, during which it was run at various speeds and systems were "overloaded" to determine whether they worked properly. At the time of the cruise, the Fifty-One was not equipped with all of the staff and other accoutrements necessary to provide the "five star service" that those who charter "mega" yachts pay to receive. During the cruise, the boat docked at the Ocean Reef Club, an exclusive private resort community in Key Largo; the Galleon Marina, a public facility in Key West; Fisher Island; and the Jockey Club. There were a "few breakdowns" during the cruise, including a "crane breakdown" at the Ocean Reef Club. With the help of vendors, the necessary repairs were made. Aboard during the cruise, in addition to Captain Newcomer and a partial crew, was Mr. and Mrs. Wiviott; Mr. Wiviott's brother, Howard Wiviott; Howard's wife; Mr. Becker, whose firm provided Petitioner with accounting services (primarily through the efforts of Stacey Torchon, one of its accountants); and Mr. Becker's wife. There was no marine surveyor, no representative of a registered repair facility, and no "mega" yacht charter broker aboard during the cruise. 3/ Mr. Becker and his wife did not remain aboard for the entire cruise. They disembarked in Key Largo on April 23, 1994. During the time that he was aboard, Mr. Becker spoke to Captain Newcomer and the crew about the financial and accounting procedures that needed to be followed in conducting Petitioner's charter operations, information that Mr. Becker could have provided by telephone from his California office. (Stacey Torchon, who was "more involved [than Mr. Becker] in the day-to-day operations" of Petitioner, never met personally with any Fifty-One crew member; rather, she communicated with the crew by telephone.) While they were aboard, Mr. Becker and the other guests Mr. Wiviott had invited to take part in the cruise (referred to, collectively, hereinafter as the "Invited Guests") ate, relaxed, and enjoyed the hospitality and ambiance. The Invited Guests' presence on the Fifty-One during the "shakedown" cruise was not solely for the purpose of furthering Petitioner's charter business. Mr. Wiviott was motivated by personal reasons in inviting them aboard. The assertion (made by Petitioner in its Proposed Recommended Order) that one of the purposes of the "shakedown" cruise was to determine, through the feedback given by the Invited Guests, "whether the Petitioner was delivering the chartering experience in terms of comfort, ambiance and service that people willing to spen[d] $50,000 per week would expect" simply does not ring true. Mr. Wiviott knew full well that the Fifty-One, with a "yard captain" at the helm and less than a full crew, was not equipped to provide such service. He did not need to take the "Fifty-One" on a lengthy cruise with family and friends to find this out. Had Mr. Wiviott really wanted to learn if the Fifty-One offered a "chartering experience" for which someone would be willing to pay $50,000.00, he would have asked "mega" yacht charter brokers, not family and friends, to come aboard the Fifty-One for a cruise and give him their feedback. On April 28, 1994, following the "shakedown" cruise, the Fifty-One returned to the Bahia Mar, where, in the ensuing days, defects discovered during the "shakedown" cruise were remedied. By May 7, 1994, the Fifty-One was ready for charter. The Fifty-One, at that time, was not the only vessel in Petitioner's fleet. Shortly after acquiring the Fifty-One, Petitioner had purchased (in Florida) the Choice One and Choice Too 4/ from Mr. Wiviott. Petitioner paid Mr. Wiviott $1,138,804.28 for the Choice One. Inasmuch as the purchase was made under Petitioner's sales tax exemption certificate (that Petitioner had obtained from the Department based upon its representation that it intended to use the Fifty-One exclusively for "bare boat" charter operations in Florida), no Florida sales tax was paid. At the time of the purchase, Mr. Wiviott envisioned that Petitioner would use the Choice One as a "chase boat" for the Fifty-One (from which charterers and guests could fish). The Choice One, however, was never used by Petitioner for this purpose because it turned out that it was not feasible to do so. The Choice One wound up sitting at the dock in Fort Lauderdale, leaving only "to be stretched" or moved to another docking facility by its captain (initially Steven Ernst and then later Carl Roberts). Before its sale by Petitioner in 1995, the Choice One was chartered on only one occasion, during which time it remained at the dock in Fort Lauderdale (positioned so that those aboard could view a passing "boat parade"). The Fifty-One was chartered on a more frequent basis. Of the 15 charters of the Fifty-One during the Audit Period, however, only two (the Gerardo Cabrera and Jean Foss charters) were in Florida waters. The Gerardo Cabrera charter was the first charter of the Fifty-One following the completion of the "renovation and retrofit[ting] of the yacht." It started in Fort Lauderdale on May 18, 1994, and ended in Fort Lauderdale on May 21, 1994. The captain of the Fifty-One for the Gerardo Cabrera charter was Jon Cheney, who had replaced Captain Newcomer on May 7, 1994. The charter agreement between Petitioner (as the "Owner") and Mr. Cabrera (as the "Charterer") was dated May 13, 1994, and read, in pertinent part, as follows: In consideration of the covenants hereinafter contained, the Owner agrees to let and the Charter[er] agrees to hire the Yacht from noon on the 18th of May 1994 to noon on the 21st of May 1994 for the total sum of $18,000.00 + expenses + 6% FSST ($1,080 Dollars) of which amount $18,000 + $1,080 + $5,000 (ADVANCE toward expenses) for a total of $24,080 shall be paid on the signing of this Agreement . . . . The Owner agrees to deliver the Yacht at Bahia Mar Yachting Centre, Ft. Laud. on the 18th day of May 1994 in full commission and working order, outfitted as a yacht of her size, type and accommodations, with full equipment, inclusive of that required by law, and fully furnished, including galley and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service; and agrees to allow demurrage pro rata to the Charterer for any delay in delivery. . . . The owner's insurance policy does not cover Charterer's protection and indemnity during the term of the Charter. . . . * * * The Charterer agrees to accept the yacht delivered as hereinbefore provided and to pay all running expenses during the term of the charter. The Charterer, his agents and employees have no right or power to permit or suffer the creation of any maritime liens against the yacht, except the crew's wages and salvage. The Charterer agrees to indemnify the Owner for any charges or losses in connection therewith, including reasonable attorney's fees. * * * The Charter[er] agrees to redeliver the yacht . . . to the Owner at Bahia Mar Yachting Centre, Ft. Lauderdale, FL . . . . The Charter[er] agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, guests and servants during the term of this charter and shall not transport merchandise or carry passengers for pay, or engage in any trade nor in any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with law in all other respects. * * * 11. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the Charter[er] for the term thereof. In the event, however, that the Charterer wishes to utilize the services of a Captain and/or crew members in connection with the operation and management of the yacht, whether said Captain and/or crew members are furnished by the Owner or by the Charterer, it is agreed that said Captain and/or Crew members are agents and employees of the Charterer and not of the Owner. In the further event that local United States Coast Guard or other regulations require the Owner exclusively to provide a Captain and/or crew, or the Owner wishes to provide his own Captain and/or crew, the Owner agrees to provide a Captain who is competent not only in coastwise piloting but in deep sea navigation, and to provide a proper crew. The Captain shall in no way be the agent of the Owner, except that he shall handle clearance and the normal running of the yacht subject to the limitations of this charter party. The Captain shall receive orders from the Charterer as to ports to be called at and the general course of the voyage, but the Captain shall be responsible for the safe navigation of the yacht, and the Charterer shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The Charterer assumes total control and liability as if the Charterer were the owner of the yacht during the term of the charter. . . . This agreement, by "industry standard," is "considered a 'bare boat' charter agreement." On May 13, 1994, Mr. Cabrera (as "Employer") also entered into a separate "Yacht Employment Agreement" with Captain Cheney (as "Yacht Captain"). It provided as follows: WHEREAS, Charterer has under charter the yacht FIFTY ONE pursuant to his bare boat charter party agreement wherein it is Employer's obligation to furnish the said yacht with a competent master and crew; and WHEREAS, Yacht Captain is a competent master, having over two years' experience in the coastal and inland waters of FLORIDA and THE BAHAMAS and is able to furnish a crew for the management and navigation of the said yacht; and WHEREAS, the parties desire to reduce their agreement to written term; NOW THEREFORE in consideration of the premises and of the agreements hereinafter contained, it is agreed as follows: Employer hereby hires yacht Captain as the Master of the said yacht to act as such Master as long as the yacht is under charter to Employer. Yacht Captain agrees to furnish 6 crew men to assist in operating and navigating the said yacht. The Captain and crew, if any, shall be properly uniformed. The crew to comprise the following: [left blank] Yacht Captain shall be paid for his services and the services of his crew a total sum of TEN DOLLARS AND OTHER GOOD AND VALUABLE CONSIDERATION and Employer shall furnish the Yacht Captain and his crew, quarters and food, during the term of this Agreement. The term of this Agreement shall commence on the 18th day of MAY 1994, or at such time that the yacht shall be ready to sail pursuant to the bare boat charter party agreement with the Owner and shall terminate on the 21st day of MAY, 1994, unless sooner terminated by the termination of the yacht party agreement for any reason whatsoever. In the event that the yacht charter party agreement is sooner terminated, the Master and crew will receive a pro-rated share of the agreed compensation for their services. After collecting from Mr. Cabrera all the monies Mr. Cabrera owed under both the charter agreement and the "Yacht Employment Agreement," Rikki Davis (the broker representing Mr. Cabrera) handed these monies over to Mr. Offer (the broker representing Petitioner). (It is commonplace in the "mega" yacht chartering industry "to have the amount paid for the use of the vessel under [a] bare boat charter agreement and amount for the captain and crew paid together by the charterer as a lump sum."). Mr. Offer, in turn, forwarded the monies he was given by Ms. Davis to Petitioner. The Gerardo Cabrera charter was the only charter that took place before the captain and crew of the Fifty-One became employees of Papa's Yacht Services, Inc. (Papa's), Petitioner's sister corporation, which, like Petitioner, was incorporated in Florida and has maintained a Florida corporate address from its inception. Papa's was formed solely for the purpose of enabling Petitioner to be in "compliance [with] the bare boat charter concept." Papa's dealings with Petitioner was Papa's sole source of revenue. Petitioner paid Papa's a "management fee" for providing a captain and crew for the Fifty-One. Although the Fifty-One's captain and crew had become Papa's employees, Petitioner continued to pay for their health insurance and provide them with free room and board on the Fifty-One at all times during the Audit Period, except when the Fifty-One was under charter and the charterers provided the captain and crew with room and board. Having a full-time captain and crew aboard a "mega" yacht available for charter, even when the yacht is not under charter, is essential to conduct successful charter operations. The captain and crew must be available, on the vessel, to host the "mega" yacht charter brokers who come aboard between charters (sometimes with little or no advance notice) and to perform those everyday tasks necessary to maintain the vessel. To attract and keep qualified onboard personnel, it is necessary to provide them with, as part of their compensation package, free room and board on the "mega" yacht. Doing so is the "standard in the industry." The Fifty-One was chartered by Jean Foss from December 27, 1995 to January 3, 1996, approximately a year and a half after Papa's had become the employer of the Fifty-One's captain and crew. Ms. Foss cruised to the Bahamas during the charter. The charter originated and concluded in Fort Lauderdale. "[T]he only reason [the Fifty-One] was in Florida [for the charter was] because [Ms. Foss] wouldn't fly to the Bahamas." The charter agreement between Petitioner (as the "Owner") and Mr. Foss (as the "Charterer") was similar to the charter agreement into which Mr. Cabrera and Petitioner had entered. It was dated August 15, 1995, and read, in pertinent part, as follows: TERM, HIRE & PAYMENTS: In consideration of the covenants hereinafter contained, the OWNER agrees to let and the CHARTERER agrees to hire the Yacht for the term from 12 noon . . . on the 27th day of December, 1995 to 12 noon . . . on the 3rd day January, 1996 for the total sum of $44,800 + All Expenses of which amount $22,400.00 shall be paid on the signing of this AGREEMENT and the balance thereof as follows: remaining 50% deposit (US$22,400.00) and Florida State Sales Tax of 6% US$2,668 for a total sum of $25,088.00 due by 24 November, 1995. DELIVERY. The OWNER agrees to deliver the yacht to CHARTERER at Fort Lauderdale, Florida at 12 noon . . . on the 27th day of December, 1995, in full commission and in proper working order, outfitted as a yacht of her size, type, and accommodations, with safety equipment required by law, and fully furnished, including gallery and dining utensils and blankets; staunch, clean and in good condition throughout and ready for service, and agrees to allow demurrage pro rata to the CHARTERER for any delay in delivery. . . . * * * 5. RUNNING EXPENSES. The Charterer agrees to accept the yacht as delivered as hereinbefore provided and to pay all shipboard expenses during the term of the charter period. * * * 8. RE-DELIVERY and INDEMNIFICATION. The CHARTERER agrees to redeliver the yacht, her equipment, and furnishings, free and clear and of any indebtedness for CHARTERER's account at the expiration of this charter, to the OWNER at Fort Lauderdale, Florida at 12:00 noon on the 3rd day of January, 1996 in as good condition as when delivery was taken, ordinary wear and tear and any loss or damage for which the OWNER is covered by his own insurance, and CHARTERER's insurance (if any) set forth in Paragraph 3 of this AGREEMENT, excepted. . . . * * * 10. RESTRICTED USE. The CHARTERER agrees that the yacht shall be employed exclusively as a pleasure vessel for the sole and proper use of himself, his family, passengers and servants, during the term of this charter, and shall not transport merchandise, or carry passengers for hire, or engage in any trade, nor any way violate the Revenue Laws of the United States, or any other Government within the jurisdiction of which the yacht may be at any time, and shall comply with the laws in all other respects. * * * 12. CHARTERER'S AUTHORITY OVER CREW. It is mutually agreed that full authority regarding the operation and management of the yacht is hereby transferred to the CHARTERER for the term thereof. In the event, however, that the CHARTERER wished to utilize the services of a captain and/or crew members in connection with the operation and management of the yacht, whether said captain and/or crew members are furnished by the OWNER or by the CHARTERER, it is agreed that said captain and/or crew members are agents and employees of the CHARTERER and not of the OWNER. In the further event that local United States Coast Guard or other regulations require the OWNER exclusively to provide a captain and/or crew, or the OWNER agrees to provide a proper captain who is competent not only to coastwise piloting, but in deep sea navigation, and to provide crew, the captain shall in no way be the agent of the OWNER, except that he shall handle clearance and the normal running of the yacht subject to ports to be called at, and the general course of the voyage. The captain shall be responsible for the safe navigation of the yacht, and the CHARTERER shall abide by his judgment as to sailing, weather, anchorages, and pertinent matters. The captain and crew shall be selected by the CHARTERER with the approval of the OWNER or the OWNER's Agent. CHARTERER is aware that he has a choice of captains. CHARTERER has full right to terminate the captain and/or crew; however, replacements shall be hired as under Paragraph 12 of this AGREEMENT. . . . Ms. Foss also entered into a "Yacht Services Agreement." The agreement, dated August 16, 1995, was with Papa's, which agreed to provide a seven person crew for the Fifty-One for the charter period (December 27, 1995, through January 3, 1996). Ms. Foss, in turn, agreed to pay Papa's $11,200.00 for such crew services and, in addition, to provide the captain (Arthur "Butch" Vogelsang) and crew with food and quarters aboard the Fifty-One during the charter period. Petitioner collected and remitted to the Department the sales tax owed by Mr. Cabrera and Ms. Foss on their rentals of the Fifty-One. No Florida sales tax was due on any of the other 13 charters of the Fifty-One during the Audit Period because they all took place outside Florida. In the case of 11 of these 13 other charters, like in the Jean Foss charter, the charterer entered into a charter agreement with Petitioner for the rental of the Fifty-One, as well as a separate agreement with Papa's for employment of a captain and crew for a fee (that "represent[ed] the actual cost [to Papa's] of the crew"). Typically, the total amount due under both agreements was sent to Petitioner, and Mr. Becker's firm (which also provided accounting services to Papa's) "moved the [portion of the] funds" due Papa's to Papa's bank account. Two charterers during the Audit Period (Mutual of Omaha Marketing Company and Prince Faisal Aziz of Saudi Arabia) refused Mr. Wiviott's request that they enter into two separate agreements, one (with Petitioner) for the rental of the Fifty- One and another (with Papa's) for employment of a captain and crew. Instead, they insisted on signing a single document, a Mediterranean Yacht Brokers Agreement (or MYBA Agreement), wherein Petitioner agreed to provide both the Fifty-One and a captain and crew. Not wanting to lose the business, Mr. Wiviott, on behalf of Petitioner, entered into these MYBA Agreements, notwithstanding that he had been instructed by Mr. Maass "not [to] take MYBA contracts." The MYBA Agreement between Petitioner (as "Owner") and Mutual of Omaha Marketing Company (as "Charterer") was dated December 16, 1995, and provided that: the "charter period" would begin 12:00 noon on March 3, 1996, and end 12:00 noon on March 17, 1996; the "cruising area" would be the Caribbean; the "port of delivery" would be Guadeloupe; the "port of re- delivery" would be Grenada; the crew would consist of a captain and six other crew members; the charter fee would be $48,000.00 per week for a total (for 2 weeks) of $96,000.00; the "Advance Provisioning Allowance" would be $48,000.00; and the "delivery/re-delivery fee" would be $6,857.00. In addition, it contained the following "clauses," among others: CLAUSE 1 AGREEMENT TO LET AND HIRE The OWNER agrees to let the Yacht to the Charterer and not to enter into any other Agreement . . . for the Charter of the Yacht for the [s]ame period. The CHARTERER agrees to hire the Yacht and shall pay the Charter Fee, the Security Deposit, the Advance Provisioning Allowance and any other agreed charges in cleared funds, on or before the dates and to the Account specified in this Agreement. * * * CLAUSE 6 CREW The OWNER shall provide a suitably qualified Captain acceptable to the insurers of the Yacht and a suitably experienced Crew, properly uniformed, fed and insured. The OWNER shall ensure that no member of the Crew shall carry or use any illegal drugs on board the Yacht or keep any firearms on board (other than those declared on the manifest) and shall ensure that the Captain and Crew comply with the laws and regulations of any country into whose waters the yacht shall enter during the course of this Agreement. The MYBA Agreement between Petitioner (as "Owner") and Prince Aziz (as "Charterer") was dated March 19, 1996, and provided that: the "charter period" would begin 12:00 noon on April 2, 1996, and end 12:00 noon on April 9, 1996; the "cruising area" would be the Caribbean; St. Maarten would be the "port of delivery" and "the port of re-delivery"; the crew would consist of a captain and six other crew members; the charter fee would be $50,000.00; and the "Advance Provisioning Allowance" would be $10,000.00. It contained the following additional provisions, among others: 30. AGREEMENT TO LET The OWNER shall let the yacht for the charter period and agrees not to enter into any other agreement for the charter of the yacht for the same period, and agrees not to sell the yacht before completion of the charter period, unless otherwise agreed by the Charterer. * * * 32. CREW The Owner shall provide a properly qualified Captain approved by the insurers of the yacht and a properly qualified crew, uniformed and insured. . . . Upon the advice of Mr. Maass, Petitioner assigned to Papa's its MYBA Agreements with Mutual of Omaha Marketing Company and Prince Aziz. It also entered into "Bareboat Charter Agreements" with Papa's for the rental of the Fifty-One for the same periods covered by the MYBA Agreements (notwithstanding that the MYBA Agreements expressly prohibited Petitioner from doing so). According to what Mr. Maass told Mr. Wiviott, by Petitioner taking such action, "the MYBA contract[s] could be accepted without violating the requirement that [Petitioner] engage only in bare boat chartering." The written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company was dated December 16, 1995, the same date as the MYBA Agreement, and read, in pertinent part, as follows: BW Marine owns the vessel "Fifty-One," a 125 foot motoryacht, bearing official number 1020419 (the "Vessel"); BW Marine entered into a Yacht Charter Party Agreement dated December 16, 199[5] (the "Charter") between BW Marine and Mutual of Omaha Marketing Company (Charterer"); BW Marine desires to assign to Papa's Yacht Services, and Papa's Yacht Services agrees to accept, all BW Marine's right, title, and interest in and to the Charter; NOW THEREFORE, in consideration of the premises, the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Assignment BW Marine assigns to Papa's Yacht Services all its right, title, and interest in and to the Charter. Papa's Yacht Services accepts the assignment and assumes all obligations of BW Marine under the Charter. Payment For administrative convenience, Charterer shall pay BW Marine the charter hire under the Charter. BW Marine, in turn, shall remit the surplus of these funds over the lease amount due from Papa's Yacht Services to BW Marine under that certain Bare Boat Charter Agreement between the parties of even date herewith. . . . Mutual of Omaha Marketing Company was not a signatory to this written assignment (and no other document offered into evidence reflects that Mutual of Omaha Marketing Company consented to the assignment). 5/ The written assignment of the MYBA Agreement with Prince Aziz was dated March 19, 1996, the same date as the MYBA Agreement. It was identical to the December 16, 1995, written assignment of the MYBA Agreement with Mutual of Omaha Marketing Company (with the exception of the dates contained therein). Prince Aziz was not a signatory to this written assignment (and no other document offered into evidence reflects that Prince Aziz consented to the assignment). The first "Bareboat Charter Agreement" between Petitioner (as "Owner") and Papa's (as "Charterer") was dated December 16, 1995, and provided, in pertinent part, as follows: Owner owns the vessel "Fifty-One," a 125 foot motorcoach bearing official number 1020419 (the "Vessel"); and Charterer desires to charter the Vessel from Owner and Owner is willing to make the Vessel available to Charterer for such purpose, subject to the terms and conditions contained herein. NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Term Owner agrees to let and Charterer to hire, the Vessel for a term commencing March 3, 1996, and ending March 17, 1996. Payment Charterer shall pay Owner charter hire of One Hundred Two Thousand Eight Hundred Fifty Seven Dollars ($102,857.00), plus state sales tax, if applicable. Control The Vessel is chartered on a bare boat or demise basis. Owner hereby transfers to Charterer full authority regarding the operation and management of the Vessel for the charter term. Charterer is solely responsible for retaining a master and crew. Guest Limitation When the Vessel is underway, the number of persons on board the Vessel, other than the master and crew, shall be limited to the Charterer (or the Charterer's representative, if Charterer is a corporation) and twelve (12) guests. * * * Delivery Owner agrees to deliver the Vessel at Guadeloupe. Redelivery Charterer shall redeliver the Vessel to Owner at Granada at the end of the charter term, in as good condition as when delivery was taken, ordinary wear and tear excepted. . . . * * * 9. Expenses Charterer shall pay all running expenses during the term of the charter. Charterer shall pay for routine maintenance and repair of the Vessel during the charter term. * * * 12. Non-Assignment Charterer agrees not to assign this Agreement or subcharter the Vessel without the consent of the Owner in writing, which Owner may withhold in Owner's sole discretion. . . . The second "Bareboat Charter Agreement" between Petitioner and Papa's was dated March 19, 1996, and was identical to the first "Bareboat Charter Agreement" between them (with the exception of the charter period, charter cost, and delivery/redelivery locations). The evidence is insufficient to support a finding that Papa's ever entered into a sub-charter agreement with either Mutual of Omaha Marketing Company or Prince Aziz. Both Mutual of Omaha Marketing Company and Prince Aziz paid Petitioner the entire charter fee prescribed under their respective MYBA Agreements. They did not make any payments to Papa's. Petitioner paid Papa’s a “management fee” for providing the captain and crew during these charters. On one of the 15 charters during the Audit Period, Mr. Wiviott was aboard the Fifty-One as a guest of the charterer, the Choice Meat Co., Inc., a company that he and his son, Greg Wiviott, owned. Choice Meat Co., Inc., paid the "going charter rate" for the rental, but no broker's commission because "there was no broker to pay." There were occasions during the Audit Period, when the Fifty-One was not under charter, that Mr. Wiviott, members of his family (including his wife; children; grandchildren; his bother, Howard; and Howard's wife), and his friends used the Fifty-One outside Florida for non-business-related, personal purposes, sometimes for "one or two weeks at a time." For instance, in June of 1994 (after the Gerardo Cabrera charter and before the next charter, which began on July 21, 1994), when the Fifty-One was in New England, the Wiviott family was aboard for approximately "a couple of weeks." At the end of that summer, just before the Fifty-One returned from New England to Fort Lauderdale, the family again used the Fifty-One, this time "for a week or so." In November of 1994, around the Thanksgiving holiday, the Fifty-One traveled to the Caribbean so that the family could use it there for recreational purposes. The Fifty-One remained in the Caribbean for ten to 14 days with the family aboard. After the Wiviott children and grandchildren got off, the Fifty- One went on to the Virgin Islands, where Mr. and Mrs. Wiviott's friends came aboard and were entertained by the Wiviotts. In January of 1995, some time "shortly after the 1st," when the Fifty-One was in St. Maarten (where it was based for the winter), the Wiviott family once again spent time aboard the Fifty-One. The foregoing instances of out-of-state, non-charter, non-business-related use of the Fifty-One by the Wiviott family occurred when Captain Cheney was in command of the vessel. The Wiviott family continued to make such use of the Fifty-One during the time Captain Elario was captain. When Captain Elario took over the Fifty-One in St. Lucia (from Paul Canvaghn, who had been captain for only a day or two), Mr. and Mrs. Wiviott were aboard the vessel. They remained on board for approximately a week as the Fifty-One cruised the Caribbean. During that week, Mrs. Wiviott swam, laid in the sun, relaxed, and ate meals prepared by the Fifty- One's chef. She did not perform any tasks designed to further Petitioner's charter business. Subsequently, while Captain Elario was still captain, Mr. and Mrs. Wiviott took a non-charter, non-business-related trip on the Fifty-One to the Bahamas. Also during the time Captain Elario was captain, when the Fifty-One was in Hilton Head, South Carolina, Mr. Wiviott's brother, Howard, and Howard's wife, came aboard, and they remained on the yacht as it traveled to Norfolk, Virginia. Howard and his wife did not perform any tasks designed to further Petitioner's charter business while aboard the Fifty- One. Mr. and Mrs. Wiviott's daughter, along with her two young children, stayed overnight on the Fifty-One when, while under Captain Elario's supervision, it was docked at the Capital Marina in Washington, D.C. During the daughter's and children's stay, there was a party celebrating the youngest child's birthday. Indicative of the amount of time that Mr. and Mrs. Wiviott spent aboard the Fifty-One were the clothing and other personal items that (as a convenience) they stored (in a locker) on the Fifty-One (so that they would not have to bring these items with them each time they boarded the vessel). (These items were moved from the locker to another area on the Fifty- One, when necessary, to accommodate charterers using the stateroom in which the locker was located). Whenever the Fifty-One returned to Florida, it underwent needed repairs and maintenance. It also cruised the waters of the south Florida area, docking at various facilities. It did so not only "to be stretched," but to gain additional exposure among "mega" yacht charter brokers. In addition, while in Florida, the Fifty-One was stocked with supplies and provisions (including rack of lamb, veal, lobster tails, baked goods, gourmet foods, specialty items, wines, bath and beauty products, and party supplies) to be available for use by those on board when the Fifty-One was outside Florida, including not only charterers (such as Mutual of Omaha Marketing Company and Prince Aziz) and their guests, but also Mr. Wiviott, his family, and friends (when they were on board the Fifty-One for non-business-related, personal purposes). The Fifty-One, while in Florida, was also provided with fuel for charter, as well as non-charter, non-business related, trips outside Florida. Petitioner's charter business proved to be unprofitable. Expenses far exceeded revenues. (Petitioner, however, was able to sell the Fifty-One for more than the purchase price it had paid, receiving approximately $5.7 million, excluding commissions, for the Fifty-One in February of 2000.) By letter dated October 11, 1996, the Department informed Petitioner that it was going to audit Petitioner's "books and records" for the Audit Period. Petitioner was selected for audit because it had reported only a relatively small amount of taxable charter revenue on the Florida sales and use tax returns it filed during the Audit Period. The Department's "audit findings" were that the Fifty-One "was purchased for [a] dual purpose, for leasing and to be used by the shareholder" and therefore "the vessel and other purchases [made by Petitioner during the Audit Period under its sales tax exemption certificate, including its purchase of the Choice One] are taxable at the cost price." Based upon these audit findings, the Department issued a Notice of Intent to Make Audit Changes, in which it advised Petitioner that Petitioner owed $430,047.95 in sales and use taxes, $215,023.97 in penalties, and $169,672.70 in interest through July 18, 1997, for a total of $814,744.62, "plus additional interest of $141.39 per day . . . from 07/18/97 through the date [of] payment." By letter dated April 22, 1998, Petitioner protested the Department's proposed assessment. On November 1, 1999, the Department issued its Notice of Decision sustaining the proposed assessment and announcing that, as of October 6, 1999, Petitioner owed the Department $929,270.52, with "interest continu[ing] to accrue at $141.39 per day until the postmarked date of payment." Petitioner subsequently filed a Petition for Chapter 120 Administrative Hearing on the Department's proposed action.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order sustaining its assessment against Petitioner in its entirety. DONE AND ENTERED this 26th day of October, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of October, 2001.
