The Issue Whether the subject site is within Petitioner's permitting jurisdiction and whether an earthen dam constructed at the subject site required a permit? Whether Respondent should be required to remove the earthen dam and/or be required to pay Petitioner's investigative costs?
Findings Of Fact Petitioner is the agency of the State of Florida that regulates dredge and fill activities conducted in wetlands within its statutory jurisdiction as set forth in Chapters 373 and 403, Florida Statutes. Respondent owns the subject property, which is located in the 200 block of Jan Drive in Section 18, Township 4 South, Range 13 West, Bay County, Florida. On July 22, 1999, Mr. Keisker met informally with Respondent at Respondent’s request and made a field visit to the subject property. Mr. Keisker told Respondent that he thought the subject property was within Petitioner’s permitting jurisdiction. Although Mr. Keisker took soil samples, surveyed the plant life of the area, and observed the hydrology of the area, his visit was not intended to be an official determination that the subject property was within Petitioner's permitting jurisdiction. There is no dispute that an earthen dam was constructed across the unnamed creek, described in findings of fact paragraph 5, in late 1999 or early January 2000. The central issue in dispute is whether the site of the earthen dam is within Petitioner’s permitting jurisdiction. Respondent asserts that the area at issue is a drainage ditch that did not naturally occur and is not within the permitting jurisdiction of Petitioner. Petitioner asserts that the area is an unnamed creek in a historical, natural wetland that is within its permitting jurisdiction. The greater weight of the credible, competent evidence established that Respondent’s property contains an unnamed creek that is located in an area of historically natural wetlands that was likely excavated in the 1970's by the local Mosquito Control District. This area of natural wetlands drains and connects into Rogers Pond and Calloway Bayou, which are Class III waters of the State of Florida. The site is within the permitting jurisdiction of Petitioner. 2/ Respondent did not receive a permit prior to the construction of the earthen dam. Construction of the earthen dam constitutes unpermitted fill activity in a wetland within Petitioner's regulatory jurisdiction. Shortly after Petitioner received a complaint in January 2000 that it had been constructed, the dam was partially breached as the result of a heavy rain event. To prevent further pollution of the unnamed creek, the remaining portion of the earthen dam should be removed by non- mechanical means. Mr. Keisker testified that he calculated Petitioner’s investigative costs based on the amount of time he expended in investigating this matter multiplied by his hourly rate of pay. In calculating his hourly rate of pay, he took his annual salary and added to that 52 percent of his annual salary for fringe benefits. He then divided that sum by 2000, which represents 50 work weeks of 40 hours per week. He used 50 weeks to calculate the hourly rate to adjust for two weeks of paid vacation. Based on his calculations, Mr. Keisker testified that Petitioner incurred costs and expenses in excess of $750.00 during its investigation of this matter.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order adopting the findings and conclusions contained herein and requiring Respondent to remove the remaining portions of the earthen dam by non-mechanical means. DONE AND ENTERED this 29th day of March, 2001, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 29th day of March, 2001.
Findings Of Fact At all times relevant hereto, David E. Rabren was licensed as a Tampa Bay state pilot and was president of the Tricounty Pilot's Association (TRICO). At the time the movement of the OCEAN LORD occurred, there was only one state licensed pilot who was a member of TRICO. That was David E. Rabren. Other members held only federally issued pilot's licenses. Prior to the movement of the VOMAR, a second state licensed pilot joined TRICO. At present, there are four licensed state pilots and one deputy pilot associated with TRICO. The vessel OCEAN LORD arrived in Tampa Bay February 18, 1986, and was piloted by Captain Rabren to its berth at C. F. Industries (CFI). After taking on cargo, the OCEAN LORD was moved the same date to Gadsden Anchorage. During this move, Captain Murphy, a federally licensed, but not state licensed, pilot was on board. Captain Murphy is associated with TRICO. On February 21, 1986, the OCEAN LORD was moved from Gadsden Anchorage to the CSX Transportation dock at Rockport. Again, Captain Murphy was the pilot. On September 21, 1986, the vessel VOMAR was moved from Rockport to a dock at Big Bend with Captain Murphy as the pilot. Anita Rabren determined that the movement could be accomplished with a federally licensed pilot on board. On October 5, 1986, the vessel ASPEN, an American flag vessel, arrived at Tampa Bay, and the ship's agent requested TRICO provide a pilot. Due to a misunderstanding of the agent's statement that the ASPEN was coming from the west coast, Anita Rabren assumed this was from the west coast of the United States. Actually, the ASPEN's last port of call was in Korea. Had the vessel come from a west coast of the United States port, the voyage would have been a coastwise trip, and a federally licensed pilot would be required. A federally licensed pilot was assigned to pilot the ASPEN. The last port of call of the ASPEN was ascertained after the pilotages up Tampa Bay commenced, and the fact that an improperly licensed pilot was used was reported forthwith. TRICO paid a double pilot fee to the Tampa Bay Pilot's Association. Tampa Port Authority has jurisdiction over all of Hillsborough County and establishes rules and regulations for that area. They do not regulate pilotage of vessels. Many of the terminals in Hillsborough County are owned by the Port Authority, but some are privately owned such as Big Bend and Rockport, both of which are in the port of Tampa. The Port Authority controls the allocation of berths at all terminals owned by the Port Authority, but does not control the berths at privately owned terminals. The CFI terminal is owned by the Port Authority who establishes wharfage rates and docking rates at this terminal. The berths at Rockport and Big Bend are privately owned, and tariff rates are not set by the Port Authority. CSX Transportation owns a dock at Rockport where phosphate is loaded onto vessels. No wharfage or dockage charge is levied, but such charges are included in charges for the commodity loaded. Ships can clear customs at any of the terminals above noted. The Big Bend facility is under the jurisdiction of Gulf Coast Transit Company. Vessels bring coal to Big Bend for use by Tampa Electric Company. The AGRICO terminal at Big Bend is used for loading phosphate rock. All of these privately owned terminals are licensed by the Tampa Port Authority to whom they pay a fee and submit reports of their activities. The Tampa Port Authority charges a fee to vessels who load or unload cargo at the Gadsden Anchorage which is also in the port of Tampa. Section 310.002(4), Florida Statutes, defines "port" to mean, any place in the state in which vessels enter and depart. For Tampa Bay, this section lists Tampa, Port Tampa, Port Manatee, St. Petersburg and Clearwater as ports. Of those listed ports, Tampa and Port Tampa are in Hillsborough County and come under the jurisdiction of the Tampa Port Authority. No evidence was submitted showing the areas encompassed by the Port of Tampa and Port Tampa. The Port of Tampa's Terminal and Facilities Map (Exhibit 5) showing the port facilities at Tampa, Florida, does not show the facilities at Port Tampa; it shows only those facilities on the east side of the Tampa peninsula, and does not reach as far south as Big Bend. Presumably, if there are only two ports in Hillsborough County that portion of Hillsborough County west of the Tampa peninsula would comprise Port Tampa, and that portion of Hillsborough County east and south of the Tampa peninsula would comprise the Port of Tampa. If so, all of the movements here complained of occurred in the Port of Tampa. Exhibit 5 supports this conclusion. Finally, no credible evidence was presented that Respondent assigned a federally licensed, but not a state licensed, pilot to the OCEAN LORD, VOMAR and ASPEN as alleged, except Exhibit 3 which states the assignment of a federally licensed pilot to the Aspen was due to an error on the part of Captain Rabren. The direct testimony presented in this regard is that Anita Rabren assigned federally licensed pilots to those ships. Further, this determination that use of a federally licensed pilot for those movements of foreign flag vessels within the Port of Tampa was proper was made by Anita Rabren after receiving legal advice regarding the in-port movements of foreign flag vessels that can be piloted by a federally licensed pilot.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: State Road Number 688, also known as Ulmerton Road, is a major east- west arterial road in Pinellas County. The Paradyne Corporation owns property south of Ulmerton Road and the intervenors, the Millers and the Benjamins, own property located immediately adjacent and to the west of the Paradyne property. Located on the Paradyne property are six or eight commercial buildings, parking lots and a road which runs between Ulmerton Road and 126th Avenue, a county road. At the present time Paradyne employs approximately 1,700 persons who park approximately 1,400 cars per day in the parking lots located on Paradyne's property. On a form entitled "State of Florida Department of Transportation Driveway Permit," Paradyne requested "permission for the construction of a driveway(s) on Department of Transportation right-of-way" at State Road No. 688, Section No. 15120, Mile Post No. 6.350 in Pinellas County. The request was approved by the Department of Transportation on June 6, 1981. Attached to the approved permit were various conditions and stipulations and a sketch or drawing of the proposed construction. Paradyne constructed the connection with the Ulmerton Road light- controlled intersection, as well as a private road leading to it, in a manner whereby only vehicles utilizing the Paradyne property would have access to the intersection. The actual location or configuration of the connection on the State's right-of-way deviated somewhat from the location or configuration shown on the sketch or drawing attached to the permit. The permit issued to Paradyne in 1981 did not include any provisions regarding or sketches illustrating an access road on private property. The property owners adjacent to Paradyne, the intervenors herein, also desired a means of access to the light- controlled intersection on Ulmerton Road. Paradyne refused to allow intervenors to use the private road on its property. The intervenors' request to DOT for a separate connection to Ulmerton Road was denied for safety reasons. The DOT also denied the intervenors' request that a cease and desist order be issued that would require Paradyne to allow the intervenors the use of Paradyne's road. DOT's reason for refusing such a request was that it was beyond the jurisdiction of the DOT to order a 250- foot access road over the parties' private property. Apparently, the construction of a 250-foot joint use road was the subject of preliminary discussions between Paradyne and persons who had previously held an option to purchase the intervenors' land. However, as noted above, the permit was issued only to Paradyne and there is no mention therein of a 250-foot joint use drive on the private property of either Paradyne or the intervenors. Having failed in their attempts with Paradyne and the DOT to gain access to the Ulmerton Road light-controlled intersection, the intervenors filed an action in the Pinellas County Circuit Court seeking a declaratory judgment and a mandatory injunction requiring Paradyne to participate with them in the construction of a 250-foot joint use drive. The Circuit Court ordered Paradyne to so participate in accordance with the driveway permit and the DOT drawing. On appeal to the District Court of Appeal, Second District, it was concluded that there was substantial evidence to support the Circuit Court's finding that DOT intended that the owners of both parcels would have access to the light- controlled intersection. However, the appellate court found "that the circuit court violated due process of law because it did not have authority to order appellant to participate with appellees in the construction of the 250-foot-connector road. The permit, as issued, did not require a 250-foot connector road. The circuit court is only authorized to enforce the DOT permit under section 120.69. The authority to regulate connectors to state roads has been delegated to DOT pursuant to section 335.18, Florida Statutes (1981). Therefore, we reverse and remand to the circuit court to enforce the DOT permit pursuant to section 120.69, so both parcels will have access to the light-controlled intersection. Upon remand, DOT may intervene as a matter of right pursuant to section 120.69(1)(d), or be joined as an indispensable party based on its duties under section 335.18: It is possible that DOT will find that the intersection, as designed, does not meet the standards in section 335.18, Florida Statutes (1981). In this event, DOT should be allowed to re- design the connector road to meet the standards of section 335.18, and to have minimal impact on the property rights of appellant and appellees. In the event it becomes impossible to provide the parties access to the intersection as contemplated by DOT's permit, DOT has authority under section 335.18(4) to deny access and revoke the permit. Affirmed in part and reversed in part and remanded with instructions." Paradyne Corporation v. Miller, 455 So.2d 432, at 434 (Fla. 2nd DCA, 1984). On remand, the DOT intervened in the proceeding. By Order filed on December 23, 1985, the Circuit Court of Pinellas County noted that the intervenors herein and the DOT sought to present a redesign of the intersection and connector road and that Paradyne objected. The Court denied the proceedings sought by the intervenors herein and the DOT, concluding that "this hearing is premature in view of the fact that a new permit must be issued for a material change of the intersection, and that Defendant (Paradyne), in the issuance of a new permit has all the rights of objection and administrative process that it had under the first permit..." Irvin E. Miller, et al v. Paradyne Corporation, et al, Case No. 82-3441-8 (Circuit Court for Pinellas County, December 23, 1985). The instant "Alleged Violation of the Florida Statutes and Notice to Show Cause" is dated March 31, 1986. That document charges that the highway connection constructed by Paradyne is in violation of Section 335.18(3) and 335.18(1) for the reasons that: it was not constructed in accordance with the permit design plan to provide joint access to Paradyne and the intervenors' adjoining properties, and (b) a material redesign of the existing connection in accordance with an attached drawing is required due to disruption of traffic and safety hazards caused by the greatly increased numbers of vehicles using the road connection. Paradyne was ordered to comply or show cause why its connection permit should not be revoked and access denied to the connection. On the south side of Ulmerton Road, the DOT's right-of-way extends 38 feet from the berm of Ulmerton Road. There is no dispute over the fact, and petitioner so admits, that the connection Paradyne constructed on the State's right-of-way was not in accordance with the drawing attached to its 1991 permit. However, the DOT presented no evidence that it now desires Paradyne to alter the connection so as to be in compliance with the 1981 permit drawing. In late 1984, after the remand from the District Court of Appeal, Second District, the intervenors retained the DSA Group, formerly Diaz-Seckinger & Associates, Inc., to prepare a report on the joint use of improvements at the intersection of Ulmerton Road and the Paradyne entrance. The DSA Group conducted traffic studies and prepared a "Report on Existing Conditions and Joint Use Access Proposal at Ulmerton Road and Entrance to Paradyne." The report recommended a redesign and contained drawings for a major revision of the intersection actually on Ulmerton Road, the connection on the right-of-way and a 250-foot long joint access road on the private property of Paradyne and the intervenors. While DOT employees were consulted regarding this report and its recommendations and had some input during its preparation, there was no showing that Paradyne participated in the report or the recommended redesign of Ulmerton Road, the connection or the joint use drive. Indeed, according to the engineer responsible for the DSA report, the report and redesign were developed and submitted to the intervenors and the DOT "for their use in meeting and negotiating with the Paradyne. At the time we took the contract we were under the opinion that they were hopefully resolving things with the property owners and they wanted something to go to Paradyne as an offering of one alternative, frankly, with the expectation that there may be something coming back saying "Well, we need to modify this and this." As it turns out, this plan as of a year ago or over a year ago, it's the one that stands right now." (Transcript, pages 98 and 99). Apparently, the intervenors, prior to commissioning the DSA report, requested the DOT to perform a survey or study. DOT declined to do so on the ground that "this had to do with private drives, private property and it was DOT's position that we did not fund evaluations for access into private development." (Transcript, page 136). The redesign of the Ulmerton Road intersection and entrance to the Paradyne/Intervenors property, along with the 250-foot joint use road, recommended by the DSA Group is identical to the redesign required under specification (b) of the Notice of Violation and to Show Cause issued by the DOT. The drawing attached to the Notice to Show Cause is the drawing prepared by the DSA Group. Traffic has increased at the intersection of Ulmerton Road and the entrance to the Paradyne property. The traffic signal in the center of Ulmerton Road allows Paradyne employees traveling westward on Ulmerton to turn south into Paradyne's parking lots, allows exiting employees to turn westward or eastward and also allows traffic exiting from a development known as Tall Pines Estates on the north side of Ulmerton to turn east or west. During two peak traffic flow hours in 1981, 780 vehicles traversed the intersection straight through from east to west, and 235 westbound vehicles turned left or southward into the Paradyne parking lot from Ulmerton Road. In 1985, the through vehicles numbered 1,224 and the left-turning vehicles numbered 379 during the peak traffic hours. It was not established by the testimony and evidence that the increase in through traffic from east to west is the result of any increased activity on the part of either Tall Pines Estates on the north side of Ulmerton or Paradyne on the south side. The increased number of westbound, left-turning vehicles into the Paradyne parking lots causes some backup from the existing stacking lane during the morning and afternoon peak hours, thus causing some congestion on the north or westbound half of Ulmerton Road. The single, existing stacking lane for westbound, left-turning vehicles is approximately 120 to 150 feet long. A survey conducted in late 1984 demonstrated that for the morning peak period, the level of service was an "E", indicating forced flow with traffic backing up. In the afternoon peak period, the level of service was a "D", meaning that drivers had to wait two or three cycles to get through the intersection. The desirable or comfortable level of service is a "C", meaning that the motorist has to stop for only one change of lights. The DOT's minimum accepted design standard in an urban area is a level "D" service. In 1985, the actual accident rate in ratio to the critical accident rate slightly exceeded 1 in the area of the subject intersection. The recommendations of the DSA Group, and the redesign required by the DOT in its Notice to Show Cause, calls for the construction of a dual or double stacking area, 350 feet in length, for the westbound approach on Ulmerton Road and a widened receiving approach on the property to the south to accommodate the dual left-turning traffic. The plan also calls for two westbound turning lanes out of Paradyne property. The median barrier for westbound traffic on Ulmerton Road would need modification. In addition to the widened entrance on the private property to the south, the DSA design calls for the private access road to be extended to a point 250 feet south, with a fence or curb barrier to control the flow of traffic from Paradyne's parking lots at designated points into the access road. The access road would require approximately 22,700 square feet for a joint use area, with 13,980 square feet located on Paradyne's property and 8,750 square feet located on the intervenors' property. The joint use road could either be maintained as a private road pursuant to an agreement between the property owners or it could, perhaps, be dedicated to public use. There was no evidence as to whether Pinellas County would be agreeable to accepting the dedication and thereby becoming responsible for the road's maintenance. It is anticipated that this redesign, primarily because of the dual left turn lanes on Ulmerton Road, would improve the level of service in the morning peak hours to a level "D", and in the afternoon peak period to a level "C". The cost for construction on Ulmerton Road is estimated to be $310,000.00 and the cost for the private 250-foot long drive is estimated to be $50,000.000. In the opinion of the designer of the DSA plan, there is no practical method of design that would allow two separate accesses for Paradyne's and the intervenors' use. The provision of separate accesses would create a five-lead intersection which would cause "even more difficulties in traffic operations." (Transcript, page 86). The DOT's traffic engineer would not approve the traffic signal operation which would be required if there were separate access roads ingressing and egressing the two properties south of the subject intersection. All the proposed modifications at the approach to the property south of Ulmerton Road could be located on Paradyne's property. This would cause a slight offset of the intersection and would cause Paradyne to lose some property now used as a parking lot.
Recommendation Based upon the findings of fact and conclusions of law recited herein, IT IS RECOMMENDED THAT the "Alleged Violation of the Florida Statutes and Notice to Show Cause" be dismissed. IT IS FURTHER RECOMMENDED THAT said dismissal be without prejudice to the Department of Transportation to issue to Paradyne Corporation a new permit specifying the location and design it considers appropriate for Paradyne's connection to Ulmerton Road, said design containing specifications for construction on Ulmerton Road and its right-of-way, as well as any requirements at Paradyne's entrance beyond the DOT's right-of-way deemed necessary to accommodate proper traffic flow and eliminate safety hazards. Should a new permit be issued, Paradyne should be afforded thirty (30) days within which to indicate its intent to either comply with the new permit terms and conditions or forfeit its access rights to Ulmerton Road. Respectfully submitted and entered this 4th day of February, 1987, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of February, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1709 The proposed findings of fact submitted by each of the parties have been fully considered and have been accepted and/or incorporated in this Recommended Order, except as noted below: Petitioner, Department of Transportation Rejected as irrelevant and immaterial to the issues in dispute. Respondent, Paradyne Corporation NOTE: The respondent's proposed "findings of fact" contain many statements which constitute legal argument or restate the legal positions of counsel for the parties. To that extent, those statements are not proper "findings of fact" and are rejected as factual findings. All but the last sentence is rejected. The documents referenced were not the subject of a proper request for official notice and, therefore, cannot be considered evidence in this proceeding. 4 and 5. Rejected. Under proper circumstances, as discussed in the conclusions of law, the term "connection" may include more than the DOT right-of-way. First sentence rejected as contrary to the evidence. Rejected as irrelevant and immaterial. Accepted only insofar as it correctly states that the responsibility for cost of construction on Ulmerton Road was not made an issue in this proceeding. Intervenors, Miller and Benjamin NOTE: The intervenors have filed a proposed recommended order which is not separated into "findings of fact" and "conclusions of law." To the extent that proposed factual findings are suggested in said filing, they are accepted with the exception of: Page 1, last sentence: Rejected; the document does not cite Paradyne for refusing the redesign. It simply states that a redesign is required. Page 4, next to last paragraph: Rejected as contrary to the evidence and contrary to the law. Page 5, 3rd paragraph: Rejected as erroneous legal conclusion insofar as "joint access" is intended to encompass a "joint use road" on private property. COPIES FURNISHED: Vernon L. Whittier, Esquire Haydon Burns Building M.S. 58 Tallahassee, Florida 32301-8064 John R. Bush, Esquire Bush, Ross, Gardner, Warren & Rudy 220 South Franklin Street Tampa, Florida 33602 Bruce Marger, Esquire Gardner, Reams, Marger, Davis, Piper & Bartlett, P.A. 1700 66th Street North - 501 Post Office Drawer 41600 St. Petersburg, Florida 33743 Kaye Henderson, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 =================================================================
The Issue Whether the Appellant, Edward M. Mitchell, has demonstrated that development rights in certain real property he owns have vested against the provisions of the 2010 Comprehensive Plan?
Findings Of Fact The Property at Issue. On or about September 23, 1980, Mr. Mitchell entered into an agreement to purchase 6.141 acres of property (hereinafter referred to as the "Property"), located just north of Interstate 10, on the east side of North Meridian Road, Leon County, Florida. The Property was to be purchased from Textron Petroleum Products, Inc. The following "additional provision" was included in the agreement entered into for the purchase of the Property: Buyer to have 30 days from date hereof within which to obtain such permits as he deems necessary. If Buyer cannot obtain the same, he shall give written notice thereof within said time limit and the contract shall be null and void. If such written notice is not given within such period, this contingency shall be deemed waived. In 1980, the Property was zoned C-1, neighborhood commercial. Under C- 1 zoning, neighborhood commercial, up to 69,000 square feet of commercial space could be placed on the Property based upon a restriction of 85% impervious surface. Mr. Mitchell wanted to insure that he could obtain the permits necessary to develop the Property consistent with C-1 zoning before he purchased the Property. On or about November 3, 1980, the real estate broker involved in the purchase of the Property, sent a letter to Bob Speidel of Environmental Services of Leon County. In the letter Leon County was informed of the pending sale of the Property and the contingency of "Mr. Mitchell being able to obtain a permit to develop the tract by clearing the land, constructing a retention pond and filling the remaining land to a usable elevation." On or about November 7, 1980, an Application for Permit for Clearing and Development was filed on behalf of Mr. Mitchell. This permit was the only permit required in 1980 to develop the Property. The evidence failed to prove, however, that it was the only permit required to develop the Property immediately before the adoption of the 2010 Comprehensive Plan. On or about November 14, 1980, a Clearing and Development Permit, number 1113 (hereinafter referred to as "Permit 1113"), was issued on the Property by the Leon County Department of Public Works, Division of Environmental Services. Permit 1113 specifically provided that Mr. Mitchell was authorized by the permit "to make changes in this land proposed to be subdivided, developed or changed in use by grading, excavating, removal, alteration or destruction of the natural top soil, as hereinafter located and described." The specific use Mr. Mitchell planned to put the Property to and the manner of developing the Property were not specified in Permit 1113 or the application therefore. On or about December 23, 1980, Mr. Mitchell purchased the Property for $44,211.92. Mr. Mitchell would not have purchased the Property for the price paid if it had not been zoned C-1 or if he had not obtained Permit 1113 or a similar permit. The weight of the evidence failed to prove that Mr. Mitchell informed Leon County prior to his purchase of the Property what specific use the Property would be put to or that Leon County ever approved any specific type of development of the Property. Development of the Property. Sometime between 1980 and 1985, Mr. Mitchell cleared the Property. In June, 1985, Mr. Mitchell applied with the Florida Department of Environmental Regulation for a General Permit for New Stormwater Discharge Facility Construction. In October, 1985, the permit was approved. When the Property was cleared some of trees were removed which should not have been removed. Therefore, in July, 1985, Mr. Mitchell agreed to replant trees on the Property. In August, 1985, Mr. Mitchell was issued a Tree Removal Permit for the trees that had already been removed. Mr. Mitchell brought fill (approximately five feet) onto the Property and did substantial grading of the Property. The elevation of the Property was increased from 108 feet to 112-113 feet. Storm water drainage was designed and installed on the Property. The storm water pond was built to accommodate 65,000 to 70,000 square feet of construction. Leon County was aware of this fact. In order to maximize use of the Property a Leon County employee informed Mr. Mitchell that he could place the retention pond on an abutting parcel of property. Consequently, Mr. Mitchell purchased an adjoining parcel of real estate. Mr. Mitchell has not obtained a storm water permit, a building permit or site plan review or approval for the Property. Mr. Mitchell has worked closely with officials of Leon County before and after his purchase of the Property. Mr. Mitchell retained an engineer to prepare a site plan for the Property. The site plan was prepared consistent with C-1, neighborhood commercial zoning, 85% impervious surface and off-site retention. The weight of the evidence failed to prove that Leon County was made aware of the site plan. Mr. Mitchell would not have done the site work or purchased the abutting parcel of property except for the C-1, neighborhood commercial zoning of the Property and the issuance of Permit 1113. The weight of the evidence failed to prove that Mr. Mitchell informed Leon County after his purchase of the Property what specific use the Property would be put to or that Leon County ever approved any specific type of development of the Property. Change in Position or Obligations and Expenses Incurred by Mr. Mitchell. Mr. Mitchell spent $44,211.92 to purchase the Property based upon the zoning on the Property and the issuance of Permit 1113. The work performed on the Property after it was purchased by Mr. Mitchell was performed primarily by Mitchell Brothers, Inc., a company owned by Mr. Mitchell. The "value" of the work performed by Mr. Mitchell was in excess of $250,000.00. The evidence failed to prove what the actual cost of the work performed was to Mr. Mitchell. Mr. Mitchell acquired the abutting parcel of property in reliance on the zoning on the Property, Permit 1113 and a suggestion of an official of Leon County. The abutting property costs several thousand dollars. The evidence failed to prove, however, that the suggestion of the Leon County official concerning the purchase of the abutting property constituted a representation of Leon County that the Property could be developed in a particular manner. It was merely a solution offered to a problem of Mr. Mitchell which Mr. Mitchell was free to reject or accept. The suggestion also only confirmed that the Property could be developed under the current zoning. Development of the Property under the 2010 Plan. Under the 2010 Comprehensive Plan, the Property is located in an area designated as "lake protection." Only minor commercial uses would be permitted in such an area. Under the 2010 Comprehensive Plan, the Property may be developed with a maximum of 20,000 square feet of retail (non-office) space. Additionally, one dwelling unit per two acres of property could also be used for residential purposes. Therefore, the Property could be developed by building three residences on the Property in addition to the 20,000 square feet of retail space. Only approximately one-third of the site work that has been performed on the Property would be needed to develop only 20,000 square feet of commercial space on the Property and the purchase of the abutting property would not have necessary. Procedure. On or about November 2, 1990, Edward M. Mitchell filed an Application for Vested Rights Determination (hereinafter referred to as the "Application"), with Leon County. By letter dated January 2, 1991, Mr. Mitchell was informed that his Application was incomplete. By letter dated January 18, 1991, Mr. Mitchell provided the additional information requested. By letter dated January 25, 1991, Mr. Mitchell was informed that Leon County intended to deny his Application. Mr. Mitchell requested a hearing before the Staff Committee of Leon County by letter dated January 30, 1991. On February 11, 1991, a hearing was held to consider the Application before the Staff Committee. By letter dated February 13, 1991, Mark Gumula, Director of Planning of the Tallahassee-Leon County Planning Department informed Mr. Mitchell that the Application had been denied. On February 22, 1991, a Notice of Appeal was filed by Mr. Mitchell appealing the decision to deny the Application. By letter dated March 1, 1991, the Division of Administrative Hearings was requested to provide a Hearing Officer to review this matter. By agreement of the parties, the undersigned allowed the parties to supplement the record in this matter on May 24, 1991.
The Issue The issue in this case is whether proposed amendments to Rule 12A-1.070 are an invalid exercise of delegated legislative authority. Petitioners and Intervenors challenge Proposed Rule 12A-1.070(1) and (4)(a) and (b). Respondent published the amendments in the Florida Administrative Law Weekly on March 18, 1994 and June 10, 1994. As described in the Joint Prehearing Stipulation, the proposed rule amendments address, among other things, the taxation of payments to airport authorities from concessionaires like rental car companies and airport restaurants. The law imposes a sales tax on payments for the use or occupancy of real property, whether the agreement consists of a lease or a license to use real property. The main dispute in these cases is whether the proposed rule amendments illegally extend the sales tax to payments for intangibles like a concession, franchise, or privilege to do business.
Findings Of Fact The Proposed Rules By notice published in 20 Florida Administrative Law Weekly 1549 on March 18, 1994, Respondent proposed amendments to existing Rule 12A-1.070. (All references to Sections are to Florida Statutes. All references to Rules are to the Florida Administrative Code. All references to Proposed Rules are to the rule amendments that are the subject of this proceeding.) The notice explains that the purpose of the rule amendments is to clarify the application of specific statutory sales tax exemptions for the lease or license to use real property at airports, malls and nursing homes. The rule amendments clarify that the total payment pursuant to a lease or license of real property is subject to tax, unless specifically exempt, irrespective of how the payment, or a portion thereof, is identified. However, if such leased property includes specifically exempt property, then such exemption may be applied on a pro rata basis. 20 Florida Administrative Law Weekly 1549 (March 18, 1994). In the notice, Respondent cites as specific authority for the proposed amendments Sections 212.17(6), 212.18(2), and 213.06(1). Respondent states that the proposed amendments implement Sections 212.02(10)(h) and (i) and (13), 212.03(6), and 212.031. By notice published June 10, 1994, in 20 Florida Administrative Law Weekly 4096, Respondent proposed amendments to the amendments previously proposed. As amended by both notices, Rule 12A-1.070 provides, with deletions stricken through and additions underlined: * 12A-1.070 Leases and Licenses of Real Property; Storage of Boats and Aircraft (1)(a) Every person who rents or leases any real property or who grants a license to use, occupy, or enter upon any real property is exer- cising a taxable privilege unless such real property is: * * * <<a>>. Property used at an airport exclusively for the purpose of aircraft landing or aircraft taxiing or property used by an airline for the purpose of loading or unloading passengers or property onto or from aircraft or for fueling aircraft. See Subsection (3). <<b. Property which is used by an airline exclusively for loading or unloading passengers onto or from an aircraft is exempt. This property includes: common walkways inside a terminal building used by passengers for boarding or departing from an aircraft, ticket counters, baggage claim areas, ramp and apron areas, and departure lounges (the rooms which are used by passengers as a sitting or gathering area immed- iately before surrendering their tickets to board the aircraft). Departure lounges commonly known as VIP lounges or airport clubs which are affiliated with an airline or a club which requires a membership or charge or for which membership or usage is determined by ticket status are not included as property exempt from tax. The lease or license to use passenger loading bridges (jetways) and baggage conveyor systems comes under this exemption, provided that the jetways and baggage conveyor systems are deemed real property. In order for the jetways and baggage conveyors to be deemed real property, the owner of these items must also be the owner of the land to which they are attached, and must have had the intention that such property become a permanent accession to the realty from the moment of installation. The items shall not be considered real property if the owner, when the owner is not the airport, retains title to the items after the purchase/installation indebtedness has been paid in full. Any operator of an airport, such as an airport authority, which is the lessee of the land on which the airport has its situs is, for the purposes of this sub- subparagraph, deemed the owner of such land. Real property used by an airline for purposes of loading or unloading passengers or property onto or from an aircraft which is exempt from tax includes: office areas used to process tickets, baggage processing areas, operations areas used for the purpose of the operational control of an airline's aircraft, and air cargo areas. If any portion of the above property is used for any other purpose, it is taxed on a pro- rata basis, which shall be determined by the square footage of the portions of the areas in the airport that are used by an airline exclusively for the purpose of loading or unloading passengers or property onto or from aircraft (which areas shall be the numerator) compared to the total square footage of such areas used by the airlines (which areas shall be the denominator). Example: An airline leases a total of 3,000 square feet from an airport authority. The airline uses the space as follows: 1,000 square feet are used to process tickets and check in the passengers' luggage; 1,000 square feet are used for the passengers' departure lounge; and 1,000 square feet are used for the management office and the employees' lounge. The 1,000 square feet used to process tickets and check in the luggage is exempt; the 1,000 square feet used as a passengers' departure lounge is also exempt; and the 1,000 square feet used as the management office and employees' lounge is taxable. Therefore, a total of 2,000 square feet is exempt because that portion of the total space leased by the airline is used exclusively for the purposes of loading or unloading passengers or property onto or from an aircraft. However, the total amount used as office space and the employees' lounge (i.e., 1,000 square feet) is taxable, because that portion of the space leased by the airline is not used exclusively for the purposes of loading or unloading passengers or property onto or from an aircraft. Real property used for fueling aircraft is taxable when the fueling activities are conducted by a lessee or licensee which is not an airline. However, the charge made to an airline for the use of aprons, ramps, or other areas used for fueling aircrafts is exempt. From July 1, 1990, through June 30, 1991, property used at an airport to operate advertising displays in any county as defined in s. 125.011(1), F.S., was exempt from tax.>> * * * (b)1. A person providing retail concessionaire services involving the sale of food or drink or other tangible personal property within the premises of an airport shall be subject to tax on the rental of such real property. 2. However, effective July 1, 1987, a person providing retail concessionaire services involving the sale of food and drink or other tangible personal property within the premises of an airport shall not be subject to the tax on any license to use such property. For purposes of this subparagraph, the term "sale" shall not include the leasing of tangible personal property. <<3. For purposes of this rule, the term "retail concessionaire," which may be either a lessee or licensee, shall mean any person .. . who makes sales of food, drinks, or other tangible personal property directly to the general public within the premises of an airport. With regard to airports, any persons which contract to service or supply tangible personal property for airline operations are considered to be providing aircraft support services and are not concessionaires for purposes of this rule.>> * * * The provisions of this rule relating to the license to use, occupy, or enter upon any real property are effective July 1, 1986, unless other- wise noted. "Real property" means the surface land, improvements thereto, and fixtures, and is synonymous with "realty" and "real estate." "License," with reference to the use of real property, means the granting of a privilege to use or occupy a building or parcel of real property for any purpose. <<1. Example:>> [[(g)]] An agreement whereby the owner of real property grants another person permission to install and <<operate>> [[maintain]] a full service coin-operated vending machine, coin- operated amusement machine, coin-operated laundry machine, or any like items, on the premises is a [[taxable]] license to use real property. The consideration paid by the machine owner to the real property owner <<for the license to use the real property>> is taxable. . . . <<2. Example:>> [[(h)]] An agreement between the owner of real property and an advertising agency for the use of real property to display advertising matter is a [[taxable]] license to use real property. <<The consideration paid by the advertising agency to the real property owner for the license to use the real property is taxable.>> * * * (4)(a)<<1.>> The tenant or person actually occupying, using, or entitled to use any real property from which rental or license fee is subject to taxation under s. 212.031, F.S., and shall pay the tax to his immediate landlord or other person granting the right to such tenant or person to occupy or use such real property. <<2. Where the lessor's or licensor's ability to impose fee(s) is based on its ownership or control of the real property, and the payment made to the lessor or licensor is for the lessee's or licensee's use of the real property, such fees are subject to tax. In such circumstances, the total payment for the use of real property, including airport property, is taxable, irrespective that the payment or a portion of the payment may be identified as consideration for the privilege to do business at that location, privilege fee, guaranteed minimum, concession fee, percentage fee, or by the use of similar terms which seek to distinguish such portion(s) from the payment for the lease of or license to use such real property for any purpose, unless such lease or license is otherwise specifically exempt. Example: A clothing retailer occupying a location inside a mall has an agreement with the owner of the mall under which it pays a minimum rent plus a percentage of its gross sales for the right to operate its store at that location. The agreement characterizes the minimum rent as consideration for the lease of designated real property and the percentage of gross sales as consideration for the privilege to do business in the mall; failure to make any of these payments can cause the agreement to be terminated. The total amount required under the agreement is subject to tax, regardless of how the consideration, or a portion thereof, is characterized. Example: A push cart or kiosk vendor has an agreement with the owner of the mall under which it pays a minimum rent plus a percentage of its gross sales for the right to sell its merchandise at various locations within the common areas of the mall. Failure to make the payments can terminate the right to sell merchandise in the mall. The total amount under the agreement is subject to tax because the statute defines a taxable license as the granting of the privilege to use real property for any purpose, including the privilege to use the real property to do business. Example: A car rental company has an agree- ment with an airport authority to operate its rental car business with a designated office and counter space within the airport terminal building. The agreement provides for a payment designated as rent for the use of real property as well as a payment based on a percentage of gross sales designated as a privilege fee for engaging in business at the airport. Failure to make either payment can terminate the agreement. The total amount required under the agreement is subject to tax. All past declarations, including Temporary Technical Assistance Advisements issued pursuant to Emergency Rule 87AER-91, Technical Assistance Advisements, Letters of Technical Assistance, and similar correspondence, issued by the Department, which advised that fees or portions of fees identified as privilege fees to engage in business were exempt, and which are inconsistent with this rule are rescinded. Therefore, such privilege fees are taxable payments for a lease or license to use real property for business purposes. (b) Except for tolls charged to the travelling public, both commercial and non- commercial, imposed exclusively for the right to travel on turnpikes, expressways, bridges, and other public roadways, the full consideration paid for the license to use airport real property for the purpose of picking-up or dropping-off passengers and baggage from airport sidewalks, landings, and other facilities by any person providing ground transportation services to such airport, shall be taxable as a license to use airport real property, irrespective of whether the operator of such service enters the airport terminal building while engaged in providing such service. Example: The fee paid by a hotel to an airport, for the privilege of coming on the airport property for the purpose of picking-up and dropping- off its guests at the airport terminal, is a license to use airport real property, and is taxable. Example: The fee paid by a taxicab and limousine company to an airport, for the privilege of coming on the airport property for the purpose of picking-up and dropping- off its passengers at the airport terminal, is a license to use airport real property, and is taxable. Example: The fee paid by a remote location rental car company, for the privilege of using the airport premises to pick-up and drop-off its customers at the airport terminal, is a license to use real property, and is taxable.>> Note: In the above text, language added to the statute is within the <<>>; deleted language is within the [[]]. Statutes and Legislative History As amended by 66, Chapter 86-152, Laws of Florida, Section 212.031 states: (1)(a) It is declared to be the legislative intent that every person is exercising a taxable privilege who engages in the business of renting, leasing, [[or]] letting<<, or granting a license for the use>> of any real property unless such property is: * * * Note: In the above text, language added to the statute is within the <<>>; deleted language is within the [[]]. Section 212.02(10)(h) defines "real property" as "the surface land, improvements thereto, and fixtures, and is synonymous with 'realty' and 'real estate.'" The 1986 amendments extend the sales tax to licenses for the use or occupancy of real property. Section 212.02(10)(i) defines "license." "License," as used in this chapter with reference to the use of real property, means the granting of a privilege to use or occupy a building or a parcel of real property for any purpose. Section 212.031 imposes a sale tax for the use and occupancy of real property, but not upon payments for intangibles, such as a franchise, concession, or other privilege to do business. The sales tax imposed by Section 212.031 is limited to the payments, or portions of payments, for the use or occupancy of real property. Each of the ten subsections under Section 212.031 exempts from the sales tax various types of property. Three exemptions relevant to these cases are at Section 212.031(1)(a)6, 7, and 10, which exempt real property that is: 6. A public street or road which is used for transportation purposes. 7. Property used at an airport exclusively for the purpose of aircraft landing or aircraft taxiing or property used by an airline for the purpose of loading or unloading passengers or property onto or from aircraft or for fueling aircraft or, for the period July 1, 1990, through June 30, 1991, property used at an airport to operate advertising displays in any county as defined in s. 125.011(1). Leased, subleased, or rented to a person providing food and drink concessionaire services within the premises of [[an airport,]] a movie theater, a business operated under a permit issued pursuant to chapter 550 or chapter 551, or any publicly owned arena, sport stadium, convention hall, [[or]] exhibition hall<<, auditorium, or recreational facility. A person providing retail concessionaire services involving the sale of food and drink or other tangible personal property within the premises of an airport shall be subject to tax on the rental of real property used for that purpose, but shall not be subject to the tax on any license to use the property. For purposes of this subparagraph, the term "sale" shall not include the leasing of tangible personal property.>> Note: In the above text, language added to the statute is within the <<>>; deleted language is within the [[]]. The indicated changes in subparagraph 10 were enacted by 10, Chapter 87-101, Laws of Florida. The remaining statutes cited by Respondent as law implemented by the Proposed Rules are not relevant to this proceeding. Court Decisions In Quick and Havey v. Department of Revenue, Case No. 72-363, Second Judicial Circuit, decided December 5, 1974, Donald O. Hartwell, Circuit Judge, entered a summary judgement in favor of Respondent. Quick and Havey operated a food concession at the municipal auditorium in West Palm Beach. In return for the concession, they agreed to pay the city base rental and a percentage of gross sales. The agreement entitled Quick and Harvey to the exclusive occupancy of part of the auditorium; they also provided concession services at other locations throughout the auditorium. Quick and Harvey paid the sales tax on the base rental, but argued that the percentage payment constituted "a fee paid for the exercise of a privilege." Judge Hartwell held that the tax applied to the base rent and percentage rent because the latter payments "are so inextricably entwined and enmeshed in the agreement to pay rent that they cannot be separated or distilled . . .." Judge Hartwell reasoned that rent is the "compensation paid for the use and occupation of real property." Recognizing that a tenant might make payments to its landlord that are not rent, Judge Hartwell found that at least under the terms of the instruments before it for construction and analysis that there has not been such a sufficient separation of the source of these funds as to warrant their classification solely as a fee for the exercise of a privilege. The right to use property cannot be separated from the property itself. We, of course, do not pass upon the question of whether the so-called concession rights can be [illegible] separated from the lease of the property itself. Suffice it to say that under the facts as herein presented, the Court is of the opinion that all payments made to the City of West Palm Beach under the agreement before the Court constitute payment of rent and are therefore subject to the tax specified in Section 212.031, Florida Statutes. In Avis Rent-A-Car System, Inc. v. Askew, Case No. 74- 338, Second Judicial Circuit, decided January 20, 1977, Judge Hartwell decided whether certain payments made by Avis were taxable under Section 212.031. Avis had "entered into various contracts for a concession or license to do business at various airports and for the rental of real property," as well as contracts with private individuals for the rental of real property to conduct business at nonairport locations. Judge Hartwell divided the contracts of Avis into three categories. The first type of contract was for the payment of rental for the use real property. The second type of contract was for the payment of a concession fee for the right to do business on the premises and for the payment of a sum explicitly identified as rent for the use of real property. The third type of contract was for the payment of a concession fee for the right to do business on the premises and for the use of real property without a sum explicitly identified as rent. Judge Hartwell concluded that all payments for the rights conveyed by the first type of contract were taxable under Section 212.031. He ruled that the payments for the right to rent real property under the second type of contract were taxable, but the payments for the remaining rights were not. Declining to aggregate payments as he had in Quick and Havey two years earlier, Judge Hartwell ruled that the payments for the rights conveyed by the third type of contract required a "reasonable allocation." The allocation was between the payments for the use of real property, which were taxed, and the remaining payments, which were not. Judge Hartwell ordered that the allocation should be based on rental rates charged for the right of occupancy of the real property charged other tenants for comparable space. In a per curiam decision not yet final, the Fifth District Court of Appeal recently considered the taxation of concession fees in Lloyd Enterprises, Inc. v. Department of Revenue, 20 Fla. Law Weekly D552 (March 3, 1995). The findings of fact and conclusions of law in this final order do not rely upon Lloyd Enterprises, which is discussed merely as supplemental material. In Lloyd Enterprises, the taxpayer entered into a concession agreement with Volusia County for the rental of motorcycles at the beach. A fixed- location concessionaire, the taxpayer had the right to park its vehicles within 100 feet in either direction of its assigned spot during its assigned operating hours. Other concessionaires were allowed to roam the beach, but beach rangers would enforce the taxpayer's exclusive right to sell goods within its 200-foot territory if the free- roaming concessionaires parked or tried to sell goods in this territory. Rejecting Respondent's interpretation of its own rules, the court considered the language of the agreement, as well as a county ordinance incorporated by the agreement. The court held that neither document created a lease or license for the use of real property. Rather, they reflected the County's concern with the image that activities on the beach projected to visitors. The documents evidenced the County's intent to enhance the public's enjoyment of the beach through the provision of goods and services, as well as to raise revenue, mostly to defray cleanup costs at the beach. Thus, under the documents, the payments were nontaxable concession fees. Agency Interpretations Interpretations of Law Prior to Proposed Rule Amendments By letter dated May 14, 1968, Mr. J. Ed Straughn, Executive Director of Respondent, advised Mr. Wilbur Jones that tax is due on the space rented to car rental companies in any airport building. If the agreement makes no allocation between rental and nonrent payments, Respondent would require a "reasonable allocation" between rent and other payments with the tax due only on the amount paid for the right of occupancy. Mr. Straughn suggested that the rent component be estimated by the use of comparable rental rates for space elsewhere in the building. By letter dated August 14, 1985, Mr. Hugh Stephens, a Technical Assistant for Respondent, advised Mr. Victor Bacigalupi that a contract between an advertising company and Dade County, concerning advertising at Miami International Airport, did not involve the rental of real property. Mr. Stephens evidently relied on the nonexclusive right of posting advertising displays and the right of Dade County to require the advertiser to relocate or remove displays. By memorandum dated October 28, 1986, Mr. William D. Townsend, General Counsel, proposed policy for the taxation of licenses. Consistent with the Straughn letter 18 years earlier, the memorandum, which is directed to Mr. Randy Miller, Executive Director, states: A license in real property can be defined as a personal, revocable, and unassignable privilege, conferred either by writing or orally, to do one or more acts on land without possessing any interest in the land. Every license to do an act on land involves the occupation of the land by the licensee so far as it is necessary to do the act. Example: A concessionaire pays for permission (a license) to sell hot dogs in the building of a wrestling arena. The concessionaire has no possessory interest in the building. He normally has no specifically or legally described area which is his. He is allowed simply to vend his hot dogs in the building. Perhaps he delivers and vends in the stands. Without special permission, he cannot assign his license and it is normally revocable by the licensor unless specifically agreed otherwise. . . . For purposes of F.S. 212.031, however, the Department of Revenue (DOR) takes the position that either a lease or license is present in any business arrangement in which one or more owners, lessors, sublessors, or other persons holding a possessory interest in real property, permits a third party to use such real property for authorized acts unless all of the facts and circumstances surrounding the agreement between the parties conclusively indicate that the agreement is neither a lease nor a license. The form in which the transaction is cast is not controlling. Accordingly, some portion of the consideration paid for an agreement that in form is a joint venture, profits interest, management agreement, franchise, manufacturer's discount, bailment or other arrange- ment will be presumed by the DOR to be allocable to a lease or license if the arrangement involves the use of real property to perform authorized acts by the lessee or licensee. If the terms of the agree- ment are silent with respect to the portion of the consideration allocable to the inherent lease or license or if the consideration allocated under the terms of the agreement is less than its fair market value, the DOR will allocate to the lease or license a portion of the consideration that is equal to the fair market value of the lease or license. Contrary to the Straughn letter and Townsend memorandum eight months earlier, Technical Assistance Advisement 87A-011 dated July 2, 1987, which was prepared by Mr. Melton H. McKown, advised the Hillsborough County Aviation Authority that the privilege fees paid by car rental companies to the aviation authority were taxable. The agreement between the parties stated that the fees were "for the concession privileges granted hereunder, and in addition to the charges paid for the Premises .. ., [the car rental company] shall pay a privilege fee " Two months later, Temporary Technical Assistance Advisement TTAA 87(AER)-225 reversed TAA 87A-011. In TTAA 87(AER)-225, which is dated September 10, 1987, Ceneral Counsel William Townsend informed Mr. Samuel J. Dubbin that the payments made to airport authorities from concessionaires are "not for the right to use real property, but are for the right to engage in business at the airport." The letter relies upon Avis Rent-A- Car Systems, Inc. v. Askew. Respondent confirmed TTAA 87(AER)-225 in TTAA 88(AER)- 198, which is dated March 24, 1988, and in a letter dated April 6, 1989, from Mr. Robert M. Parsons, Technical Assistant, to Mr. Thomas P. Abbott. The April 6 letter confirms that payments from on- airport rental car companies are taxed only to the extent that the payments represent rent for space on airport property and not to the extent that the payments represent consideration for the privilege to do business. The April 6 letter adds that the payments from off-airport car rental companies for the right to pick up customers at the airport are not taxable because such payments are merely consideration for the privilege to engage in business. The April 6 letter discusses fees paid by other airport concessionaires. Acknowledging the recent enactment of the statutory exemption for license payments made to airports by food and drink concessionaires, the letter notes that, after July 1, 1987 (the effective date of the statutory changes), such payments, even if calculated as percentages of sales, are not taxable because such payments are construed as payments for a mere privilege or license to engage in business. The April 6 letter evidently marks the first time that, in a single document, Respondent inconsistently treats car rental company concession fees and all other concession fees. The April 6 letter adopts the Straughn/Townsend approach when it states that percentage rent is not taxable because it is payment for the privilege to do business. (The letter actually states "privilege or license" to do business, and this alternative use of "license," not involving the use or occupancy of real property, may have caused part of the confusion.) But the assurance of nontaxability of concession fees in the April 6 letter is limited to the period after July 1, 1987. Consistent with the McKown approach, the letter relies on the relatively recent statutory exemption for license payments from airport retail concessionaires. Consistent with the McKown approach, the letter later adds that percentage rent was taxable after the legislature amended Section 212.031 to tax payments for a license to use real property. The April 6 letter concludes erroneously that it is treating all airport concessionaires like on-airport car rental companies. In a Notice of Decision dated July 28, 1992, Respondent addressed the taxation of payments to airport authorities from car rental companies. Under a concession agreement, the airport charged a car rental company a fixed rent for occupied airport space, such as for parking, check-in, and service. Under the same agreement, the airport also charges the car rental company the greater of a guaranteed minimum or percentage of gross revenues. Taking the Straughn/Townsend approach, the Notice of Decision reversed a tentative assessment and held that the additional payments were not taxable. The July 28, 1992 Notice of Decision also addresses the taxation of percentage payments to airport authorities from other concessionaires. Explicitly endorsing the inconsistency of the April 6 letter, Respondent determined that percentage payments from concessionaires other than rental car companies were taxable either as leases or, since July 1, 1986, as licenses. The only explanation offered for the inconsistent treatment of concessionaires is that TTAA 87(AER)-225 applies only to rental car companies. Two years later, as reflected in a March 3, 1994 internal memorandum from Ms. Nydia Men,ndez to two Miami auditors, Respondent continued to perpetuate its inconsistent policy of taxing all payments for the privilege of engaging in business at airports, except for such payments from rental car companies. Returning to advertising, the July 28, 1992, Notice of Decision also states that the payments from the advertiser addressed in the letter dated August 14, 1985, have been taxable, as payments for a license, since July 1, 1986. This conclusion represents the correct treatment of licenses, as another means of granting a right to use or occupy real property. This treatment contrasts with the apparent misinterpretation in the April 6 letter that taxable licenses include grants of privileges to do business. In an early attempt to revisit the tax treatment of payments for concessions, franchises, and other privileges to do business, especially at airports, Respondent evidently chose the Quick and Havey and McKown approach that such business payments are taxable, at least when they are combined with taxable payments for the use or occupancy of real property. By memorandum dated January 14, 1993, from Assistant General Counsel Jeff Kielbasa to Ms. Lorraine Yoemans, Legislative Affairs Director, Mr. Kielbasa explained the purpose of unidentified proposed rule amendments addressing the same issues addressed by the subject proposed rule amendments. He wrote: The proposed rule amendment attempts to level the field by recognizing that any charge for the right, privilege, or license to do business at an airport is fundamentally a charge for the privilege to use or occupy land. If an airport business refuses to pay the fee, the airport's remedy is to have the business removed as a trespasser. It should be pointed out that we are not concerned with true business licenses or privilege fees attendant to use of trademarks, franchises and the like. These are licenses or privilege fees unrelated to the use of real property. The proposed rule does not differentiate between businesses such as on-airport car rental companies (with counterspaces) and off-airport car rental companies. The fee (however characterized) charged by the airport for the privilege to use or occupy the airport for business purposes is subject to the section 212.031 sales tax. See section 212.02(10)(i) defining license with reference to the use of real property as the "privilege to use or occupy a building or parcel of real property for any purpose." We believe that separation of a payment by characterizing one portion as a lease or license of realty (whether site specific or not) and another for the privilege of conducting business on the premises is artificial. It would be just as easy for the property owner on the corner of College and Monroe to charge a business tenant the average commercial square footage rental in Leon County for the lease and require the tenant to pay the premium attributable to the location at College and Monroe as a separate charge in the form of a license to do business. However carved up and characterized, under the statute each charge would be taxable since both leases and licenses to use real property are taxable. Interpretations of Proposed Rule Amendments On April 14, 1994, Respondent conducted a workshop on the proposed rule amendments prior to the modification published June 10, 1994. Respondent's representatives were understandably reluctant to opine on questions of law without detailed facts. However, explaining the tax consequences of payments from a concessionaire to an airport, Assistant General Counsel Kielbasa stated: I think the notion that there is a separate privilege fee that an airport charges unrelated to the fact that the privilege is being granted to function at the airport, I don't think that's what's happening. I think it's a very simple case, and I think it's very clear. But there may be separate provisions in contracts or lease agreements which have nothing to do with operating at that location, and to that extent, I don't think it would be subject to tax at all under the statute, and that's what we're trying to get at. Respondent's Exhibit 1A, pages 33-34. A major element of the dispute between Respondent and Petitioners and Intervenors (collectively, Petitioners) concerned Respondent's choice to take the Quick and Havey and McKown approach over the Avis and Straughn/Townsend approach in taxing mixed payments for the use of real property and for business intangibles. Following the rule workshop, Respondent made some Avis and Straughn/Townsend changes to the proposed rules, but the changes did not preclude a Quick and Havey and McKown approach, as evidenced by the following statement in the Prehearing Stipulation: "The Department contends that where the amount paid for a privilege fee is so intertwined or meshed with a payment for a license or lease to use real property that it cannot be separated, the full amount is taxable." Airports and Concessions Governmental entities operate and typically own large commercial airports, such as those in Orlando, Miami, and Tampa. By law, these airport authorities are empowered to enter into contracts with third parties to supply persons using airports with goods and services, such as food and beverage, retail sales, and car rentals. In some cases, airport authorities may obtain services by management agreements, which are not subject to sales tax. In most cases, though, airport authorities obtain goods and services for airport visitors by leases and grants of concessions, franchises, or other privileges to do business. The Dictionary of Real Estate Appraisal defines "concession" as "a franchise for the right to conduct a business, granted by a government body or authority." The Dictionary of Real Estate Appraisal defines "franchise" as "a privilege or right that is conferred by grant to an individual or group of individuals; usually an exclusive right to furnish public services or to sell a particular product in a certain community." By what are normally labelled "concession" or "franchise" agreements, airport authorities permit a concessionaire to operate a business with some nexus to the airport or at least its passengers, in return for which the concessionaire pays money to the airport authority. The nexus to the airport may take various forms. Some concessionaires sell food or drink or retail merchandise at exclusively assigned locations within the airport terminal. Hotel concessionaires operate hotels at fixed locations in the terminal. Some concessionaires, like taxi companies and nonairport hotels, pick up and drop off passengers at the airport terminal in areas designated for such purpose, but not reserved exclusively for any one concessionaire. An on-airport car rental concessionaire rents cars at the airport, using fixed counter space, parking areas, car service areas, and car pick-up and drop-off areas. A variation of the car rental concession is the off- airport car rental concessionaire, which has no fixed space at the airport except for customer pick-up and drop-off areas and usually counter space. In Florida, all off-airport rental car companies use their own vans to pick-up and drop-off customers. At some airports outside Florida, such as Sacramento, Dallas, and Minneapolis, the airport authorities operate their own vans to pick up and drop off customers of off-airport rental car companies. In such cases, the off-airport rental car companies do not directly use or occupy any of the real property of the airport. In general, the payments from the concessionaires to the airport authorities consist of two categories. First, there is a fixed payment, which the concession agreement typically characterizes as consideration for the use and occupancy of real property. The airport authority normally bases this rental payment on the fair market value of the space leased, as estimated by a licensed real estate appraiser, or under a cost-based formula. Second, there is a payment representing a percentage of the gross revenue of the concessionaire derived from airport business. The concession agreement typically characterizes this payment as consideration for the privilege to do business with airport passengers. Rents typically exceed $50 per square foot per year. Most, but not all concessionaires, make total payments of considerably more that $50 per square foot per year, often totalling hundreds and sometimes thousands of dollars. In entering into concession agreements, airport authorities pursue a variety of goals. They must produce high revenues because airport authorities do not operate on public subsidies, aside from the monopoly grant of the airport operation itself. But high returns from concessionaires are not the only goal. Airport authorities must serve airport visitors in order to maintain successful relations with the airlines. And airport visitors demand a mix of goods and services at acceptable prices and quality. In selecting concessionaires and pricing concession fees, airport authorities therefore balance maximizing revenues with serving visitors' needs. Airport authorities price concession fees based on the type of goods and services offered by the concessionaire. A bank at one major Florida airport pays six times the concession fees of a travel agency, which occupies space of equal size next to the bank. At the same airport, one theme-park retailer pays concession fees of more than three times what another theme-park retailer pays for the identical space. In the typical concession arrangement, the airport authority receives payments consisting of rent and "something else." The rent is attributable to the use and occupancy of real property. The "something else" is business income, which is attributable to an intangible business asset, such as a franchise, concession, or privilege to do business. Like any other lessor, airport authorities undertake, in their concession agreements, to provide their lessees with offices or retail space for their use and occupancy. Unlike other lessors, however, airport authorities also undertake, in their concession agreements, to provide nearly all of the concessionaire's customers through operating agreements with airlines. Through concession agreements, airport authorities allow concessionaires to share in the authority's most valuable asset, which is not the real property comprising the airport, but the exclusive, governmental franchise to operate the airport. In these regards, airport authorities are in very similar roles to the county in Lloyd Enterprises with the subjects of the government monopoly being in one case a beach and another an airport. Both governmental "owner/operators" provide customers for their respective concessionaires and predicate their agreements upon the ability of the contracting party to supply the needs of the customers in a manner that does not compromise the public asset--i.e., an airport or a beach. These elements are not typical of a lessor or licensor. To varying, lesser degrees, airport authorities also distinguish themselves from mere lessors through the marketing, management, working capital, and workforce that characterize the airport operation. Respondent's key witness identified four factors useful in determining whether a payment is for the use or occupancy of real property: the relationship of the parties to the real property, the use to be made of the real property, the rights granted the parties under the agreement, and the basis for the payment or charge for the real property. These four factors assist in the determination whether a payment is for the use or occupancy of real property. But the usefulness of the four factors is limited because they do not directly address the other possible component of a mixed payment, which is a payment for a franchise, concession, or other privilege to do business. It is easy to determine that concessionaire payments typically comprise rent or some other payment for the use and occupancy of real property plus a payment for an intangible, such as the privilege to do business with airport users. Obviously, Respondent is not required to accept the parties' labelling or allocations of these payments. But it is difficult to determine how much of a mixed payment is for the use or occupancy of real property, which is taxable (ignoring, as always, the special treatment of certain airport license payments, as well as other exemptions), and how much is for a privilege to do business, which is nontaxable. The issue is whether a "reasonable allocation" is possible between the two components in a mixed payment. As ordered in Avis and suggested by the Straughn letter and Townsend memorandum, the allocation process should begin with finding a fair rental value. It is difficult to estimate the fair market rent for space in a large commercial airport. The universe of comparables is small due to the uniqueness of major airports. But the appraisal of airport real property is not impossible. Nonairport comparables normally exist that, with suitable adjustments, yield reasonable approximations of fair market rentals. A real estate appraisal helps determine how much of a concessionaire's payment should be characterized as rent. However, the allocation problem can be approached at the same time from the opposite end. In appraising business assets, an accountant or business appraiser estimates the value of the concession, franchise, or other privilege to do business with airport visitors. The business-income approach to the allocation problem is aided by analysis of the payments made by completely off- airport car rental concessionaires in Sacramento, Minneapolis, and Dallas. These payments provide a rough approximation of the value of this intangible, even though they probably require major adjustments to reflect, among other things, differing passenger counts and demographics, as well as the costs incurred by the airport authorities in providing transportation to the off- airport sites. Based on the foregoing, the record demonstrates that: a) the payments of a concessionaire to an airport authority ordinarily consist in part of rent or license payments and in part of payments for an intangible, such as a franchise, concession, or other privilege to do business and b) these payments may be allocated, with reasonable precision, between the real property and business components. The Proposed Rules Proposed Rule 12A-1.070(4)(a)2 and (b) Rule 12A-1.070(4)(a)1. is not materially changed by the proposed rule amendments. Consistent with the statute, this paragraph of the rule merely imposes the sales tax in taxable transactions on the person actually occupying, using, or entitled to use the real property and requires that such person pay its immediate landlord or grantor. The next subparagraph is new. Proposed Rule 12A- 1.070(4)(a)2 contains two introductory sentences followed by three examples and a notice. The first sentence of Proposed Rule 12A-1.070(4)(a)2 fairly interprets the statute. The first sentence states that the sales tax is due on payments made to lessors or licensors when the payment is for the use of the real property and is based on the ownership or control of the real property by the lessor or licensor. By limiting the tax to those payments based on the payee's interest in the real property, the proposed rule ensures that the tax is imposed only on the portion of the payment attributable to the use or occupancy of real estate. The first sentence is unobjectionable. The second sentence of Proposed Rule 12A-1.070(4)(a)2 is no more controversial. This sentence provides that the "total payment for the use of real property" is taxable, even though the payment or part of the payment "may be identified" as payment for a privilege to do business. The use of "may be identified" in the "even though" clause refers to the label given such payments by the parties. The second sentence of Proposed Rule 12A-1.070(4)(a)2 merely provides that the taxable consequence of the transaction is not governed by the label given the payments by the parties. In other words, just because the parties use "concession fee," "privilege fee," "percentage fee," or "similar terms" does not necessarily make them payments for the privilege to do business. The second sentence assures that Respondent will not be deterred by mere labels from its lawful responsibility to characterize properly the nature of the payments, and make reasonable allocations when allocations are indicated. The three examples under Proposed Rule 12A-1.070(4)(a)2 are neither illustrative nor useful. To the contrary, they are vague and misleading and appear to reveal a misunderstanding of the proper taxation of mixed payments consisting of rent and payments for a privilege to do business. The first example is Proposed Rule 12A-1.070(4)(a)2.a. A clothing retailer occupies a location in a shopping mall. The retailer pays the mall owner minimum rent plus a percentage of gross sales. The agreement characterizes the minimum rent as consideration for the lease of designated space and the percentage of sales as consideration for the privilege to do business in the mall. The failure to pay either amount is grounds for termination of the agreement. The proposed rule concludes: "The total amount required under the agreement is subject to tax, regardless of how the consideration, or a portion thereof, is characterized." In fact, both payments made by the retailer to the mall owner may constitute taxable payments for the use of real property. Supplying little useful information as to how to determine the true character of payments, the proposed example ignores all of the important factors necessary in making this determination. The proposed example overrides the characterization of the payments by the parties. As discussed above, the parties' labelling of a payment may be tax-motivated, but it may also reveal their true intent. However, the proposed example offers insufficient explanation why it ignores the label of "privilege to do business" at the mall. The only possible grounds for ignoring the label are that the retailer occupies a location inside a mall under which it pays minimum rent and percentage rent and a default in the payment of either amount is grounds for terminating the agreement. The first basis is only that the payments are mixed and, except under the most strained reading of Quick and Havey, cannot, without more, possibly be considered justification for taxing the total payments. The key factor in the first proposed example is thus the presence of a cross-default clause. Such a clause may play a role in distinguishing between payments for the use of real property and other types of payments. In certain cases, the total amount actually being paid for the use of the real property may include all payments that must be paid in order for the agreement to remain in good standing. This would likely be true of base rent and additional rent, consisting of a lessee's prorata share of insurance, taxes, maintenance, and utilities. However, there is nothing in the record to suggest that a cross- default clause is of such importance as to confer upon it the status that it is given in the rule example. Nothing in the record supports the assertion that all cross-defaulted payments are therefore payments for the use or occupancy of real property. For instance, Respondent concedes that a lessee/payor might be obligated under a lease to make taxable payments of rent and nontaxable payments of promotional fees, such as for the use of logos or other intangibles. It is conceivable that a prudent (and powerful) lessor/payee might provide in the agreement, even if called a "lease agreement," that a default in either payment is grounds for terminating the agreement. Even so, the mere existence of such a cross-default clause does not, without more, transform the promotional fee into rent. The proper characterization of the two payments under the first proposed example requires consideration of, among other things, the four factors identified by Respondent's key witness: the relationship of the parties to the real property, the use to be made of the real property, the rights granted the parties under the agreement, and the basis for the payment or charge for the real property. The proper characterization requires consideration, in some fashion, of the elements that distinguish a real property asset from a business asset, such as any contributions by the mall owner in the form of operating agreements, other leases, marketing, management, working capital, and workforce, as well as the method by which the mall owner decides with whom it will enter into agreements and the total payments that it will require. The second example is Proposed Rule 12A-1.070(4)(a)2.b. A push cart vendor pays a mall owner minimum rent plus a percentage of gross sales for the right to sell merchandise at various locations within the common area of the mall. The mall owner may terminate the agreement if the vendor fails to make either payment. The example concludes that both payments are taxable "because the statute defines a taxable license as the granting of a privilege to use real property for any purpose, including the privilege to use real property to do business." The only difference in the first two examples is that the second involves a license and the first involves a lease. Like the example of the mall retailer, the example of the push cart vendor elevates the cross-default provision to outcome-determinative status. Again, the record does not support such reliance upon this factor for the above-discussed reasons. The third example is Proposed Rule 12A-1.070(4)(a)2.c. A car rental company pays an airport authority for designated office and counter space in the terminal. The agreement identifies a payment as rent for the use of real property. The agreement also identifies a payment, representing a percentage of gross sales, as a privilege fee for the right to engage in business at the airport. Failure to make either payment is grounds for terminating the agreement. The example concludes that the "total amount required under the agreement is subject to tax." As with the preceding examples, the example of the airport car rental company relies upon a cross-default clause to characterize all payments as for the use of real property. Again, for the reasons stated above, the record does not support such reliance upon this single factor. The three examples make no "reasonable allocation" between the real property and business components of what are probably mixed payments. Best revealed by the last sentence of the second example, the examples illegitimately transform business payments into real property payments simply because the business payor uses or occupies real property to conduct its business. In reality, the three examples seek to find their way back to the haven of Quick and Havey by equating cross-default clauses with inextricable intertwining and enmeshment. It is only conjecture whether a court would today so readily abandon an attempt to allocate between real property and business income. In any event, the present record demonstrates that "reasonable allocations" are achievable and require consideration of much more than cross- default clauses. Respondent's defense of the examples is inadequate. Respondent argues that the examples are modified by the language of Proposed Rule 12A- 1.070(4)(a)2. As previously stated, the two sentences of Proposed Rule 12A- 1.070(4)(a)2 represent a fair restatement of the statutory taxing criteria. But the role of the two examples is to illustrate the application of Proposed Rule 12A-1.070(4)(a)2, not provide a circular restatement of the rule and, thus, the statute. Given their language, the proposed examples stand alone and cannot be saved by the implicit incorporation of the first two sentences of Proposed Rule 12A- 1.070(4)(a)2. Standing alone, the illustrations are erroneous in their reliance on cross-default clauses, misleading in their omission of material factors required for any reasonable allocation, and misguided in their implicit bias against making allocations between payments for real property and business components. Respondent claims that the examples create presumptions that a taxpayer may rebut. This claim is dubious on two counts. First, Respondent's key witnesses disagreed on whether the presumptions created by the examples were indeed rebuttable. One witness testified clearly that, if a nonexempt transaction fit one of the examples, then the transaction was taxable. Nothing in the examples suggests that these presumptions are rebuttable. But the examples do not work even if they establish only rebuttable presumptions. The cross-default provision cannot bear the burden even of creating a rebuttable presumption. A cross-default provision is simply not that important to the proper characterization of the payments, especially in light of far more important factors. Proposed Rule 12A-1.070(4)(a)d warns taxpayers that all past declarations, including technical assistance advisements, that "advised that fees . . . identified as privilege fees to engage in business were exempt, and . . . are inconsistent with this rule" are rescinded. Proposed Rule 12A- 1.070(4)(a)d concludes: "Therefore, such privilege fees are taxable payments for a lease of license to use real property for business purposes." Respondent's key witness could not identify with certainty the past declarations rescinded by Proposed Rule 12A-1.070(4)(a)d or the past declarations left unaffected. This leave the proposed rule unnecessarily vague, at least as to airport authorities. There are a limited number of airport authorities and concessionaires that could be relying on past declarations and, if there are any besides those uncovered in this proceeding, they should be easily found. Proposed Rule 12A-1.070(4)(b) identifies as a taxable license to use real property the "full consideration paid for the license to use airport real property for the purpose of picking- up or dropping-off passengers and baggage from airport sidewalks, landings, and other facilities" by any provider of ground transportation services, regardless whether the provider "enters the airport terminal building while . . . providing such service." The full payment for the real property component is taxable, and Proposed Rule 12A-1.070(4)(b) accurately interprets the statutes. However, Respondent again encounters problems in the three examples that follow Proposed Rule 12A-1.070(4)(b). In Proposed Rule 12A-1.070(4)(b)1, a hotel pays a fee to an airport authority for the privilege of coming onto airport property to pick up and drop off hotel guests at the terminal. The example states that the payment is taxable because it is for a license to use airport real property. The second and third examples are identical except they involve a taxicab and limousine company and an off-site car rental company. Proposed Rule 12A-1.070(4)(b) states the obvious-- i.e., that whatever the payor pays for the right to use or occupy real property is subject to sales tax. Proposed Rule 12A- 1.070(4)(b) does not require the characterization of all payments between such parties as taxable payments for the use or occupancy of real property. The problem with the proposed examples is that they depart from the real-property language of Proposed Rule 12A- 1.070(4)(b) and use the business language of a privilege to do business. The first example baldly provides that a fee paid by a hotel to an airport for the "privilege" to enter airport property and pick up and drop off hotel guests is a license to use airport property and is taxable. There is no mention of allocation or of the factors that would go into a reasonable allocation. The fee is taxable. The language and paucity of reasoning are practically identical for the second and third examples. Respondent argues that Proposed Rule 12A-1.070(4)(b) must be read in connection with the language of Proposed Rule 12A-1.070(4)(a)2, which restates the statutory language. This argument fails for two reasons. Like the examples under Proposed Rule 12A-1.070(4)(a)2, Proposed Rule 12A-1.070(4)(b) does not incorporate by reference the language of Proposed Rule 12A-1.070(4)(a)2. Respondent's argument of implicit incorporation is even weaker here because Proposed Rule 12A-1.070(4)(b) is not even a subparagraph of Proposed Rule 12A- 1.070(4)(a)2. The first set of proposed examples at least mentions a cross-default clause, which could have some bearing on the proper characterization of the payments, even though the omission of far more important factors invalidates the first set of examples. The second set of proposed examples fails even to mention a single factor. If the hotel, taxi cab company, or rental car company pays for the privilege of entering airport property to do business, the entire payment is taxable. Proposed Rule 12A-1.070(1)(a)6.b and c Proposed Rule 12A-1.070(1)(a)6.b provides that property "used by an airline exclusively for loading or unloading passengers onto or from an aircraft is exempt." The proposed rule identifies examples of such property as common terminal walkways used by passengers for boarding or exiting planes, ticket counters, baggage claim areas, ramp and apron areas, and departure lounges (but distinguished from VIP lounges or clubs that require a membership not determined by ticket status). Proposed Rule 12A-1.070(1)(a)6.c adds that "[r]eal property used by an airline for purposes of loading or unloading passengers or property . . . which is exempt from tax includes ... office areas used to process tickets, baggage processing areas, operations areas used for the purpose of the operational control of an airline's aircraft, and air cargo areas." Petitioners object to the use of "exclusively" in subparagraph b. The statute provides an exemption for property used exclusively for aircraft landing or taxiing or property used by an airline for loading or unloading persons or property or for fueling. Clearly, due to the repetition of "property used" in the second clause, the modifier "exclusively" applies only to the first clause, which is consistent with the doctrine of the nearest antecedent argued in Petitioner's proposed final order. It is unclear how Proposed Rule 12A-1.070(1)(a)6.b and c work together because they seem to define the same exempt property under different subparagraphs. Both subparagraphs apply to real property, and both seem to describe the same examples of real property, using different words. The subparagraphs under subparagraph b present reasonable rules for determining what is real property based on ownership of the underlying land, with a special rule when the airport authority leases, but does not own, the land on which the airport is situated. The subparagraphs under subparagraph c identify a prorating process, which applies when the property is used for both exempt and nonexempt purposes. It is unclear how property could be used for exempt and nonexempt purposes under the requirement of "exclusive" use in subparagraph b, although such mixed uses is contemplated by subparagraph c. The requirement contained in the first sentence of Proposed Rule 12A- 1.070(1)(a)6.b that the property be used exclusively for loading or unloading passengers conflicts with the language of Proposed Rule 12A-1.070(1)(a)6.c, as well as the language of Rule 12A-1.070(1)(a)6.a; neither of the latter two provisions predicates the exemption upon exclusivity of use. More importantly, the first sentence of Proposed Rule 12A- 1.070(1)(a)6.b conflicts with the relevant statutes. However, the remainder of Proposed Rule 12A- 1.070(1)(a)6.b, including subparagraphs (I) and (II), is a reasonable interpretation of the relevant statutes, as is Proposed Rule 12A-1.070(1)(a)6.c, including subparagraphs (I) and (II). Petitioners argue that Respondent intends to tax nonairline concessionaires for their use of property used for loading or unloading persons or property. This argument is unclear, perhaps because the unobjectionable proposed rules do not require such an application. Proposed Rule 12A-1.070(1)(b)3 Proposed Rule 12A-1.070(1)(b)3 defines "retail concessionaire" as either a lessee or licensee that makes sales directly to the public within an airport. The words "retail concessionaire" are not used elsewhere in the rule or proposed rules at issue except in Rule 12A-1.070(1)(b)1 and 2, which addresses "a person providing retail concessionaire services" involving the sale of food or drink or other tangible personal property in an airport. Subparagraph 1 imposes tax on rent paid by such persons, and subparagraph 2 exempts from tax any license payments made by such persons. Petitioners' arguments against the definitional proposed rule are misplaced. The definition covers lessees and licensees, but does not impose any tax. In conjunction with subparagraphs 1 and 2, the proposed definition of "retail concessionaire" says, in effect, that all lessees and licensees selling food and drink or other personal property are subject to tax on payments for the rental of associated real property, but are not subject to tax on payments for the licensing of associated real property. The subparagraphs that carry tax consequences honor the legislative directives as to taxability.
The Issue Whether the Petitioner, H.A.P. Partnership, has demonstrated that development rights in certain real property it owns have vested against the provisions of the 2010 Comprehensive Plan?
Findings Of Fact The Property at Issue. The Petitioner, H.A.P. is a general partnership. The partners of the Petitioner are Billy G. and Jeanette Smith, Earl and Marie Womble, Mr. W. H. Sharp, Larry and Hilda Strom and Charles and Margaret Fulton. The Petitioner's address is 5174 Maddox Road, Tallahassee, Florida. In May, 1985, the Petitioner purchased approximately 3.1 acres of land, Tax Identification No. 21-04-20-409 (hereinafter referred to as "Parcel 1"). Parcel 1 is located at 4015 North Monroe Street, Leon County, Florida. At the time of purchase by the Petitioner, Parcel 1 was zoned R-3, single and two-family residential. Under R-3 zoning, a maximum of 7.2 units per acre of land could be constructed. Parcel 1 was purchased by the Petitioner from Billy Hatcher. In December, 1986, the Petitioner purchased an adjoining parcel of property consisting of approximately 3.5 acres, Tax Identification No. 21-04-20- 408 (hereinafter referred to as "Parcel 2"). Parcel 2 is located at 3969 North Monroe Street, Leon County, Florida. Parcel 2 was zoned R-3 at the time of its purchase by the Petitioner. Parcel 2 was purchased by the Petitioner from Marie Bannerman. Development of the Property; Prior to the Petitioner's Purchase. The previous owner of Parcel 1, Billy Hatcher, had retained Poole Engineering to develop plans for site location on Parcel 1, of multi-family dwellings. A stormwater management permit, number 4241, was issued by Leon County to Mr. Hatcher on June 25, 1984. Mr. Hatcher also obtained a permit from the State of Florida Department of Transportation for a driveway onto Parcel 1 from North Monroe Street. The permit was approved June 12, 1984. No permits were obtained from Leon County or any other entity for Parcel 2 prior to the Petitioner's purchase of Parcel 2. The Petitioner relied upon the zoning on Parcel 1 and 2 and the permits that had been issued with regard to Parcel 1 at the time that the Petitioner purchased Parcel 1 and Parcel 2. Parcel 1 and 2 would not have been purchased otherwise. Development of the Property; Subsequent to the Petitioner's Purchase. In November, 1987, the Petitioner retained PVC Corporation to plan the development of Parcel 1 and Parcel 2 (hereinafter referred to as the "Property"), and to provide project management services for the development of multi-family residences on the Property. Consistent with R-3 zoning, PVC Corporation proposed a development consisting of 42 units on the 6.6 acres of the Property. In the Summer of 1989, the Petitioner sought a change in zoning for the Property. The Petitioner's request to have the Property zoned commercial was denied by Leon County. No permits were obtained from Leon County or any other entity for the Property subsequent to the Petitioner's purchase of the Property. Except for the stormwater management permit, no other permits were obtained from Leon County by the Petitioner and no request for building permits, plots or site plans were submitted to Leon County. Development of the Property was not commenced by the Petitioner. Alleged Change in Position or Obligations and Expenses Incurred. The total purchase price for Parcel 1 was $156,000.00. The total purchase price for Parcel 2 was $110,000.00. The Petitioner paid a total of $106,572.87 in interest on the Property, $15,109.67 in real property taxes and $2,300.00 in engineering fees. Vadden Shadden, M.A.I., appraised the Property on January 18, 1988, prior to the effective date of the 2010 Comprehensive Plan, at a value of $417,500.00. On November 3, 1990, Mr. Shadden appraised to value of the Property to be $41,750.00, taking into account compliance with the 2010 Comprehensive Plan. Development of the Property under the 2010 Plan. Under the 2010 Comprehensive Plan, the Property is located in an area designated as Lake Protection Land Use. Property in the Lake Protection Land Use category may be developed by the construction of one dwelling unit for residential purposes per two acres, plus minor commercial uses (retail but not office uses) of up to 20,000 gross square feet. Site plan approval for all commercial property over five acres is required by the Leon County Subdivision Regulations. Procedure. On or about November 12, 1990, the Petitioner filed an Application for Vested Rights Determination (hereinafter referred to as the "Application"), with Leon County. By letter dated February 26, 1991, from Mark Gumula, Director of Planning of the Tallahassee-Leon County Planning Department, the Petitioner was informed that the staff of the Tallahassee-Leon County Planning Department had recommended that the Application be denied. Mr. Gumula also informed the Petitioner that a hearing before a Staff Committee could be requested. Charles Fulton, general partner of the Petitioner, informed Leon County that the Petitioner waived its right to a hearing before the Staff Committee and requested a formal hearing before a Hearing Officer. By letter dated March 19, 1991, the Division of Administrative Hearings was requested to provide a Hearing Officer to conduct a formal hearing in this case.
The Issue Is it in the public interest to place Petitioners, Paradies Shops, Inc. and Paradies Midfield Corporation (Paradies Shops and Paradies Midfield) on the State of Florida Convicted Vendor List maintained by Respondent State of Florida Department of Management Services (the Department)? Section 287.133, Florida Statutes (1996 Supp.).
Findings Of Fact The corporate headquarters of Paradies Shops is located at 5950 Fulton Industrial Boulevard, Atlanta, GA 30336. Paradies Shops is conducting business with several Florida public entities in the form of airport retail concession contracts. Paradies Shops owns 65 percent of Paradies Midfield. Paradies Shops owns 75 percent of Paradies-Ft. Lauderdale. Paradies-Jacksonville, Paradies-Sarasota and Paradies-Daytona Beach are all Sub-Chapter S corporations, for tax purposes; therefore, Paradies Shops does not own any stock in these three corporations. The Paradies family and Richard Dickson own, on an individual basis, 75% to 85% of the Sub- Chapter S affiliates. The remaining stock is owned by the Disadvantaged Business Enterprise (DBE) partners of Paradies Shops in these ventures. Paradies Shops and Paradies Midfield do not operate through divisions. Paradies Midfield has one subsidiary, Paradies Country Stores, Inc. All of the corporate addresses for other Paradies Companies, in addition to Paradies Shops, are at 5950 Fulton Industrial Boulevard, Atlanta, GA 30336. The subsidiaries, affiliates, limited liability companies and Florida leases of Paradies are as follows: Subsidiaries Paradies-Chicago, Inc. Paradies-Fort Lauderdale, Inc. Paradies-Hartford, Inc. Paradies-Louisville, Inc. Paradies Midfield Corporation Paradies Pugh, Inc. PAS Group, Inc. Affiliates Mercaro Gifts-TPS, Inc. Paradies-Concessions II-Arch, Inc. Paradies-Dayton, Inc. Paradies-Huntsville, Inc. Paradies-Jacksonville, Inc. Paradies-Knoxville, Inc. Paradies-LaGuardia, Inc. Paradies-Metro Ventures, Inc. Paradies-Orange Co., Inc. Paradies-Sarasota, Inc. Paradies-South, Inc. Paradies-Toronto, Inc. Paradies-Daytona Beach, Inc. Paradies-Vancouver, Inc. PGA Tour Licensing Limited Liability Companies Paradies & Associates, L.L.C. Paradies-Colorado Springs, L.L.C. Paradies-Madison, L.L.C. Paradies-Desert House, L.L.C. Paradies-Phoenix, L.L.C. Current Florida Leases Company Name Paradies Southwest Florida Intl. Lee County Port Ft. Myers, Florida Authority Paradies Palm Beach Intl. Airport Palm Beach West Palm Beach, FL County Paradies Tallahassee Regional Airport City of Tallahassee, Florida Tallahassee Paradies Orlando Intl. Airport Greater Orlando Orlando, Florida Aviation Authority Paradies Ft. Lauderdale Intl. Airport Broward County Ft. Lauderdale, Florida Paradies Jacksonville Intl. Airport Jacksonville Port Authority Paradies Sarasota/Bradenton Intl. Sarasota-Manatee Sarasota, Florida Airport Authority Paradies Daytona Beach Intl. Airport County of Volusia Daytona Beach, Florida The following constitutes the Florida business registrations for Paradies, to include the company name and the Florida registration number: Company Florida Registration # Parent Paradies, Inc. 826058 Subsidiaries Paradies-Ft. Lauderdale, Inc. M11773 Sub-S Affiliates Paradies-Jacksonville, Inc. P30174 Paradies-Sarasota, Inc. P27093 Paradies-Daytona Beach, Inc. F92000000397 Pursuant to Section 287.133, Florida Statutes (1996 Supp.), the Department is responsible for investigating and prosecuting cases involved with persons or affiliates that it has reason to believe have been convicted of a public entity crime. This responsibility is as a means to maintain a list of the names and addresses of those persons or affiliates who have been disqualified from the public contracting and purchasing process engaged in with Florida public entities subject to that statute. Daniel M. Paradies, Paradies Shops and Paradies Midfield, were charged with public entity crimes as defined within subsection 287.133(1)(g), Florida Statutes (1996 Supp). That case was tried before a jury in January, 1994 (U.S. v. Ira Jackson, et al., Case No. 1:93:CR-310, U.S. District Court for the Northern District of Georgia, Atlanta Division.) On January 22, 1994 the jury returned a verdict of guilty. On April 15, 1994, the U.S. District Court for the Northern District of Georgia, Atlanta Division, entered judgments of conviction for 83 counts of mail fraud against Daniel M. Paradies, Paradies Shops and Paradies Midfield, for violations of Sections 1341 and 1346 of Title 18, United States Code. Daniel M. Paradies was also convicted of one count of conspiracy to commit bribery in violation of Section 371 of Title 18, United States Code. These judgments and convictions of Daniel M. Paradies, Paradies Shops and Paradies Midfield constituted convictions for public entity crimes as defined within Subsections 287.133(1)(g) and 287.133(3)(e), Florida Statutes (1996 Supp.). Further information concerning the judgments of conviction may be found in Exhibits M, N, O and P to the joint stipulation of facts by the parties. The nature and details of the public entity crimes for which judgments of conviction were entered against Daniel M. Paradies, Paradies Shops and Paradies Midfield may be found in Exhibit P to the stipulation by the parties. As well, that exhibit speaks to the culpability of the persons or affiliates proposed to be placed on the Convicted Vendor List. Section 287.133(3)(e)3b. and c., Florida Statutes (1996 Supp.). On September 23, 1996, the United States Court of Appeals for the Eleventh Circuit affirmed all convictions of Daniel M. Paradies, Paradies Shops and Paradies Midfield. The Eleventh Circuit denied rehearing on December 26, 1996, but stayed its mandate pending a Petition for Writ of Certiorari in an Order entered January 22, 1997. By seeking a stay of the Eleventh Circuit's mandate, the Paradies companies announced their intention to file a Petition for Writ of Certiorari in the United States Supreme Court within thirty (30) days after the mandate had been stayed. A copy of the Eleventh Circuit order granting the motion to stay pending a Petition for Writ of Certiorari is found as Exhibit A to the fact stipulation by the parties. The Petition for Writ of Certiorari has been filed. In consideration of the requirements of Section 287.133(e)3.d, Florida Statutes (1996 Supp.), requiring consideration of "prompt or voluntary payment of any damages or penalty as a result of the conviction" for a public entity crime, no restitution was required by the final judgment in that case. A fine and special assessment against Paradies Shops were payable over a five year period, once the judgment becomes final. Because the Eleventh Circuit order stayed issuance of the mandate pending United States Supreme Court's ruling for the Petition for Writ of Certiorari to be filed by Mr. Paradies, Paradies Shops and Paradies Midfield, the fine and special assessment are not due at this time. The Paradies Shops has established a reserve for payment of the fine and that reserve is reflected in its audited balance sheet. In the event the Supreme Court denies the Petition, Paradies Shops and Paradies Midfield intend to pay the full amount of the fine and the special assessment within thirty (30) days of a final judgment. A copy of "the Paradies Shops, Inc., its Subsidiaries and its Affiliates Consolidated and Combined Financial Statements June 30, 1996 and 1995," demonstrating the availability of the funds is attached to the fact stipulation by the parties as Exhibit D. In accordance with Section 287.133(3)(e)3.e, Florida Statutes (1996 Supp), Paradies Shops and Paradies Midfield cooperated with the state and federal investigations and federal prosecution of the public entity crime consistent with their good faith exercise of constitutional, statutory or other rights during the investigation or prosecution of the public entity crime, to the extent that: Paradies Shops and Paradies Midfield at all times cooperated with the federal government with its investigation. Paradies produced tens of thousands of pages of documents and made all of its employees available for appearance before the Federal Grand Jury. In addition, several Paradies Shops' employees were called by the government to testify at trial. Paradies Shops and Paradies Midfield, fully cooperated with the Department in connection with this investigation initiated pursuant to Section 287.133, Florida Statutes, and supplied the Department with all requested documents concerning the Atlanta proceeding. In association with Section 287.133(3)(e)3.f, Florida Statutes (1996 Supp.), the following acts of "disassociation from any person or affiliates convicted of the public entity crime" have transpired: Paradies Midfield and Paradies Country Store ceased all operations on March 31, 1995. In May, 1994, Dan Paradies resigned as President and Director for Paradies Shops and is no longer employed in any capacity with any company. Mr. Paradies has placed in a blind irrevocable trust all of the stocks he owns in Paradies Shops and its affiliates (including the companies operating in Florida). Mr. Paradies does not have any control over the stock in the blind irrevocable trust and cannot vote any of that stock. In regards to his capacity within the company, Mr. Paradies has no involvement nor any control over any of the Paradies companies. He is not employed in any capacity with any of the companies nor is he an officer or director of any of the companies. Paradies Shops and Paradies Midfield were held responsible based on the ownership and control of Mr. Dan Paradies. Charges were not brought against any other officer, director or employee of Paradies. The government did charge Mack Wilbourn, a director of Paradies Midfield, but he was acquitted. In association with Section 287.133(3)(e)3.g, Florida Statutes (1996 Supp.), "prior or future self-policing by the person or affiliate to prevent public entity crimes" has been shown to the extent that: Following the convictions Paradies Shops engaged the international accounting firm of Coopers & Lybrand to review and evaluate all DBE business relationships of Paradies Shops. These reviews were completed in May of 1994, and found no evidence of any improper activities. These reviews are found as Exhibit E to the fact stipulation by the parties. Paradies Shops has adopted a Code of Business Practices that is designed to provide officers and all management of the Company a guide to the basic principles to be applied in conducting the company's business. The failure on the part of a covered employee to abide by the provision of the Code is grounds for immediate dismissal. This code also directs employees to report any suspected violations of the law or other misconduct. The Code has been read and executed by all employees in the home office in Atlanta and all managers in all locations around the country. All future new employees at the home office and new management level employees are required to read and agree to follow the Code. The Company requires all covered employees to certify, on at least an annual basis, that they have reviewed the Code and that they will continue to abide by its terms. A copy of Paradies Code of business practices, which includes a blank certification form, is Exhibit F to the fact stipulation by the parties. In accordance with Section 287.133(3)(e)3.h, Florida Statutes (1996 Supp.), consideration is given any "reinstatement or clemency in any jurisdiction in relation to the public entity crime at issue in the proceeding." To that extent: No debarment proceedings have been initiated against Paradies by any state as a result of the Atlanta conviction. Paradies has not been debarred by any state as a result of the Atlanta conviction. The fact stipulation relates that: Since the convictions, Paradies has won thirteen (13) new contracts through competitive proposals and received the extensions of fourteen (14) existing contracts. Additionally, Paradies has been awarded five (5) off-airport contracts since the conviction to include a long-term contract with the World Golf Village, currently under development south of Jacksonville, Florida, and scheduled to open March of 1998. In addition, in 1996, the PGA TOUR has extended the Paradies exclusive license to operate the PGA TOUR Shops for an additional five (5) years. These representations in the fact stipulation are not found to relate to the factor to be considered by the undersigned which is Section 287.133(3)(e)3.h, Florida Statutes (1996 Supp.). Section 287.133(3)(e)3.i, Florida Statutes (1996 Supp.) makes it incumbent upon the person or affiliate who is convicted of a public entity crime applicable to that person or affiliate of that person to notify the Department within 30 days of the conviction of the public entity crime. Without necessity the parties stipulated that: On July 9, 1993, the same day the indictment was returned, Paradies Shops notified all airports at which Paradies Shops (or its subsidiaries or affiliates) operates, including all airports in Florida of the indictment that was returned by the Federal Grand Jury in Atlanta. Copies of the indictment were sent to all airports in Florida along with the notification. Copies of the notice of indictment sent to all Florida Airports at which Paradies Shops operated are attached and incorporated in the fact stipulation as Exhibit G. As contemplated by the statute and stipulated to by these parties: On January 24, 1994, the first business day after the conviction, Paradies Shops notified all such airports in Florida (and elsewhere) of the guilty verdicts returned by the jury in Atlanta. Copies of the Notices of Convictions sent to all Florida airports at which Paradies operated are attached and incorporated into this stipulation as Exhibit H. On April 15, 1994, the same day as the sentencing, Paradies Shops notified all such airports in Florida (and elsewhere) that the District Court had denied the Motion for Judgment of Acquittal or New Trial. Copies of the notices reporting Denial of the Motionfor Judgment of Acquittal or new trial sent to all Florida airports at which Paradies Shops operated are attached and incorporated into this stipulation as Exhibit I. Additionally, the parties stipulated that "the Department of Management Services has been informed of all subsequent developments and decisions." This refers to circumstances following the notification to the Florida airports that the District Court had denied the Motion for Judgment of Acquittal or New Trial. It is not clear from the fact stipulation upon what basis the Department was informed of the judgments of convictions within 30 days after the conviction of the public entity crime applicable to the subject persons or affiliates nor has it been shown that any public entity (Florida airports) which received the information that a person had been convicted of a public entity crime had transmitted that information to the Department in writing within 10 days after receipt of that information as contemplated by Section 287.133(3)(b), Florida Statutes (1996 Supp.). Nonetheless, the parties have stipulated that pursuant to Section 287.133(3)(b), Florida Statutes (1996 Supp.), Paradies Shops made timely notification to the Department of the conviction of public entity crimes applicable to persons or affiliates of that person and provided details of the convictions and that communication was direct. Section 287.133(3)(e)1., Florida Statutes (1996 Supp.), was complied with by the Department through its Notice of Intent to Paradies Shops and Paradies Midfield in writing indicating the intent to place those persons on the Convicted Vendor List. This notification occurred on April 29, 1997. A copy of the Notification is included with the parties fact stipulation as Exhibit B. On April 29, 1997, in accordance with Section 287.133(3)(e)2, Florida Statutes (1996 Supp.), Paradies Shops and Paradies Midfield timely filed a Petition for Administrative Hearing pursuant to Section 120.57(1), Florida Statutes (1996 Supp.) to determine whether it is in the public interest for Paradies Shops and Paradies Midfield to be placed on the State of Florida Convicted Vendor List. A copy of the petition for Formal Administrative Hearing is attached and incorporated in the parties fact stipulation as Exhibit C. Section 287.133(3)(e)3.j, Florida Statutes (1996 Supp.), calls for consideration of "the needs of public entities for additional competition in the procurement of goods and services in their respective markets." The parties have not stipulated concerning that criterion. Therefore, no factual basis exists for determining the needs of public entities for additional competition in the procurement of goods and services in the respective markets. Section 287.133(3)(e)3.k, Florida Statutes (1996 Supp.), addresses "mitigation based upon any demonstration of good citizenship by the person or affiliate." In responding to that factor the parties have stipulated to the following: Paradies Shops was rated the 'Best Airport Retail Concessionaire for 1995' by an expert group of Concessionaires, and Consultants and Airport Managers. Paradies Shops was also chosen as the 'concessionaire with highest regard for customer services'. These awards were reported in the December 20, 1995 edition of 'World Airport Retail News', a publication based in West Palm Beach, Florida. A copy of this report is attached and incorporated into the stipulation as Exhibit J. In addition, Paradies Shops has supplied letters from 26 airport authorities attesting to the good citizenship of Paradies Shops. Copies of such Supplied Letters are attached and incorporated into the stipulation as Exhibit K. Paradies Shops was rated the 'Best Airport retail concessionaire for 1996' by an expert group of concessionaires, and Consultants and Airport Managers. Paradies Shops has now won this award for the past two (2) consecutive years. In each year, Paradies Shops was honored with this Award by a separate panel of experts. Additionally, Paradies Shops was granted the following awards in 1996: 'Best Airport Retailer', 'Concessionaire with Highest Regard for Public Service', 'Best New Specialty Retail Concept', and 'Most Visually Attractive, Engaging Retail Store Front in an Airport'. Notice of these awards appeared in the February 20, 1997 edition of 'World Airport News', a copy of which is attached and incorporated into the stipulation as Exhibit L'. Having considered the fact stipulations and Exhibits J, K, and L, it is concluded that these facts and exhibits do not relate to demonstration of good citizenship as described in Section 287.133(3)(e)3.k, Florida Statutes (1996 Supp.).
The Issue Whether the State of Florida, Department of Transportation (“Department”), properly denied Wilton Manors Street Systems, Inc.’s (“Wilton Manors”), applications for outdoor advertising sign permits.
Findings Of Fact Wilton Manors is a for-profit corporation authorized to engage in the business of outdoor advertising in the state of Florida. The Department is the agency vested with the responsibility to administer and enforce the provisions of chapter 479, Florida Statutes, including the approval and denial of applications for permits for outdoor advertising signs that are located within 660 feet of the State Highway system, interstate, or federal-aid primary system. In July 2012, Wilton Manors entered into a lease agreement with the City of Boynton Beach (“City”) for the construction of a two-sided billboard on a portion of real estate owned by the City on the east side of Interstate 95, located at 510 Northwest 14th Court, Boynton Beach, Florida. The site is located in an area commonly known as the City of Boynton Beach Public Works Site. The Public Works Site consists of two parcels bordered by Interstate 95 to its west. The north and south portions of the property totals approximately nine acres. The two parcels are contiguous and have the same zoning and future land use classification. Each parcel consists of approximately four and one-half acres. The subject sign is proposed to be placed on the far northwest section of the southern parcel near the border of the northern and southern parcels. On August 9, 2012, Wilton Manors submitted two applications (application numbers 58994 and 58995) to the Department for a double-faced outdoor advertising sign to be located on the east side of Interstate 95, 0.75 miles north of Boynton Beach Boulevard. The applications were assigned file numbers 58994 and 58995. The applications were complete and the appropriate fee was provided. The proposed sign structures met the size, height, and spacing requirements of section 479.07, Florida Statutes. The proposed sign would be visible and within 660 feet of an interstate. On September 6, 2012, the Department issued Wilton Manors a Notice of Denied Outdoor Advertising Permit Application, advising that Wilton Manors’ applications for double-faced outdoor advertising sign permits were not approved because of the following reasons: Location is not permittable under land use designations of site. [s.479.111(2), FS] Location does not qualify as unzoned commercial/industrial area. [s.479.01(26), FS] On December 14, 2012, Wilton Manors filed a Petition for Formal Administrative Hearing to challenge the Department’s denial of its applications. By agreement of the parties, referral of the petition to the DOAH was deferred. In 2014, while the petition remained pending before the Department, statutory changes were made to chapter 479, to include a new section 479.024, effective July 1, 2014. After the new law became effective, Wilton Manors supplemented its permit applications and submitted additional information to the Department. The supplemental information provided by Wilton Manors to the Department in response to the statutory changes included a certification from Michael Rumpf, the City’s Planning and Zoning Director since 1999. Mr. Rumpf completed the portion of the Department’s application regarding land use, certifying the designation of the Future Land Use Map for the parcel as Public, Private Governmental and Institutional (“P, PG & I”), and the current zoning of the parcel as Public Usage (“PU”). Mr. Rumpf confirmed that the parcel is in an industrial zone or commercial zone in accordance with the new statute. Mr. Rumpf certified and checked the box “yes” under the question: “Does the referenced property qualify as a commercial or industrial parcel as defined in section 479.024, F.S. and section 14-10.0052, F.A.C.” Prior to executing the verification form, Mr. Rumpf reviewed the new statute and definitions of industrial use and commercial use in the statute. The Department requested that its expert in the area of land use and comprehensive zoning, David Depew, review the supplemental application and information submitted by Wilton Manors to the Department and determine whether the proposed parcel is in an industrial zone or commercial zone as defined in the new section 479.024. Mr. Depew concluded that it is not, and therefore, the Department did not alter its initial decision to deny Wilton Manors’ permit application based on the changes to chapter 479. The central factual issue to be determined in this case by the undersigned is whether the subject parcel is located within a commercial or industrial zone as defined in section 479.024. The City determined that the parcel is located within a commercial or industrial zone, in compliance with chapter 163, Florida Statutes. The parcel is appropriate for commerce, industry, or trade. The parcel is comprehensively zoned PU, and the City’s land development regulations include commercial or industrial uses as allowable uses. The parcels were previously used by the City for its wastewater treatment plant. The parcels continue to be actively used by the City for industrial uses and as an industrial site for the staging of waste collection, vegetative debris, recycling activities, and the storage of equipment, materials, and supplies in connection with the City’s solid waste management system and public works. Many large industrial waste-type dumpsters and recycling bins are located on the parcels. The storage of the recycling bins is part of the City’s recycling service which generates revenue for the City. Large trucks access the property on a regular basis. An existing cell tower on the northern parcel services both public and private users. The parcel can reasonably accommodate a commercial or industrial use under the future land use map of the City’s comprehensive plan and land development regulations. Sufficient utilities are available to support commercial or industrial development. The public access to the parcel is sufficient to accommodate a commercial or industrial use. Currently, the City utilizes large commercial trucks in its conduct of the aforementioned industrial operations. The parcel is not being used exclusively for noncommercial or nonindustrial uses. In sum, the persuasive evidence establishes that the parcel is located within a commercial or industrial zone.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order granting Wilton Manors’ applications for outdoor advertising sign permits (application numbers 58994 and 58995) and issue the requested outdoor advertising permits. DONE AND ENTERED this 22nd day of January, 2016, in Tallahassee, Leon County, Florida. S DARREN A. SCHWARTZ 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 22nd day of January, 2016. COPIES FURNISHED: J. Stephen Menton, Esquire Rutledge Ecenia, P.A. Suite 202 119 South Monroe Street Tallahassee, Florida 32301 (eServed) Susan Schwartz, Esquire Department of Transportation Haydon Burns Building Mail Stop 58 605 Suwannee Street Tallahassee, Florida 32399-0458 (eServed) Andrea Shulthiess, Clerk of Agency Proceedings Department of Transportation Haydon Burns Building Mail Stop 58 605 Suwannee Street Tallahassee, Florida 32399-0450 (eServed) Tom Thomas, General Counsel Department of Transportation Haydon Burns Building Mail Stop 58 605 Suwannee Street Tallahassee, Florida 32399-0450 (eServed) James C. Boxold, Secretary Department of Transportation Haydon Burns Building Mail Stop 57 605 Suwannee Street Tallahassee, Florida 32399-0450 (eServed)
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Petitioner, John's Island Club, Inc. (petitioner or the club), is a not-for-profit corporation which owns and operates a private country club facility in the John's Island residential development in Indian River County, Florida. It provides a variety of recreational facilities to its members. Among the amenities are three golf courses, nineteen tennis courts, a tennis building, a beach club, a club house, a swimming pool, and dining facilities. Respondent, Department of Revenue (DOR), is a statutorily created agency charged with the administration of the state revenue laws, including Chapter 212, Florida Statutes, and rules promulgated thereunder. As a result of an amendment made in 1991 to Subsection 212.02(1), Florida Statutes, DOR is authorized by law to impose an admissions tax on "dues and fees" paid to private membership clubs providing recreational facilities. As a private membership club, petitioner is subject to this tax. Beginning on July 1, 1994, petitioner made an assessment on each member to raise capital for the purpose of repairing and replacing many of its physical facilities. During the six month period ending December 31, 1994, $10,441,897 was collected from the members and made available to the club. Rule 12A- 1.005(d)1.b., Florida Administrative Code, which was adopted by DOR in December 1991 to implement the admissions tax on dues and fees, imposes a tax on "(a)ny periodic assessment (additional paid-in capital) required to be paid by members of an equity or non-equity club for capital improvements." Under the authority of that rule, DOR required that petitioner pay the applicable sales tax on the assessment collected through December 31, 1994, or $730,932.79, and that it continue to pay the tax as other similar assessments are made in the future. Claiming that the rule exceeds DOR's grant of rulemaking authority, and it modifies, enlarges, and contravenes the law implemented, petitioner filed a petition for administrative determination of invalidity of existing rule. DOR denies all allegations and asks that the validity of its rule be upheld. The Club and the Assessment The composition of the club The club began operation in 1969 but was purchased by its members in 1986. It is an equity private membership club but issues no stock. The club has two types of memberships: golf and sports social. Currently, the cost of a golf equity membership is $85,000 while the cost of a sports social membership is $30,000. After payment of these fees, the member receives a membership certificate, which represents his or her equity ownership interest in the club. At the present time, there are 1125 golf memberships and 257 sports social memberships. Of the 1125 golf memberships, the original developer still owns 67. In addition to having to purchase a membership, members must also pay annual dues. A golf member pays $4,875 in annual dues while a sports social member pays $2,760 in annual dues. A sales tax is also collected on these dues. The dues are used to cover operating expenses such as insurance, administrative costs, staff salaries, and maintenance costs. In addition, members pay fees for additional services such as golf cart use, golf bag storage, locker room use, and golf and tennis lessons. When a member decides to resign or retire from the club, he or she may resell the membership to the club (but not a third party) and receive the greater of (a) the initial amount paid by the retiring member, or (b) 80 percent of the current membership cost (with the remaining 20 percent retained by the club in a separate capital improvement account). The assessment In 1992, the club began studying the feasibility of repairing and replacing many of its physical facilities. The total cost of the proposed work was set at $16,372,000. By majority vote taken in the spring of 1994, the members decided to raise capital for the work by imposing a capital assessment on each current member. It was agreed that the capital contribution would be $12,000 from each golf member and $11,150 from each sports social member. However, the payment of the capital contribution was not intended to, and did not result in any, decrease in the dues which members were required to pay for the use of the club's facilities. A failure to pay the assessment would result in suspension from the club. Three different options were made available to the members for the manner of payment of the capital contribution. The options included (a) a single payment, (b) payment over a three-year period, or (c) payment of interest only until such time as the member either sold the membership or left the club. After making payment in full, the member would be issued a certificate of capital contribution. It is noted that the developer was required to pay the capital contribution for his 67 golf memberships. Further, any person joining the club after the imposition of the assessment would likewise be required to pay the assessment. Beginning in July 1994, the club began collecting the capital contribution from its members. From July through December 1994, some $10,441,897 was collected. A total sales tax of $730,932.79 has been paid on those collections. Shortly thereafter, petitioner opted to file this rule challenge. The Rule and its Origin Rule 12A-1.005(5)(d)1.b. provides as follows: (d)1. Effective July 1, 1991, the following fees paid to private clubs or membership clubs as a condition precedent to, in conjunction with, or for the use of the club's recreational or physical fitness facilities are subject to tax. * * * b. Any periodic assessments (additional paid in capital) required to be paid by members of an equity or non equity club for capital improvements or other operating costs, unless the periodic assessment meets the criteria of a refundable deposit as provided in sub-subparagraph 2.e. below. * * * Under the terms of the rule, the capital contri- bution assessed by the club does not qualify as a refundable deposit. This is because any difference between the amount collected by the club upon the sale of a membership to a new member, and the amount which was paid to the retiring member, is retained by the club. Because Rule 12A-1.005, Florida Administrative Code, covers a wide array of items subject to taxation, the DOR cites Sections 212.17(6), 212.18(2), and 213.06(1), Florida Statutes, as the specific authority for adopting the rule, and Sections 212.02(1), 212.031, 212.04, 212.08(6) and (7), 240.533(4)(c), and 616.260, Florida Statutes, as the law implemented. There is no dispute between the parties, however, that in adopting sub-subparagraph 1.b., which contains the challenged language, the agency was relying principally on Subsection 212.02(1), Florida Statutes, as the law being implemented. That subsection defines the term "admissions" for sales tax purposes. Although the parties did not specifically say so, DOR relies on Section 212.17(6), Florida Statutes, as its source of authority for adopting the rule. That subsection authorizes DOR to "make, prescribe and publish reasonable rules and regulations not inconsistent with this chapter . . . for the enforcement of the provisions of this chapter and the collection of revenue hereunder." For the purpose of assisting DOR in administering the Florida Revenue Act of 1949, which imposes a sales and use tax on various transactions, Section 212.02, Florida Statutes, provides definitions of various terms used in the chapter, including the term "admissions." Prior to the 1991 legislative session, subsection 212.02(1) read in pertinent part as follows: The term "admissions" means and includes . . . all dues . . . paid to private clubs and membership clubs providing recreational or physical fitness facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, exercise, and fitness facilities. During the 1991 legislative session, the definition of the term "admissions" was expanded by the addition of the following underscored language: The term "admissions" means and includes . . . all dues and fees . . . paid to private clubs and membership clubs providing recreational or physical fitness facilities, including, but not limited to, golf, tennis, swimming, yachting, boating, athletic, excercise, and fitness facilities. Thus, the legislature added the term "fees" to the term "dues" for those amounts "paid to any private clubs and membership clubs" which would be subject to the admissions tax. Prior to the above change in substantive law, rule 12A-1.005(5), as it then existed, provided that dues paid to athletic clubs which provided recreational facilities were taxable. However, subparagraph (5)(c) of the rule also provided that (c) Capital contributions or assessments to an organization by its members are not taxable as charges for admissions when they are in the nature of payments made by the member of his or her share of capital costs, not charges for admission to use the organization's recreational or physical fitness facilities or equipment, and when they are clearly shown as capital contributions on the organization's records. Contributions and assessments will be considered taxable when their payment results in a decrease in periodic dues or user fees required of the payor to use the organization's recreational or physical fitness facilities or equipment. Therefore, capital contributions were not taxable unless they resulted in decreased dues. That is to say, if a club levied an assessment on members and concurrently lowered its monthly dues, the assessment would be deemed to be taxable and in contravention of the rule. Thus, the effect of the rule was to prevent a club from renaming "dues" as "capital contributions" or "assessments" in order to avoid paying a tax on the dues. After the change in substantive law, the DOR staff began preparing numerous drafts of an amendment to its rule to comply with the new statutory language. At one stage of the drafting process, a DOR staffer recommended that, because the legislature had not provided a definition of the term "fee," the DOR should adopt a rule which provided that capital contributions be "not taxable if assessed under an equitable membership." Relying on what it says is the legislative intent, the DOR eventually proposed, and later adopted, the rule in its present form. In doing so, the DOR relied upon the terms "capitalization fees" and "capital facility fees" which are found in certain legislative history documents pertaining to the new legislation. Legislative History of the Law Implemented Although a number of bills related to the subject of a sales tax on admissions, the bill enacted into law was identified as Committee Substitute for House Bill 2523 (CS/HB 2523). The legislative history of the various bills relating to this subject has been received in evidence and considered by the undersigned. In early 1991, the House and Senate considered bills which addressed amendments to the sales tax on admissions. The first time the issue was addressed was at a meeting on February 21, 1991, of the Subcommittee on Sales Tax of the House Committee on Finance and Taxation. The discussion at the meeting indicated that the intent of the bill was to close a loophole that allowed physical fitness facilities to change their pricing structure to charge a higher initiation fee, which was not taxable, and thereby reduce their monthly dues, which were taxable, so as to reduce the revenue below that originally anticipated by this tax on admissions. This is corroborated by the bill analysis of the proposed committee bill that was offered, PCB FT 91-3A, which summarized the problem and solution as follows: Section 212.02(1), F. S. was amended during the 1990 Legislative Session to include in the definition of admissions those "dues" of "membership clubs" providing "physical fitness" facilities. Some clubs have attempted to avoid the tax (on dues) by shifting a substantial portion of the members' payments from "dues" to "initiation fees." Section 212.02(1), F. S., is amended to include "fees" as well as "dues" in the definition of admissions. All fees, including initiation fees and capitalization fees, paid to private clubs and membership clubs providing recreational or physical fitness facilities would be subject to the sales tax on admissions. It is unclear, but likely, that PCB FT 91-3A became House Bill 2417 (HB 2417). The bill analysis and economic impact statement on HB 2417, which was prepared by the House Committee on Appropriations, contained identical language to that in the bill analysis on PCB FT 91-3A. At the same time, the Senate was considering Senate Bill 1128, which later became Committee Substitute for Senate Bill 1128 (CS/SB 1128). On March 14, 1991, a staff analysis and economic impact statement on CS/SB 1128 was prepared by the Senate Committee on Finance, Taxation and Claims. It provided that: Section 212.02(1), Florida Statutes, defines "admissions" for sales and use tax purposes. Monthly fees of clubs with major facilities such as tennis courts, a swimming pool or a golf course have always been subject to the sales tax. During the 1990 Legislative Session this statute was amended to include dues on membership clubs providing physical fitness facilities, and not having these other major facilities. According to the DOR, such clubs have attempted to avoid payment of this tax by shifting a substantial portion of the members payments from dues to initiation fees which are not taxed. Accordingly, the purpose of the proposed statutory amendment was "to include initiation fees as well as dues in the definition of admissions." HB 2417 was passed by the House on April 17, 1991, and was sent to the Senate, where it was referred to the Committee on Finance, Taxation and Claims. HB 2417 died in that Committee. CS/SB 1128 was passed by the Senate on April 4, 1991, and was sent to the House, where it died in messages. A separate bill, Committee Substitute for House Bill 2523, which addressed similar issues to those addressed in HB 2417 and CS/SB 1128, was passed by the House on April 4, 1991, and was sent to the Senate where it was passed with amendments. The Bill was then returned to the House where further amendments were adopted. The Bill was again sent to the Senate with a request for the Senate to concur with the House amendments. The Senate refused to concur and the Bill was sent to a conference committee. The conference committee on finance and taxation met on April 19, 1991. The entirety of the discussion of the committee on this issue is as follows: Senator Jenne: The - - going down to number 21, admissions, initiation fees. The House includes capitalization fees. Representative Abrams: Which is this? Mr. Weiss: The Senate bill just states initiation fees are additionally included. The House bill, I believe, says that it's just all fees, which would include whether they called them initiation fees or capital facility fees or whatever. Representative Abrams: Because we are using something other than initiation - - Mr. Weiss: It's a fee that is going to be included. Representative Abrams: Yes, they were using - - they were breaking down categories of fees to avoid the tax, I think is what the deal was there. That gets us how much? Senator Jenne: Okay, well, it doesn't matter, because you can do it. Representative Abrams: Okay, good. Although the terms "capital facility fees" and "capitalization fees" were used during the discussion, contrary to DOR's assertion, it is far from clear that the intent of the amendment was to make taxable all capital contributions and assessments paid by members of private clubs providing recreational facilities. When placed in context with the prior debate before the committees and their staff analyses, it is much more likely that the intent was to close a loophole then used by physical fitness clubs who were renaming dues as fees in order to avoid taxes. The report of the conference committee was received by both houses on April 30, and CS/HB 2523 was passed by both houses the same day. The conference committee report for the bill contains only the following language describing the sales tax on admissions/initiation fees: Includes all recreational or physical fitness facility fees in the definition as admissions. The official conference committee report contains no reference to the terms "capitalization fees" or "capital facility fees." Neither does it make reference to the terms "assessment" or "paid in capital," which are the terms used by DOR in its rule. In the final bill analysis and economic impact statement prepared by the House Committee on Finance and Taxation for CS/HB 2523 on June 12, 1991, or 43 days after the bill was passed, the analysis states that subsection 212.02(1) was amended to include: "fees" as well as "dues" in the definition of admissions. All fees, including initiation fees and capitalization fees, paid to private clubs and membership clubs providing recreational or physical fitness facilities would be subject to the sales tax on admissions . . . This amendment should also limit further attempts to avoid taxation by renaming the fees collected from members. The staff analysis was obviously not available to members of the House or Senate when they voted on the bill on April 30, 1991. Although the final bill analysis used the term "capitalization fees," no where in any of the legislative history is there evidence of any legislative consideration of what was actually meant by that term. This is also true of the term "capital facility fees" which surfaced on one occasion prior to the passage of the bill. Capitalization Fees and Their Significance The sole basis for the DOR including the tax on assessments for capital improvements was the appearance in the legislative history of the terms "capitalization fees" and "capital facility fees." Neither term has any meaning to tax accountants. However, the accounting witnesses for both parties agreed that, from an accounting perspective, the phrase "capital facilities" would be understood to be assets having a life longer than one year. A capital contribution is typically a one time payment for the purchase of assets. It does not entitle the member to use the club. It is an equity transaction, not an income transaction, and it represents an intent to make an investment to improve the value of the membership assets separate and apart from the payment of annual expenses for the receipt of some service. "Dues" are a member's contribution to the operating costs of a club. They are assessed over an annual period and they are recurring. They also represent the payment that a member pays for admission to the organization. A capital contribution paid by a member of an equity membership club is not "dues." "Fees" as applied to a club are user charges. They are voluntary so that a member can decide whether or not to incur the charge based on whether the member uses the particular service to which it relates. A capital contribution is not a "fee."
The Issue The issue is whether Florida Administrative Code Rule 61G14-22.012 is an invalid exercise of legislatively delegated authority in violation of section 120.52(8), Florida Statutes (2014).
Findings Of Fact Petitioner BBP is an association of harbor pilots that performs the pilotage services at PortMiami. BBP consists of pilots licensed by the State of Florida in accordance with chapter 310, Florida Statutes. Petitioner PEPA is an association of harbor pilots that performs the pilotage services at Port Everglades. PEPA consists of pilots licensed by the State of Florida in accordance with chapter 310. FHPA is a statewide organization representing the interests of Florida’s approximately 100 state-licensed harbor pilots, the membership of which is comprised of the eleven local pilot associations that serve each of Florida’s 14 deep-water ports. BBP and PEPA are members of FHPA. Chapter 310 governs pilots, piloting, and pilotage in the waters, harbors, and ports of Florida. Section 310.141, Florida Statutes, requires that, except in certain narrow circumstances, all vessels shall have a licensed state pilot or deputy pilot on board to direct the movements of the vessel when entering or leaving ports of the state or when underway on the navigable waters of the state’s bays, rivers, harbors, and ports. Section 310.011 creates the 10-member Board of Pilot Commissioners (“BOPC” or “Board”); each member is appointed by the Governor “to perform such duties and possess and exercise such powers relative to the protection of the waters, harbors, and ports of this state as are prescribed and conferred on it in this chapter.” In addition to other responsibilities, the Board determines the number of pilots in each port (section 310.061) and disciplines licensed pilots when appropriate (section 310.101). Although the BOPC has numerous statutory responsibilities, setting the rates of pilotage in each port is not one of them. Florida Administrative Code Rule 61G14-22.012 (“challenged rule” or “rule”) is entitled “Determination of Disputed Issues of Material Fact; Formal or Informal Hearings.” 5. Rule 61G14-22.012 cites section 310.151(1)(c) as specific authority. The challenged rule lists as “Law Implemented” sections 310.151 and 120.57. The former Pilotage Rate Review Board originally adopted the rule in 1995. When the Legislature amended chapter 310 in 2010, the former Pilotage Rate Review Board’s name was changed to the Pilotage Rate Review Committee (“PRRC” or “Committee”). The Committee consists of seven members, all of whom are also members of the BOPC. The PRRC is responsible for setting rates of pilotage in each port. On November 5, 2014, the BOPC/PRRC published a notice in the Florida Administrative Register announcing a telephone conference call meeting for consideration of “Rate Review Committee Rules.” PRRC members voted at that meeting to repeal rule 61G14-22.012, but determined they did not have enough information to know if a Statement of Estimated Regulatory Costs was required. On December 11, 2014, the BOPC/PRRC published a second notice in the Florida Administrative Register announcing a telephone conference call meeting for consideration of “Rate Review Committee Rules.” At that meeting, the PRRC voted to reconsider its original vote to repeal rule 61G14-22.012, but because the issue of potential reconsideration had not been properly noticed, no official vote on reconsideration was taken. On January 7, 2015, the BOPC/PRRC published a notice in the Florida Administrative Register announcing a meeting on January 22, 2015, and January 23, 2015. Among the subjects noticed for consideration was “Reconsideration of Repeal of Rule 61G14-22.012, F.A.C.” This matter was considered by the PRRC on January 23, 2015. By a 5-2 vote, the Committee voted against repealing rule 61G14-22.012. FCCA is a trade association representing cruise lines that are subject to pilotage fees pursuant to chapter 310, Florida Statutes. FCCA has filed petitions to reduce the rates of pilotage in both PortMiami and in Port Everglades.
