Findings Of Fact Petitioner, D & H Oil and Gas Company, Inc., dba Oasis Food Store, owns and operates an Oasis Food Store located at 2521 Thomas Drive in Panama City Beach, Florida. As part of the operation of that store, Petitioner operates a gasoline station which sells regular unleaded, unleaded plus, and unleaded premium gasoline to the public. On September 14, 1990, James Wood, the Department's inspector, visited the station to conduct an inspection of the gasoline Petitioner was offering for sale to the consuming public from its tanks and related gasoline pumps. Mr. Wood took samples of all three types of gasoline offered for sale by Petitioner. The samples were forwarded to the Department's laboratory in Tallahassee and were tested to determine whether they met Departmental standards for each type of gasoline. The Departmental testing revealed that the unleaded plus gasoline contained 9.3% alcohol. The pump for the unleaded plus gasoline did not have a label or sticker on it indicating that it contained alcohol. Since the pump did not have such a sticker on it, the sale of any unleaded plus gasoline from that pump would be in violation of Departmental standards for such gasoline. 1/ The store placed the appropriate sticker on the unleaded plus pump as soon as it was possible. In light of the above facts, the Department elected to allow the Petitioner to post a $1,000 bored in lieu of confiscation of the gasoline. The bond was posted on September 17, 1990. No evidence of the amount of gasoline sold while the label was absent was submitted at the hearing. 2/ The Department assessed Petitioner $1000.00, which is equal to the amount of the posted bond. This amount was not based on any evidence of the amount of gasoline sold from the unleaded plus pump during the time the label was not on the pump. Such an assessment is clearly outside the Department's authority. See Section 525.06, Florida Statutes. Therefore, Petitioner is entitled to a refund of its bond.
Recommendation It is accordingly, RECOMMENDED: That the request of D & H Oil and Gas Company, Inc., for refund of the bond posted be GRANTED. DONE and ORDERED this 23rd day of May, 1991, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of May, 1991.
The Issue The issue presented for decision herein is whether or not Petitioner's Antiknock (octane) Index number of its petroleum product was below the Index number displayed on its dispensing pumps.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received, and the entire record compile herein, I make the following relevant factual finding. Rafael Ruiz is the owner/operator of Coral Way Mobil, an automobile gasoline station, situated at 3201 Coral Way in Coral Gables, Florida. Ruiz has operated that station in excess of ten (10) years. On or about May 13, 1987, Respondent, Department of Agriculture and Consumer Services, received a customer complaint alleging that the fuel obtained from Petitioner's station made her automobile engine ping. Respondent dispatched one of its petroleum inspectors to Petitioner's station at 3201 Coral Way on May 14, and obtained a sample of Respondent's unleaded gasoline. Inspector Bill Munoz obtained the sample and an analysis of the sample revealed that the produce had an octane rating of 86.9 octane, whereas the octane rating posted on the dispenser indicated that the octane rating of the product was 89 octane. On that date, May 14, 1987, Respondent issued a "stop sale notice" for all of the unleaded product which was determined to be 213 gallons. Petitioner was advised by Inspector Munoz that the unleaded produce should be held until he received further instructions from the Respondent respecting any proposed penalty. On May 15, 1987, Petitioner was advised by John Whittier, Chief, Bureau of Petroleum Inspection, Florida Department of Agriculture and Consumer Services, that the Antiknock Index number of the sampled product was 2.1 percent below the octane rating displayed on the dispenser and that an administrative fine would be levied in the amount of $200 based on the number of gallons multiplied times by the price at which the product was being sold, i.e., 213 gallons times 93.9 cents per gallon. Petitioner did not dispute Respondent's analysis of the product sample, but instead reported that he had been advised that three of the five tanks at his station were leaking and that this is the first incident that he was aware of wherein the product tested below the octane rating displayed on the dispenser.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is hereby RECOMMENDED: That the Respondent, Department of Agriculture and Consumer Services, enter a Final Order imposing an administrative fine in the amount of $200 payable by Petitioner to Respondent within thirty (30) days after entry of the Respondent's Final Order entered herein. RECOMMENDED this 7th day of October, 1987, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of October, 1987. COPIES FURNISHED: Rafael E. Ruiz c/o Coral Way Mobil 3201 Coral Way Miami, Florida 33145 Clinton H. Coulter, Jr., Esquire Senior Attorney Office of General Counsel Department of Agriculture and Consumer Services Room 514, Mayo Building Tallahassee, Florida 32399-0800 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain, Esquire General Counsel Department of Agriculture, and Consumer Services Room 513, Mayo Building Tallahassee, Florida 2399-0800
Findings Of Fact The Respondent owns and operates the Heart of Florida Truck/Auto Plaza ("Truck-Stop"), on U.S. 27 North, Haines City, Florida. When he purchased the truck-stop in October of 1978, he had no prior experience in the operation of such facilities. (Stipulation, Testimony of Respondent) During September of 1979, the Respondent's fuel supplier notified him that premium gasoline would no longer be delivered. Respondent decided, therefore, to convert his 6,000 gallon premium gasoline tank into a diesel fuel storage tank. (Stipulation, Testimony of Respondent) In order to convert the tank to diesel fuel usage, Respondent pumped out all but a residual consisting of approximately 100 gallons of gasoline and 200 gallons of water. Even with the use of an auxiliary electric pump, the Respondent could not succeed in removing the remaining 238 gallons of residual. (Stipulation, Testimony of Respondent) He, then, sought advice from others on ways to empty the tank, including his jobber, diesel mechanic, truck drivers and trucking firms served by his truck-stop. While no one could suggest a method of removing the residual, they assured Respondent that truckers and diesel mechanics preferred a fuel mixture of 1 gallon of gasoline per 100 gallons of diesel fuel because of improved engine performance. (Testimony of Respondent) Based on such advice, the Respondent filled the tank in question with diesel fuel No. 2 and sold the resulting diesel/gasoline mixture to truckers as diesel fuel No. 2. Because of the presence of gasoline, this diesel fuel had a flash point at 440 F. (Testimony of Respondent, John Whitton, and petitioner's exhibit 3) In mixing the diesel with the gasoline in the tank, Respondent reasonably believed, in good faith, that the resulting mixture would not be hazardous or dangerous to its users. He did not know, and had not been previously notified, that the Department had set standards which strictly regulated the quality of gasoline and diesel fuel sold in Florida. Nor did he know that gasoline and diesel fuel sold in violation of such standards would be subject to confiscation and sale by the Department. (Testimony of Respondent) Although the Department regularly mails freight surcharge information every two weeks to retail gasoline outlets such as Respondent's, it does not periodically disseminate information on its petroleum regulatory program. Copies of the Department's rules, and gasoline standards, are available only on request. (Testimony of Lois W. Thornton and John Whitton) Each month, the Department issues approximately 100 Stop Sale Notices to gasoline retailers in Florida. Approximately 12 percent of these Notices are based on unlawful sale of fuel with flash points below Department standards. In such cases, the Department has consistently followed a practice of allowing the retailer to continue ownership of the fuel (in lieu of Department confiscation) only upon the posting of a bond equal to the value of the substandard fuel. However, notwithstanding the value of the substandard fuel, the Department does not require posting of a bond in excess of $1,000.00. Upon resolution of the administrative enforcement actions in favor of the Department, the bonds are forfeited to the Department, in lieu of confiscation. (Testimony of John Whitton) Since, in this case, the value of the offending fuel far exceeded $1,000.00, the Department allowed, and Respondent willingly posted a $1,000.00 bond with the Department. (Testimony of Respondent and John Whitton, and Petitioner's exhibit 2)
Conclusions Respondent violated the Department's gasoline and oil standards. He should, therefore (in lieu of confiscation) forfeit the cash bond he previously posted.
The Issue The issue here presented concerns an alleged violation of Rule Subsection 5F-2.01(1)(c)1, Florida Administrative Code, related to the permissible ten percent (10 percent) evaporated temperature for which gasoline shall not exceed 140F, and penalties to be imposed for such violations, in keeping with Section 525.06, Florida Statutes (1980), and Rule Subsection 5F-2.01(1)(c)1, Florida Administrative Code.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the documentary evidence received and the entire record compiled herein, the following relevant facts are found. The Petitioner, State of Florida, Department of Agriculture and Consumer Services, is an agency of State government which has the obligation to inspect petroleum products in keeping with the provisions of Chapter 525, Florida Statutes (1980). The Respondent is a corporation which sells petroleum products in the State of Florida at an outlet located at 3411 U.S. 19 North, Pasco County, Tarpon Springs, Florida. On November 23, 1981, a sample of the petroleum product, super unleaded gasoline (which was offered for sale) was taken from the Respondent's facility as indicated above. A subsequent analysis of that product by Petitioner's mobile laboratory revealed that the ten percent (10 percent) evaporated temperature was 153F. This reading exceeded the ten percent (10 percent) evaporated temperature of 140F as set forth in Rule Subsection 5F-2.01(1)(c)1, Florida Administrative Code. Petitioner's inspector, Jamie Gillespie, advised Respondent's agent that the premium unleaded gasoline was illegal due to its "stale" condition and the Respondent was given an option of either confiscation of the product or posting of a bond. The product is presently under a Stop Sale Notice and is under seal. (Petitioner's Composite Exhibit No. 1.) A subsequent analysis by Petitioner's laboratory in Tallahassee revealed that the evaporation level of the product was found to be approximately 163F. Ben Bowen, Petitioner's Assistant Bureau Chief in charge of petroleum inspection, indicates that the discrepancy in the evaporation levels as analyzed by the two laboratories was most probably due to the seal which was on the product and the approximate seven (7) day delay in the transfer of the product from Tarpon Springs to the laboratory in Tallahassee. Respondent's supervisor, Mark Ordway, 1/ was shown how the product could possibly become stale due to a "venting" problem from the roof of the storage tank where the product was stored. Sam Puleo, a lab technologist employed in Petitioner's mobile laboratory, analyzed the sample of the product taken from Respondent's facility. According to Mr. Puleo, "stale" products such as that taken from Respondent's tanks would make it difficult to start an automobile engine.
Findings Of Fact On March 14, 1984, an inspector for the Petitioner, examined gasoline storage facilities from which Respondent, Zippy Mart #145 was dispensing gasoline. This store is found at 12524 San Juan Boulevard, Jacksonville, Duval County, Florida, (This product that was being dispensed by the Respondent at this location was the subject of consumer complaint.) Subsequent testing of the product known as Zippy Unleaded, as taken from the storage tank, revealed a 90 percent evaporated temperature of 376 degrees Fahrenheit and an end point of 493 degrees Fahrenheit. This was in keeping with laboratory procedures of the Petitioner. These matters were retested showing 90 percent evaporated temperature of 379 degrees and a 489 degree Fahrenheit end point. In lieu of the confiscation of the three thousand gallons which remained in the subject tank, related to the unleaded fuel at the store location, Respondent was allowed to post a bond in the amount of a thousand dollars and to remove the product from the premises and place new product in the tank. The reason for the values as shown in the sample pertaining to the 90 percent evaporated temperature and end point was due to the presence of diesel fuel within the tank designated for unleaded gasoline. The product as dispensed from that tank would cause engine damage to the automobile using that fuel, as evidenced by knocking and poor acceleration.
The Issue The issues to be determined are whether Southeast Petro Distributors, Inc. (Petitioner or Southeast Petro), is entitled to a refund for taxes paid on its purchases of identified machinery and equipment based upon an exemption in section 212.08(5)(b), Florida Statutes; and, if so, whether Southeast Petro is entitled to statutory interest on the amount of any refund paid, pursuant to section 213.255, Florida Statutes.
Findings Of Fact Based on the testimony and documentary evidence presented, the demeanor of the witnesses, and the stipulations of the parties, the following facts are found: Southeast Petro is a fuel distributor that distributes fuel to customers in the Southeastern United States, concentrated mostly in Florida. Southeast Petro does not operate any of the locations to which it delivers fuel, but the operators of many of the locations, like Southeast Petro, are affiliate 1 Petitioner’s Exhibit 22 is for demonstrative purposes only. companies of M&R High Point Holdings, Inc. Summit Shah is the President of Southeast Petro and has been with the company for 22 years. He referred to these affiliate companies as “disregarded entities,” and testified that the companies are part of a family business, with all of the same officers and common ownership under a single federal tax return. Those other than Southeast Petro are referenced in this Recommended Order as affiliate sites. Southeast Petro also delivers fuel to locations in which it has no ownership interest. For these locations, which are referred to as dealer locations, Southeast Petro has entered into Dealer Supply Agreements. Under these agreements, Southeast Petro supplies not only the fuel to the dealers, but equipment to store and dispense the fuel, including gasoline tanks and dispensing pumps. While ownership of the fuel passes to the dealer when it is transferred to the storage tanks, the storage tanks, dispensing pumps, and related equipment remain the property of Southeast Petro. Southeast Petro is required to supply fuel to the dealer as necessary to meet customer demand. Southeast Petro purchases the underground tanks and dispensing pumps for both its affiliate sites and the dealer locations that buy its fuel. Fuel tanks generally last approximately 20 years, and have warranties for 10-20 years, while dispensing pumps last about 10 years, with most warranties lasting for four years. Both the dispensing pumps and the underground storage tanks have a depreciable life of over three years. As the pumps age, they become less efficient and the flow of the gasoline slows. This case involves the replacement of dispensing pumps and a few underground storage tanks at gas stations serviced by Southeast Petro. Most gas stations sell unleaded gasoline with three octane ratings: premium, with a 93 rating; mid-grade, with an 89 rating; and regular unleaded, with an 87 rating. Different vehicles require different fuel octane levels to maximize the performance of the vehicle. For example, a high performance sports car requires premium gas, while a typical sedan runs just fine on regular unleaded gasoline. At one time, an underground tank was required for each kind of fuel. However, within the last approximately 20 years, dispensing pumps have been manufactured with a blender mechanism that allows for the elimination of one storage tank and blends percentages of unleaded and premium fuel to create mid-grade fuel at the dispensing location. With the use of this type of dispensing pump, the need to transport and store mid-grade fuel is eliminated. Reducing the number of tanks required at each location reduces cost of insurance, as well as the cost related to supplying the tanks, and the risk of fuel leaks from the underground tanks. The Department contends that while Southeast Petro is purchasing these dispensing pumps with the blender capability, it is the customer, as opposed to Southeast Petro, that is “making” the mid-grade fuel through his or her selection of mid-grade when making the fuel purchase. However, unless the dispensing pump is equipped with the mechanism that blends the fuel, the customer cannot access mid-grade fuel. On or about May 22, 2017, Southeast Petro filed a DR-26S, Application for Refund – Sales and Use Tax form (application), with the Department, claiming that it was entitled to a refund of $146,846.47 in sales tax paid for dispensing pumps and underground storage tanks it purchased to replace the dispensing pumps and tanks at several locations. The purchases were for dispensing pumps for both affiliated entities and for dealer locations. The replacement of some underground storage tanks was also included in the claimed purchases. Dispensing pumps were purchased from Central Industries, Inc.; Guardian Fueling Technologies, LLC; and Sunoco, LLC, and underground storage tanks were purchased from Modern Welding Company of Florida, Inc. In addition to the application, Petitioner provided a power of attorney form, a spreadsheet listing job code, invoice date, invoice number, taxable amount, sales tax, sales tax percentage, and invoice totals for the purchases at issue; and several invoices for purchases of gasoline pumps, tanks, and related hardware necessary for installation. The invoices reflect the different sites to which pumps were installed. At least some portion of the address for the site was included on the invoices, such as the street address, although they did not always identify the cities where the sites were located. The refund period in the application is May 2014 through April 2017. On June 20, 2017, the Department issued a Notice of Intent to Make Tax Refund Changes. In an attachment to the Notice, the Department stated that the information provided in the request for refund was insufficient, and requested that Petitioner provide an assignment of rights to refund of sales tax form; a plant schematic of the manufacturing facility identifying the location of the equipment included in the refund request; citations to applicable Florida Statutes and administrative rules upon which Petitioner was relying for the request for exemption and refund, along with any documentation (not specified) required to support the exemption/refund request; and information related to the claimed pollution control exemption, which is no longer relevant to these proceedings. The Notice of Intent to Make Refund Changes stated, “If you do not agree with these findings, you may request an informal conference to discuss any factual, statutory, or regulatory issues related to the above refund denial. Your request for informal conference must be made, in writing, to the above referenced office within 30 days of the issuance of this Notice.” It also advised that if the taxpayer did not request an informal hearing within 30 days, a Notice of Proposed Refund Denial would be issued on or about July 20, 2017. The attachment requesting additional documents did not expressly state a deadline for the submission of the documents requested. On July 20, 2017, the Department issued a Notice of Proposed Refund Denial for the Refund Claim. The attachment to the Notice of Proposed Refund Denial stated that the request for refund was being denied because the documentation requested in the Notice of Intent to Make Tax Refund Changes had not been provided. Southeast Petro timely protested the Notice of Decision of Refund Denial pursuant to Florida Administrative Code Chapter 12-6. Southeast Petro’s Protest letter, dated August 2, 2017, included the documents previously provided to the Department. No plant schematic identifying the equipment included in the refund request was ever provided to the Department, or produced at hearing, because no plant is involved. Instead, Petitioner asserts that each gas station is a fixed site where “manufacturing, processing, compounding, or producing for sale” is taking place. On November 17, 2017, Alan Fulton, who at that time was a tax law specialist for the Department, issued a letter to counsel for Petitioner stating that the documentation to date was not sufficient to support the claim, and that the Department needed, for each transaction/refund amount requested, a properly executed assignment of rights form from each of the selling dealers to which Petitioner asserts was paid in error; the amount of tax requested for each transaction in the refund claim; a clear and concise reconciliation of the invoices/transactions for which Petitioner was seeking a refund; and proof of tax paid to the vendor that reconciles to the refund amount. Mr. Fulton also asked for production records or documents to support the claim that the machinery and equipment purchased is used in a manufacturing process to produce a new product; and a thorough description of the manufacturing process, including the specific machinery used. Mr. Fulton advised that this information, as well as any other documentation that may support the protest, needed to be provided to the Department no later than December 12, 2017. On February 28, 2018, the Department issued a Notice of Decision (NOD) of Refund Denial, in which the Department denied the refund in its entirety. In the NOD, the Department noted that it had requested additional documentation from Petitioner that it did not receive. With respect for the claim under the new or expanding business exemption, the NOD stated in part: By asserting its purchases qualify for tax exemption under s. 212.08(5)(b), F.S., Taxpayer implies its purchases are used to manufacture of process tangible personal property for sale. However, Taxpayer provides no arguments as to how its retail gasoline stations are engaged in manufacturing, processing, compounding, or producing for sale tangible personal property at fixed locations. Additionally, Taxpayer has failed to submit documentation specifically requested, such as properly executed Assignment of Rights to Refund of Sales Tax, an Application for Temporary tax Exemption Permit, form DR-1214; proof of tax paid to vendors; production records supporting Taxpayers contention that the machinery and equipment purchased is used in a manufacturing process to produce a new product; a description of the manufacturing process, including the specific machinery and equipment used; and documentation received from the Florida Department of Environmental Protection for the projects. Nonetheless, in considering Taxpayer’s assertions of tax exemption, it is reiterated, pursuant to Rule 12A-1.096(1)(d), F.A.C., promulgated to administer s. 212.08(5)(b), F.S., the phrase “manufacture, process, compound, or produce for sale” means the various industrial operations of a business where raw materials will be put through a series of steps to make an item of tangible personal property that will be sold. The gasoline was previously manufactured by a refinery from crude oil. Furthermore, it is the Taxpayer’s customers that operate the gasoline dispensing pumps at the retail stations, and not for the purpose of conducting industrial operations. As such, the Department does not find that Taxpayer is engaged in manufacturing operations at its retail gasoline stations with the dispensing pumps and underground tanks. Instead, it is the Department’s position, as indicated above, the dispensing pumps and underground storage tanks are more properly classified as storage and delivery systems utilized subsequent to the conclusion of the manufacturing process by a refinery. Therefore, these items would not qualify for the exemption from tax provided under s. 212.08(5)(b), F.S., and Rule 12S-1.096, F.A.C. (emphasis in original) On March 21, 2018, Southeast Petro filed a Petition for Reconsideration contesting the Notice of Decision of Refund Denial. With the Petition for Reconsideration, Petitioner provided, along with some other documentation, a schedule of the transactions at issue; the assignment of rights to refund from each of the selling dealers to which sales tax were paid; the corresponding invoices; the application for temporary exemption permit (DR-1214); and an explanation of how the refund amount was computed. On August 22, 2018, the Department issued its Notice of Reconsideration of Refund Denial, fully sustaining its denial of Southeast Petro’s refund claim. In its Notice of Reconsideration of Refund Denial, the Department reiterated its position stated in the NOD, and added the following statement: For both of the exemptions sought by Taxpayer, the Department acknowledges Taxpayer has submitted an Application for Temporary Tax Exemption Permit, form DR-1213, a reconciliation spreadsheet of the refund claimed, proper [sic] executed Assignment of Rights to Refund of Sales Tax, and various invoices for review and consideration. However, this information is not germane to the refund claim, because the dispensing pumps and underground storage tanks are not qualifying industrial machinery and equipment under the provisions of s. 212.051, F.S. and s. 212.08(5)(b), F.S. On October 19, 2018, Southeast Petro filed its Petition for Chapter 120 Hearing, contesting the Notice of Reconsideration. The case was referred to the Division of Administrative Hearings on November 6, 2019. Southeast Petro paid sales taxes on the purchases of underground storage tanks and dispensing pumps to the vendors supplying the equipment. Those vendors then provided to Southeast Petro Assignment of Rights to Refund of Sales Tax forms, identifying the amount of tax for which they assigned the rights to Southeast Petro. Central Industries, Inc., sold dispensing pumps to Southeast Petro, and on August 23, 2017, assigned the rights to Southeast Petro for refund of the taxes it collected. The amount assigned for transactions occurring from May 1, 2015, through April 30, 2017, is $52,592.92. Guardian Fueling Technologies, LLC, sold dispensing pumps to Southeast Petro, and on August 23, 2017, assigned the rights to Southeast Petro for refund of taxes it collected. The amount assigned for transactions occurring from May 1, 2015, to April 30, 2017, is $41,593.82. Guardian Fueling Technologies, LLC, also executed an assignment of rights for a purchase made in March 2015, where the tax paid was $36,269.31. Sunoco, LLC, sold dispensing pumps to Southeast Petro, and on September 14, 2017, assigned the rights to Southeast Petro for refund of taxes it collected. The amount assigned for transactions occurring from May 1, 2015, to April 30, 2017, is $8,953.41. Modern Welding Company of Florida, Inc., sold underground storage tanks to Southeast Petro, and on June 29, 2015, assigned the rights to Southeast Petro for refund of the taxes it collected. The amount assigned for transactions occurring from June 2012 to March 2015 was $16,646.00. It is noted that this assignment covers purchases that extend back past the refund period. When Southeast Petro originally filed its application for a refund, the requested amount was over $146,000. Over the course of the litigation, Southeast Petro withdrew its claim for refund with respect to some of its sites. The relevant information presented to substantiate the refund claim for each location for which a refund is still sought is listed below. With each transaction, the information presented is taken from the records provided, as opposed to the composite spread sheets. Fractions of a gallon have been discarded in the calculations, as they do not affect the percentages reached. Site 21 Site 21 is an affiliate site located at 5230 University Boulevard, Jacksonville, Florida. Guardian Fueling Technologies sold Southeast Petro four Gilbarco dispensing pumps. The invoice dated October 14, 2016, indicates that it was billed to “M&R Enterprises of Brevard/Southeast Petro.” The total amount invoiced was $58,747.76, and the tax paid for the purchase was $3,585.56. The invoice was paid by M&R United, Inc. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. The dispensing pumps were installed by Petroleum Technicians, Inc., on or about December 22, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 21 sold approximately 675,257 gallons of fuel. In the 12-month period following the installation, from January 1, 2018, through December 31, 2018, Site 21 sold approximately 754,287 gallons of fuel, for an increase in sales of 11.7%. With respect to mid-grade blended fuel, in the 12 months prior to the installation, Site 21 sold 47,891 gallons, as opposed to 63,224 gallons for the identified 12-month period after installation, for an increase in sales of 32%. Site 99 Site 99 is an affiliate site located at 1600 Aurora Road, in Melbourne, Florida. Southeast Petro bought new Gilbarco dispensing pumps and related hardware for Site 99 as part of a bulk purchase from Guardian Fueling Technologies. The four dispensing pumps bought as part of the bulk purchase for Site 99, cost $56,574, with corresponding tax of $3,960.18. The invoice, dated March 24, 2015, is billed to M&R Enterprise of Brevard/Southeast Petro. The dispensing pumps were installed by Petroleum Technicians, Inc., on or about May 24, 2015. In the 12 months prior to installation, Site 99 sold approximately 656,820 gallons of fuel. In a 12-month period following the installation, from August 2015 through July 2016, Site 99 sold approximately 693,009 gallons of fuel, for an increase of 5.51%. With respect to mid-grade blended fuel, from September 2014, through May 2015, Site 99 sold 16,733 gallons. The records submitted in Petitioner’s Exhibit 33 identifies gasoline sold for the period comprising May through August 2014 on a single page. There is no legend for the types of gasoline sold on this page, and the gas code found in other records corresponding to mid- grade blended gasoline does not appear, so a total for mid-grade fuel sold during the 12-month period cannot be clearly identified. The records are not sufficient to show 12 contiguous months of production or sale of mid-grade fuel. Site 101 Site 101 is an affiliate site located at 6842 Wilson Boulevard, Jacksonville, Florida. Southeast Petro bought four new Gilbarco dispensing pumps from Central Industries. The invoice, dated January 4, 2017, is billed to Southeast Petro. The total amount invoiced is $55,813.49, and the tax paid is $3,157.84. The invoice includes charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/ graphics. The dispensing pumps were installed by Petroleum Technicians, Inc., on February 9, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 101 sold approximately 659,658 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 101 sold approximately 836,764 gallons of fuel, for an increase of 26.85%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 101 sold 72,575 gallons, as opposed to 86,312 gallons for the period selected, for an increase of 18.93%. Site 122 Site 122 is an affiliate site located at 700 Columbia Boulevard in Titusville, Florida. Central Industries, Inc., sold Southeast Petro five new Gilbarco dispensing pumps and related hardware. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced is $70,806, and the sales tax paid is $4,006.49. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. The new dispensing pumps were installed by Petroleum Technicians, Inc., on January 19, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 122 sold approximately 1,208,313 gallons of fuel. In the selected 12-month period following the installation, from February 2017 through January 2018, Site 122 sold approximately 1,310,010 gallons of fuel, for an increase of 8.42%. With respect to mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 122 sold 67,918 gallons, as opposed to 58,940 gallons for the identified 12-month period after installation. As sales of this grade of fuel actually went down, mid-grade fuel did not see an increase of 5%. Site 234 Site 234 is an affiliate site located at 3860 Highway A1A in Melbourne, Florida. Central Industries, Inc., sold Southeast Petro six new Gilbarco dispensing pumps and related hardware. The invoice, dated January 4, 2017, is billed to Southeast Petro. The total amount invoiced is $84,404.90 and the sales tax paid is $4,776.22. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and the Mobil image. Petroleum Technicians, Inc., installed the new dispensing pumps on January 13, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 234 sold 582,758 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 234 sold 639,150 gallons of fuel, for an increase of 9.68%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 234 sold 37,702 gallons, as opposed to 43,842 gallons for the post-installation period selected, for an increase in sales of 16.29%. Site 320 Site 320 is an affiliate site located at 4353 West Main Street in Mims, Florida. Central Industries sold Southeast Petro four new dispensing pumps and related hardware for this site. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced is $54,329.49, and the sales tax paid is $3,073.84. Additional hardware was invoiced for this site on January 20, 2017, for $1,484.00, and sales tax paid of $84.00. The total for the combined invoices is $55,813.49, with total sales tax of $3,157.84. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and the BP image. Petroleum Technicians, Inc., installed the new dispensing pumps on January 18, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 320 sold 1,135,378 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 320 sold approximately 1,200,945 gallons of fuel, for an increase of 5.77%. With respect to mid-grade blended fuel, in the 12 months prior to the installation of the new dispensing pumps, Site 320 sold 33,106 gallons, as opposed to 36,235 gallons for the period selected, for an increase in sales of 9.45%. Site 343 Site 343 is an affiliate site located at 4090 West Midway Road in Fort Pierce, Florida. Central Industries, Inc., sold Southeast Petro six Gilbarco dispensing pumps and related hardware. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total amount invoiced for the six dispensing pumps is $84,404.90, and the sales tax paid is $4,776.22. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. There is a second invoice for Site 343 from Central Industries, Inc., for the purchase of a Gilbarco diesel dispensing pump. However, this pump does not have the blending capability of the other pumps purchased, and Petitioner acknowledges it would not support the criteria for a new and expanding business exemption, so it is not included. Petroleum Technicians, Inc., installed the six dispensing pumps on February 23, 2017. In the 12 months prior to the installation of the new dispensing pumps, Site 343 sold 1,107,473 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 343 sold 1,289,854 gallons of fuel, for an increase of 16.47%. With respect to the mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 343 sold 47,811 gallons, as opposed to 57,614 gallons for the post-installation period selected, for an increase of 20.5%. Site 346 Site 346 is an affiliate site located at 1595 Island Lane in Orange Park, Florida. Guardian Fueling Technologies sold Southeast Petro eight Gilbarco dispending pumps and related hardware for Site 346. The invoice, dated November 25, 2016, is billed to M&R Enterprises of Brevard/Southeast Petro. The total amount invoiced for the eight dispensing pumps is $118,047.12, and the sales tax paid is $7,722.72. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. Petroleum Technicians, Inc., installed the eight new dispensing pumps for Site 346 on December 29, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 346 sold 1,004,375 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 346 sold approximately 1,084,628 gallons of fuel, for an increase of 7.99%. With respect to the mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 346 sold 70,508 gallons, as opposed to 84,059 gallons for the selected post-installation period selected, for an increase of 19.22%. Site 349 Site 349 is an affiliate site located at 11555 Bonita Beach Road Southeast, in Bonita Springs, Florida. Guardian Fueling Technologies sold Southeast Petro four Gilbarco dispensing pumps and related hardware for Site 349. The invoice, dated October 14, 2016, is billed to M&R Enterprise of Brevard/Southeast Petro. The total amount invoiced for the four dispensing pumps is $56,928.61, and the sales tax paid is $3,474.53. The invoice includes references to ancillary features, such as a color screen and an HCR card reader for EMV, but the prices for those items are not listed separately. Guardian Fueling Technologies also installed these pumps on November 18, 2016. In the 12 months prior to the installation of the new dispensing pumps, Site 349 sold 702,975 gallons of fuel. In the selected 12-month period following the installation, from January through December 2018, Site 349 sold approximately 815,819 gallons of fuel, for an increase of 16.05%. With respect to mid-grade blended fuel, in the 12 months prior to installation of the new dispensing pumps, Site 349 sold 66,228 gallons, as compared to 85,116 gallons for the selected post-installation period, for an increase in sales of 28.52%. Site 355 Site 355 is an affiliate site located at 2653 Boggy Creek Road in Kissimmee, Florida. Southeast Petro bought six Gilbarco dispensing pumps and related hardware from Guardian Fueling Technologies as part of a bulk purchase. The invoice, dated March 24, 2015, is billed to M&R Enterprises of Brevard/Southeast Petro. For the pumps and equipment purchased for Site 355, the cost for the pumps (pretax) was $83,738.00, and the sales tax was $5,861.66. Petroleum Technicians, Inc., removed the old pumps and installed the new dispensing pumps on April 27, 2015. For the period from September 1, 2014, through March 31, 2015, Site 355 sold 646,383 gallons of fuel. Only seven months of data is included because Southeast Petro and its affiliated companies did not own the site for a full year before the new pumps were installed, and the gas station was closed before ownership was transferred. No evidence was submitted regarding how long the station was closed prior to purchase. The evidence presented does not provide 12 contiguous months of production or sales records prior to installation of the new equipment. Site 385 Site 385 is an affiliate site located at 420 United States Highway 1, in Vero Beach, Florida. Central Industries, Inc., sold Southeast Petro five new Gilbarco dispensing pumps and related hardware. The invoice, dated October 28, 2016, is billed to Southeast Petro. The total cost of the invoice, including tax, is $69,305.34, and the sales tax paid is $4,457.57. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and Exxon graphics. There is an additional invoice for this site dated October 27, 2016, for hanging hardware. The total of this invoice is $2,176.69, with sales tax paid of $127.00. Petroleum Technicians, Inc., installed the dispensing pumps on March 7, 2017. For the 12-month period prior to installation, Site 385 sold 599,935 gallons of fuel. For the selected 12-month period following the installation, January through December 2018, Site 385 sold 630,265 gallons, for an increase of 5.06%. With respect to the mid-grade blended fuel, for the 12 months prior to installation, Site 385 sold 39,588 gallons, as opposed to 45,098 gallons for the post-installation period selected, for an increase of 13.92%. Site 403 Site 403 is an affiliate site located at 5385 Timuquana Road in Jacksonville, Florida. Central Industries, Inc., sold Southeast Petro four Gilbarco dispensing pumps and related hardware for this location. The invoice, dated January 4, 2017, bills Southeast Petro for the purchase. The total billed is $55,813.49, with sales tax paid of $3,157. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. Petroleum Technicians, Inc., installed the dispensing pumps on March 28, 2017. Southeast Petro’s affiliate owned Site 403 for only nine months prior to the installation of the dispensing pumps by Petroleum Technicians, so Southeast only submitted sales data for the nine months prior to the installation that an affiliate owned the location. Unlike Site 355, it is not clear whether the site was closed prior to the installation of the new pumps or simply changed ownership. For the nine months provided, Site 403 sold a total of 139,319 gallons of fuel. Using an average of gallons sold for that period, it is estimated that a year’s worth of sales would be approximately 185,759 gallons. For the selected post-installation period, January through December 2018, Site 403 sold 395,300 gallons of fuel. However, Petitioner did not provide 12 contiguous months of production or sales records prior to the installation of the new dispensing pumps. With respect to the mid-grade blended fuel, for the nine months the affiliated entity owned Site 403 prior to installation, it sold 11,362 gallons. Twelve contiguous months of records related to mid-grade fuel were not provided. JQ Trading JQ Trading is not an affiliate entity. It is an independent dealer location owned by Mills Chevron, LLC, located at 900 Mills Avenue in Orlando, Florida, to whom Southeast Petro sells fuel and has a dealer supply agreement. Pursuant to that dealer supply agreement, Southeast Petro supplies the pumps and related equipment in addition to delivering fuel to the site. Central Industries, Inc., sold Southeast Petro two new Gilbarco dispensing pumps and related hardware for JQ Trading. The invoice, dated January 5, 2017, is billed to Southeast Petro. The total cost of the invoice is $28,616.41, and the sales tax paid is $1,618.38. Included in the invoice are charges for ancillary items not involved in the blending process, such as speakers, hybrid card readers, and image/graphics. Petroleum Technicians, Inc., installed the dispensing pumps on January 30, 2017. Southeast Petro’s records show no gasoline sales for January 2017. For the 12 months preceding January 2017, JQ Trading sold 270,977 gallons of fuel. For the selected 12-month period following the installation, March 2017 through February 2018, JQ Trading sold 291,177 gallons, for an increase of 7.45%. Petitioner did not submit adequate documentation to determine the amount of mid-grade gasoline sold or the percentage of change. Aahan/Citrus Aahan/Citrus is an independent dealer location owned by Aahan, Inc., and located at 9548 North Citrus Springs Boulevard in Citrus Springs, Florida. Sunoco, LLC, sold Southeast Petro one dispensing pump for this location. The invoice, dated July 15, 2016, is billed to Southeast Petro. The total billed is $12,041.60, and the sales tax paid is $681.60. Southeast Petro acknowledges that it did not submit the invoice for the installation of the dispensing pump, but Mr. Clark, the owner of Petroleum Technicians, testified credibly that he installed the pump. The invoice indicates that the ship date for the dispensing pump was July 15, 2016. Mr. Clark also testified that installation can take place immediately after dispensing pumps are shipped, or as much as six months later, so relying on the ship date as the installation date is unrealistic. In the end, it does not matter, because regardless of when the dispensing pumps were installed, the increase in sales compared to the selected 12-month post- installation period is more than five percent. More specifically, the selected post-installation period is January through December 2018, and during that period, Aahan/Citrus sold 334,546 gallons of fuel. Assuming that the installation occurred within six months of the invoice, consistent with Mr. Clark’s testimony, the pre-installation comparators and the percentage increases are as follows: August 2015 - July 2016: 203,669 gallons, for a 64.26% increase; September 2015 - August 2016: 203,675 gallons, for 64.24% increase; October 2015 - September 2016: 203,960 gallons, for a 64.03% increase; November 2015 - October 2016: 195,340 gallons, for a 71.26% increase; December 2015 - November 2016: 202,772 gallons, for 64.99% increase; or January 2016 -December 2016: 202,779 gallons, for a 64.98% increase. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. Snappy Food Mart Snappy Food Mart is an independent dealer location located at 1716 Oceanshore Boulevard in Ormond Beach, Florida. Sunoco, Inc., sold Southeast Petro three Gilbarco dispensing pumps for this location. The invoice, dated November 30, 2015, with a ship date listed as the same day, is billed to Southeast Petro. The total cost of the invoice is $35,189.73, with sales tax paid of $2,147.73. Like Aahan/Citrus, the installation invoice could not be located, although Mr. Clark testified that his company installed the pumps. As noted above, since pumps are sometimes installed up to six months after purchase, using the ship date (or the day after) as the installation date is unrealistic. The total gallons of fuel sold for the selected post-installation period of January through December 2018 is 251,355 gallons. Using the scenarios outlined below, the percentage increase for each is still over five percent. December 2014 – November 2015: 205,142 gallons,, for a 22.53% increase; January 2015 – December 2015: 200,807 gallons, for a 25.17% increase; February 2015 - January 2016: 201,664 gallons, for a 24.64% increase; March 2015 – February 2016: 198,116 gallons, for a 26.87% increase; April 2015 – March 2016: 214,614 gallons, for a 17.12% increase; or May 2015 – April 2016: 212,416 gallons, for an 18.33% increase. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. Zack’s Zack’s is an independent dealer location owned by Zack’s Oil Enterprises, LLC, and located at 4201 Southwest 64th Avenue, in Davie, Florida. Southeast Petro purchased four dispensing pumps and related hardware for Zack’s from Sunoco, LLC, at a total cost of $45,444.32, with tax paid of $2,572.32. The invoice, dated October 6, 2014, is billed to Southeast Petro. Unlike other vendors for dispensing pumps, Sunoco issues its invoices after it ships the pumps, so, according to Summit Shah, pumps purchased from Sunoco are sometimes installed prior to the date on the invoice. In this case, the invoice from Petroleum Technicians, Inc., indicates that the dispensing pumps were installed August 24, 2015. Petitioner submitted gasoline sales records from September 2014 forward. The Dealer Supply Agreement for this location was assigned to Southeast Petro in July 2015, shortly before the installation of the new dispensing pumps. For the period beginning September 1, 2014, through August 30, 2015 (with no sales in August 2015), Zack’s sold 697,198 gallons of fuel. For the selected 12-month post-installation period, January through December 2017, Zack’s sold 743,104 gallons of fuel, for an increase of 6.58%. No records were submitted from which the sales of mid-grade blended fuel can be identified or the percentage of increase, if any, can be determined. BAM BAM is also an independent dealer location to whom Southeast Petro supplies fuel, and is located at 500 Highway A1A, in Satellite Beach, Florida. Southeast Petro purchased three dispensing pumps and related hardware for BAM from Sunoco, Inc. The invoice, dated July 1, 2013, is billed to Southeast Petro and lists a total of $35,024.52, with sales tax paid of $1,982.52. However, the assignment of rights from Sunoco, LLC, only covers sales tax paid from May 1, 2015, to April 30, 2017. Without an assignment of rights for the time period when these dispensing pumps were purchased, they cannot form the basis for a refund of the taxes paid. All of the records regarding fuel sold at each location described above were submitted for the purpose of establishing “production.” However, the records do not reflect production of any product, but rather, the volume of sales experienced at each location prior to and after the installation of the new dispensing pumps. While it is clear that overall sales at each location increased more than 5%, sometimes markedly so, the records submitted do not establish changes in production. Moreover, inasmuch as Petitioner is not contending that it “manufactures, processes, compounds or produces” premium or regular unleaded gas, sales records related to these products that Southeast Petro distributes, as opposed to manufacturing, processing, compounding, or producing, cannot establish production increases. Based upon all of the evidence presented, the more persuasive and compelling evidence is that the dispensing pumps provide a valuable improvement in the delivery of fuel to the customer, but are not a part of the production of the fuel itself. Petro also purchased two storage tanks from Modern Welding, for which they paid a total of $95,529.50 and sales tax of $5,454.50. However, unlike the dispensing pumps, storage tanks do not contribute to the “making” of a different octane-rated fuel. The evidence presented indicates that the storage tanks’ primary purpose is to store the gasoline held at each fuel location until the fuel is purchased by a customer. The tanks, like the dispensing pumps, are part of the delivery system for fuel as opposed to its production. Both tanks were installed at locations that were new businesses at the time of installation. Therefore, no prior production records for these locations were submitted.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner’s Application for Refund as a new or expanding business be denied, and its Petition for Chapter 120 Hearing be dismissed. DONE AND ENTERED this 19th day of October, 2020, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON 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 19th day of October, 2020. COPIES FURNISHED: Gerald J. Donnini, II, Esquire Moffa, Sutton & Donnini, P.A. Trade Center South, Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) Mark S. Hamilton, General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed) John Mika, Esquire Office of the Attorney General Plaza Level 01 The Capitol Tallahassee, Florida 32399-1050 (eServed) Rex D. Ware, Esquire Moffa, Sutton & Donnini, P.A. Suite 330 3500 Financial Plaza Tallahassee, Florida 32312 (eServed) Paula Antonovna Savchenko, Esquire Moffa Sutton & Donni, P.A. Suite 930 100 West Cypress Creek Road Fort Lauderdale, Florida 33309 (eServed) James A. Zingale, Executive Director Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 (eServed)
The Issue The issue presented here concerns the alleged violation of the Antiknock (Octane) Index, Rule Subsection 5F-2.01(1)(i), Florida Administrative Code. In particular, tide Respondent is accused of having gasoline in a pump labeled as "premium leaded" which carried an octane reading of 91.9 at a time when the registration for "premium leaded" on file with the Department of Agriculture and Consumer Services indicated a rating of 95 octane. FINDINGS OF FACT 1/ On April 14, 1981, an employee of the Petitioner went to the Sunshine- Jr. Stores, Inc.'s, Store No. 335, located at Highway 40 and Interstate 75, in Marion County, Florida, for purposes of inspecting gasoline products being dispensed from that facility. One of the pumps at the store was labelled "premium leaded" gasoline and carried an octane rating on the pump as 91.5. (This octane rating was the same as was displayed on February 26, 1981, the date of the last inspection, when a sample test revealed a rating of 94.4.) The April 14, 1981, sample of fuel taken from the pump marked premium leaded," 91.5 octane, was analyzed, and the octane rating was shown to be 91.9. On April 14, 1981, the date of the more recent test, the Antiknock Index (Octane) in the sworn registration by the Respondent on file with the Petitioner, indicated that the "premium leaded" gasoline being dispensed was 95 octane. In view of the fact that the difference between the test reading taken on April 14, 1981, from the "premium leaded' pump, and that reading registered with the Petitioner exceeded the factor (1), to the extent of being a (3.1) factor, a claim was brought against the Respondent by the Petitioner based upon the alleged violation of Rule Subsection 5F-2.01(1)(i), Florida Administrative Code. The action was in the form of a Stop Sale Notice. The fuel was then released to the Respondent upon the basis of a Release Notice or Agreement, by which the Petitioner received a $1,000.00 bond in the form of a cashier's check, in lieu of the confiscation of the gasoline in the "premium leaded" pump. Subsequent to the inspection of April 14, 1981, in which the gasoline was sampled in the pump marked "premium leaded," that dispenser has been relabelled to reflect "oremium unleaded" fuel and the octane rating displayed on the pump continues to be 91.5.
Recommendation The facts presented in this cause show that the customers of the Respondent were not being told that the "premium leaded" fuel that they were being sold carried a 95 octane rating, instead, the rating shown was 91.5, which was less than the 91.9 reading found in testing the fuel extracted. In addition, the Respondent eventually took steps to identify for the public the fact that the fuel in the tank was unleaded and not leaded fuel. The reason for delay is explained in comments by the Respondent's representative offered in mitigation of any penalty to be imposed. He stated that the problem with labe11ing had occurred after an attempt on the Respondent's part to switch from "premium leaded" fuel to premium unleaded" fuel had been delayed, causing a concern that the amount of "premium leaded" remaining in the tank when the transition period occurred not contaminate the "premium unleaded" fuel that was being used to replace the former "premium leaded" and mislead a customer by causing him to believe that he was receiving "premium unleaded," when he was in fact receiving a blend of premium fuel containing lead. Technically, the Respondent dispensed fuel from a pump labelled "premium leaded" which was below standards when contrasted with the sworn registration Antiknock Index (octane); however, in view of the fact that the pump indicated an octane rating lower than the test rating on April 14, 1981, it is, RECOMMENDED: That no assessment be made and that the bond amount of $1,000.00 be returned to the Respondent. DONE and ENTERED this 30th day of July, 1981, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1981.
Findings Of Fact The Golden Lariat is a service station in the business of selling regular, regular unleaded, and unleaded premium gasoline to the public. Each type of gasoline is stored in separate underground tanks by the Golden Lariat at its place of business at the intersection of State Road 69 and Interstate 10 in Jackson County, Florida. On July 23, 1987, James Hall visited the station to do an unannounced routine inspection of the premises. When he pulled up in his vehicle, he saw a hose running from the unleaded regular tank to the unleaded premium tank. The hose was connected to a small pump which in turn was hooked to Respondent's 12 volt battery. The pump was not running at the time Mr. Hall conducted his inspection. In view of what he had witnessed, Mr. Hall decided to check the gasoline Respondent was offering for sale to the consuming public from its tanks and related gasoline pumps. Mr. Hall was particularly interested in the results the lab would obtain on the premium-unleaded gas. He took samples of all three types of gasoline offered for sale by Respondent. The samples were forwarded to the Department's laboratory in Tallahassee and were tested to determine whether they met departmental standards for each type of gasoline. The antiknock index or octane rating that the premium unleaded gasoline tested at was 88.6 or 2.4 units lower than departmental requirements. The premium unleaded should have had an octane rating of 91 or higher in order to meet departmental standards. The results strongly indicated that the unleaded premium had been mixed with a lower octane gas such as regular unleaded, thereby yielding a lower average octane rating for the premium unleaded. The regular unleaded gasoline had an octane rating of 87.3. When Mr. Hall questioned one of the owners of the Golden Lariat, Mr. Bowan, Mr. Bowan indicated he was pumping water with the pump. Mr. Hall testified that pumping water would not be unusual since the station had had problems with water infiltration into its gasoline storage tanks in the past. However, an owner would not pump water from one tank into another tank as was indicated by what Mr. Hall had seen. The evidence clearly establishes that the Golden Lariat intentionally mixed its unleaded premium with its unleaded regular gasoline. This was done in an attempt to sell an otherwise cheaper and lower grade gasoline to the consuming public compared to the gasoline the Golden Lariat represented the consumer was buying. In light of the above facts the Department elected to allow the Golden Lariat to post a $1,000 bond in lieu of confiscation of the 1,700 gallons of gas in the unleaded premium tank. The bond was posted on August 24, 1987, and the gasoline was subsequently removed. No evidence was presented by petitioner as to the amount of gasoline sold by respondent out of the unleaded premium gasoline tank. However, Respondent did not appear at the hearing after notice was mailed to him on March 22, 1988. The notice was mailed well in advance of the hearing and afforded Respondent adequate warning of the upcoming hearing. By failing to appear at the hearing after adequate notice, Respondent is deemed to have abandoned its claim to a refund; and therefore, Respondent is not entitled to a refund of any portion of the bond it posted in lieu of confiscation. Rule 22I-6.022, Florida Administrative Code.
