Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner, Christian Television Corporation, is a not for profit Florida corporation formed in April of 1977. It is exempt from federal income taxation under Section 501(c)(3) of the Internal Revenue Code (1954). Its first application for a Florida Consumer's Certificate of Exemption was initially denied by the Department of Revenue in December of 1977. After petitioner was successful in a rule-challenge proceeding to a portion of the Department's rules defining a "church", the Department reversed its initial decision and issued the petitioner a Consumer's Certificate of Exemption. Based on that issuance, petitioner dismissed its request for a formal administrative hearing regarding the initial denial of exempt status. In 1983, the Legislature enacted Section 212.084, Florida Statutes, which required the Department of Revenue to review every sales tax exemption certificate issued before July 1, 1983, to ensure that the possessor of the certificate was actively engaged in an exempt endeavor. The Department was given the authority to revoke the certificates of those entities found to be no longer qualified for an exemption. Section 212.084(3), Florida Statutes. Pursuant to this statute, the respondent notified the petitioner that an application for renewal of its previously issued Certificate would be required. Petitioner submitted such an application and the respondent gave notice of its intent to revoke petitioner's Certificate effective January 29, 1986. According to its Articles of Incorporation, the petitioner was organized "to produce and broadcast to the general public religious television and radio programs and thereby educate and instruct the general public in religious matters, and make available guidance to promote the general public welfare..." In furtherance of this purpose, the petitioner operates a facility in Largo, Florida, in a 43,000 square foot building. The building contains two television broadcasting studios, control rooms, storage rooms, administrative offices, a counseling area and a chapel. The petitioner views its purpose as one of assisting churches of all denominations in presenting the gospel to the community. It produces many programs in its Largo studios and considers these programs to be ministries in themselves. Live audiences are often present in the studios, which can accommodate from 30 to 100 people, depending upon the program. For example, during the production of "Joy Junction", children from various Christian schools in the area attend the taping. Senior adults come to the Largo studios to attend the "Action Sixties" program, and single adults attend the taping of "Solo Act". In addition, the petitioner sells air time to local churches and ministries. The petitioner also conducts benevolence activities in cooperation with area churches and local agencies. These include fund-raisers for other ministries and raising money or collecting clothing and food for the needy. Petitioner provides on-air announcement services for area churches and ministerial associations and allows other ministries to utilize its broadcasting facilities. Petitioner's staff also attempts to work with "non-Christian people" within the community and "pass them through our ministry into other churches". The petitioner provides a telephone counseling service from its Largo facility. For this purpose, it utilizes 45 regular, and 100 substitute, volunteer counselors. These counselors are trained by petitioner's staff, and callers receive Biblical answers to their questions and problems. Many who call in want prayer for some particular need. Callers perceived to have a more severe problem are referred to a Christian counselor in the area. Approximately 32,000 calls per year are received on petitioner's "prayer lines". The petitioner's staff includes two ministers. One serves as the director of the benevolence ministry and the counseling department, and the other serves as director of community ministries and does the liaison work with other churches. Both were previously Pastors of their own churches, and feel that Christian Television is as much or more of a "church" as the more traditional churches they formerly pastored. They described the use of video technology as an advantage and an asset, rather than as a substitute for more traditional forms of religious training. Worship services are conducted in the petitioner's chapel by both the staff ministers and other volunteer or paid ministers. The chapel, containing 1200 square feet and having a seating capacity of about 150, has high ceilings and contains an organ, an altar, a pulpit and chairs. The estimated value of the assets within the chapel is ten or twenty thousand dollars. The chapel is actively utilized during the week for staff devotionals and communion services, and is open to the public for special services and advertised programs conducted by those using a Biblical approach. Other approved ministries are permitted to utilize the chapel without charge for Bible studies or special prayer times. The chapel is not used as a production or broadcasting studio. As of December 31, 1983, the value of petitioner's assets, including plant, property and equipment, was $2,185,564.00. During 1983, petitioner received contributions totalling $1,137,000.00, and realized slightly more than one million dollars in revenue by providing broadcast and production time to various religious organizations.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that petitioner's Consumer Certificate of Exemption be reissued for a period of five (5) years. Respectfully submitted and entered this 6th day of October, 1986. 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 6th day of October, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0456 The proposed findings of fact submitted by the petitioner and the respondent have been carefully considered and are accepted and/or incorporated in this Recommended Order, except as noted below: Petitioner: 3 - 5. Recitations of testimony accepted as correct, but not included as factualfindings. 7. Partially rejected as argument as opposed to factual findings. COPIES FURNISHED: Jon H. Anderson, Esquire NCNB Bank Building 5001 South Florida Avenue Lakeland, Florida 33803 Edwin A. Bayo, Esquire Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32301 Randy Miller Executive Director Department of Revenue 102 Carlton Building Tallahassee, Florida 32301 William D. Townsend General Counsel 104 Carlton Building Tallahassee, Florida 32301
The Issue The issue presented is what is Peaches' basis in the Sterling stock?
Findings Of Fact There is no dispute as to the material facts in the instant case, Exhibit 1 presented at the hearing is a composite exhibit which is comprised of the Petitioner's U.S. Corporate Income Tax Return and Florida Corporate Income Tax Return for the fiscal year ending June 30, 1973. Exhibit 3 is the Respondent's document entitled "Income Tax Audit Changes" which reflects the adjustments made by the Respondent based upon a review of the Petitioner's return and the reasons for assessing the deficiency. Exhibit 2 is a composite exhibit comprised of the Petitioner's Amended Protest of the proposed deficiency and the Respondent's letter denying the same. Petitioner's federal return (Exhibit 1) Schedule D, Part II, reflects the 31,500 shares were acquired in 1958 at a cost basis of $10,191.00. These shares were subsequently sold by Peaches in 1972 for $1,160,131.00 or a gain of $1,149,940.00. This gain was reported on line 9(a) of the federal tax return as a portion of the "net capital gains." On its 1973 Florida Corporate Income Tax Return, Petitioner computed the income using the basis for the stock as of January 2, 1972, thereby reducing its reported income by $1,013,040.00 from the federal tax. The $1,013,040.00 reflects the amount of appreciation in the value of the stock between the transferrer's acquisition and January 1, 1972, the effective date of the Florida corporate income tax code. The shares of stock of Sterling Drugs were acquired by Peaches in 1971 from the controlling stockholder who made a contribution to capital to the corporation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer recommends that the Petitioner's petition be denied and that the assessment against the Petitioner in the amount of $29,435.00 together with interest be assessed. DONE and ORDERED this 22nd day of January, 1979, in Tallahassee, Florida. STEPHEN F. DEAN Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Edwin J. Stacker Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, Florida 32304 James S. Moody, Jr., Esquire Trinkle and Redman, P.A. 306 West Reynolds Street Plant City, Florida 33566 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA, DEPARTMENT OF REVENUE TALLAHASSEE, FLORIDA PEACHES OF FLORIDA, INC. Petitioner, vs. CASE NO. 78-1433 STATE OF FLORIDA, DEPARTMENT OF REVENUE, Respondent. / NOTICE TO: JAMES S. MOODY, JR., ESQUIRE ATTORNEY FOR PETITIONER TRINKLE AND REDMAN, P. A. 306 WEST REYNOLDS STREET PLANT CITY, FLORIDA 33566 E. WILSON CRUMP, II, ESQUIRE ATTORNEY FOR RESPONDENT ASSISTANT ATTORNEY GENERAL POST OFFICE BOX 5557 TALLAHASSEE, FLORIDA 32304 You will please take notice that the Governor and Cabinet of the State of Florida, acting as head of the Department of Revenue, at its meeting on the 5th day of April, 1979, approved the Recommended Order of the Hearing Officer dated January 22, 1979, with paragraph 3 of the "Findings of Fact" therein amended to read as follows: "The shares of stock of Sterling Drugs were acquired by Peaches in 1972 from the controlling stockholder who made a contribution to capital to the corporation", in accordance with Stipulation of the Petitioner and Respondent filed in the case on March 1, 1979. This constitutes final agency action by the Department of Revenue. JOHN D. MORIARTY, ATTORNEY DIVISION OF ADMINISTRATION DEPARTMENT OF REVENUE STATE OF FLORIDA ROOM 104, CARLTON BUILDING TALLAHASSEE, FLORIDA 32304 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing Notice was furnished by mail to James S. Moody, Jr., Esquire, Trinkle and Redman, P. A., 306 West Reynolds Street, Plant City, Florida 33566, Attorney for Petitioner; by hand delivery to Wilson Crump, II, Esquire, Assistant Attorney General, Post Office fox 5557, Tallahassee, Florida 32304, Attorney for Respondent and Stephen F. Dean, Hearing Officer, Division of Administrative Hearings; Room 530, Carlton Building, Tallahassee, Florida this 5th day of April, 1979. JOHN D. MORIARTY, ATTORNEY
Findings Of Fact On a date prior to November 2, 1971, petitioner exchanged property it then held for property it now holds. This transaction resulted in a capital gain for petitioner, although recognition of the gain has been deferred for federal tax purposes. For such purposes, petitioner's basis in the property it presently holds is deemed to be the same as its basis in the property it formerly held. On its own books, however, petitioner has stated its basis in the property it now holds as the market value of the property at the time it was acquired. This figure is higher than the figure used for federal tax purposes. Working from this higher figure, petitioner states larger depreciation allowances on its own books than it claims for federal tax purposes. On its 1973 Florida corporation income tax return, petitioner claimed these depreciation allowances instead of the smaller depreciation allowances it claimed on its federal income tax return for the same period.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent assess a deficiency against petitioner based on the income not stated in its 1973 return because of its unauthorized depreciation claim, together with interest and applicable penalties. DONE and ENTERED this 2nd day of February, 1979, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph Philip Rouadi, C.P.A. 781 Wymore Road Maitland, Florida 32751 E. Wilson Crump, Esquire Post Office Box 5557 Tallahassee, Florida
Findings Of Fact Respondent issued a Notice Of Assessment And Jeopardy Findings against Jesus Abauza, also known as Jesus I. Valdez, on May 16, 1989, (the "assessment"). The assessment was made for the tax imposed on the unlawful transportation of approximately 90 kilograms of cocaine. The tax base in the assessment is the retail value of the cocaine. The retail value of the cocaine was estimated in the amount of $1,341,000 by multiplying the weight of the cocaine by the retail price listed in the Florida Department Of Law Enforcement ("FDLE") memorandum in effect at the time for Broward and Dade counties. The price per kilogram listed in the FDLE memorandum was $14,900. The FDLE memorandum became effective on May 4, 1988, and was the current price list used by the FDLE on May 8, 1989, when Petitioner was arrested and charged with possession of a controlled substance. Tax was assessed against the tax base at the rate of 50 percent and in the amount of $670,500. A 25 percent surcharge was assessed in the amount of $335,250. The total tax assessed in the amount of $1,005,750 is the sum of the amount of tax due at the rate of 50 percent and the amount of tax due for the 25 percent surcharge. An additional 50 percent penalty was assessed in the amount of $502,875. The total tax and penalty assessed in the amount of $1,508,635 is the sum of the tax due ($1,005,750) and the penalty ($502,875). A Warrant For Collection Of Delinquent Sales and Use Tax (the "warrant") and a Corrected Warrant (the "corrected warrant") was issued against Petitioner on the same day as the assessment. The warrant and corrected warrant are identical except for the addition of Petitioner's social security number in the the top right corner of the corrected warrant and a note in the right margin of the corrected warrant stating: This CORRECTED WARRANT is being re-recorded to reflect the correct amount of tax lien as being $1,005,750.00. Interest will accrue at the rate of $330.66 per day beginning 6/2/89 thru date of satisfaction of lien. 11/26/91[.] The amount stated in the assessment, warrant, and corrected warrant as the tax due is $1,005,750. The amount stated as the penalty due in all three documents is $502,875. The amount stated as the total and grand total due in all three documents is $1,508,625. The note in the right margin of the corrected warrant, however, eliminates the 50 percent penalty by stating that the corrected amount of the "tax lien" is $1,005,750. Interest accrues on the tax due at the rate of one percent per month. The amount stated in the bottom left corner of the assessment, warrant, and corrected warrant, as the "Daily Interest Rate" is $329.86. The correct per diem amount of interest is $330.66. 5/ Interest begins accruing on the 21st day of the month following the month for which the tax is due.6 The tax was initially due in May, 1989, when the assessment was issued. Although the corrected warrant states that interest accrues from "6/2/89", interest actually began accruing on June 21, 1989. The assessment was mailed to Petitioner by certified mail, return receipt requested. Petitioner received the assessment, but the date of receipt cannot be determined from the evidence of record. 7/ Petitioner unlawfully transported approximately 90 kilograms of cocaine. Petitioner was arrested by officers in the Metropolitan Dade County Police Department (the "Police Department") on May 8, 1989, and charged with possession of cocaine. In the criminal case against him, Petitioner filed a motion to suppress the evidence seized by the Police Department based upon the alleged illegality of the police officer's investigatory stop of the car Petitioner was driving. The district court denied the motion to suppress, and Petitioner successfully appealed the trial court's ruling to the United States Court of Appeals, Eleventh Circuit. The district court's denial of the motion to suppress was reversed in United States v. Valdez, 931 F.2d 1448 (11th Cir. May 22, 1991), and the case was remanded for further proceedings. The district court granted the motion to suppress and scheduled the criminal case for trial during the two week period beginning September 23, 1991. 8/ Petitioner stipulated in the Supplemental Pretrial Stipulation that he did not admit or stipulate that any of the matters set forth in the stipulation were factually correct. The findings of fact made in this Recommended Order, however, are substantially the same as the factual account contained in the official transcript of the criminal proceedings and reported by the appellate court in Valdez as the basis for its reversal of the trial court's denial of Petitioner's motion to suppress. On the afternoon of May 8, 1989, Detective Jerry Houck and Special Agent Steven Hills were conducting the surveillance of a residence (the "residence" or "house") located in Miami, Florida from an unmarked police car. Detective Houck and Special Agent Hills were part of a Police Department narcotics investigative team led by Detective Francisco Trujillo. Detective Trujillo was not personally present at the residence but monitored the events which occurred at the residence over the police radio in his unmarked vehicle. Detective Trujillo was assisted by Officer Douglas Almaguer, a uniformed police officer for the Police Department who was in a marked patrol car. Detective Houck observed a Honda Accord automobile (the "Honda") driven by Petitioner stop in front of the residence. Petitioner got out of the car, knocked on the front door of the house, and entered the residence. Detective Houck was unable to observe the events which took place inside the house. While Petitioner remained inside the house, two men later identified as Jose and Jorge Fernandez came out of the residence. They moved two cars parked in the yard and positioned the Honda so that its trunk was in close proximity to the front door of the residence. Jose and Jorge Fernandez opened the trunk of the Honda, reentered the residence, and reappeared within the next few minutes outside the house carrying plastic garbage bags which appeared to Detective Houck to be fairly heavy. The two men placed the garbage bags with their contents in the trunk of the Honda. They reentered the residence and quickly reappeared carrying additional bags which they also placed in the trunk of the Honda. Shortly thereafter, Valdez came out of the residence, got into the Honda, and drove away. Detective Trujillo advised Officer Almaguer that: [W]e were conducting an investigation and we had a vehicle we wished for him to follow, and if that person was to commit a traffic infraction which he normally cites somebody for, we wished for him to stop the vehicle. If that occurred, and he did stop the vehicle, I wanted him to ask the occupant of the vehicle for consent to search the vehicle, and I instructed him to ask if he would consent to a search. Officer Almaguer did not recall that he had been directed by Detective Trujillo to stop the Honda only for something which constituted the kind of traffic offense for which he would ordinarily stop a driver. Over the police radio, Detective Houck provided Detective Trujillo with the description and tag number of the Honda and notified Detective Trujillo when Petitioner drove away from the house. Detective Houck left his surveillance position at the residence and followed the Honda to 122nd Avenue. At that point, Detective Trujillo identified the Honda and Detective Houck confirmed the identification. As Petitioner approached the intersection of 8th Street and 122nd Avenue, Detective Trujillo was positioned across the intersection. Officer Almaguer was directly behind Detective Trujillo in his marked patrol car. Petitioner made a right turn against a red traffic light signal and violated the right-of-way of a vehicle approaching through the green traffic light signal. The approaching vehicle slowed abruptly in order to avoid a collision with Petitioner's Honda. Neither Detective Trujillo nor Officer Almaguer were able to state the speed at which the approaching vehicle was traveling before it slowed down, and neither officer heard any screeching of the tires of the approaching vehicle. Detective Trujillo advised Officer Almaguer that Petitioner was the subject of the narcotics investigation. Officer Almaguer followed the Honda for 18 blocks from the intersection where the traffic violation had occurred and then stopped Petitioner. Detective Trujillo parked two blocks away from the point of the stop and observed Officer Almaguer conduct the stop. Officer Almaguer approached Petitioner and asked for Petitioner's driver's license and registration. Petitioner produced his driver's license but stated that the car was loaned to him by a friend. Officer Almaguer asked Petitioner if Petitioner knew why he had been stopped. Petitioner answered "yes." Officer Almaguer requested permission to search the car, and Petitioner consented. Officer Almaguer found five sealed trash bags inside the trunk of the Honda. Officer Almaguer asked Petitioner what was inside the bags. Petitioner replied that it was cocaine. Officer Almaguer arrested Petitioner, handcuffed him, and placed him in the back seat of the patrol car until Detective Trujillo arrived at the point of the stop. Officer Almaguer issued Petitioner a citation for violation of the right-of-way. Detective Trujillo then advised Petitioner of his Miranda rights. Officer Almaguer's stop of Petitioner's vehicle was unreasonably pretextual, and Petitioner's consent to search was not voluntarily given. Officer Almaguer would not have pursued Petitioner's Honda, stopped it, and issued a traffic citation, but for Detective Trujillo's instructions that the Honda was the car which the narcotics investigation team wanted stopped. Officer Almaguer ordinarily did not search a vehicle for a violation of right-of-way, or even ask its driver for consent to search the vehicle. Officer Almaguer had no reason to ask for permission to search the vehicle based solely on the traffic violation he observed. Petitioner's consent to the search was tainted by the illegal, pretextual stop and detention. The contents of the five bags seized by the Police Department when Petitioner was arrested were tested by a chemist for the Police Department. The contents of the five bags weighed approximately 90 kilograms. Samples of each kilogram from the bags were tested and found to contain cocaine. The percentage of cocaine and purity of the cocaine was not determined.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order upholding the assessment of tax and interest in the amount determined by Respondent. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1992.
Findings Of Fact At all times pertinent to the matters in issue here, Bellot Realty operated a real estate sales office in Inverness, Florida. The Department of Transportation was the state agency responsible for the operation of the state's relocation assistance payment program relating to business moves caused by road building operations of the Department or subordinate entities. Frank M. Bellot operated his real estate sales office and mortgage brokerage, under the name Bellot Realty, at property located at 209 W. Main Street in Inverness, Florida since July, 1979. He operated a barber shop in the same place from 1962 to 1979. He moved out in October, 1991 because of road construction and modification activities started by the Department in 1989. The office was located in a strip mall and the other tenants of the mall were moving out all through 1990. Mr. Bellot remained as long as he did because when the Department first indicated it would be working in the area, its representatives stated they would be taking only the back portion of the building. This would have let Mr. Bellot remain. As time went on, however, the Department took the whole building, including his leasehold, which forced him out. He received a compensation award from the Department but nothing from any other entity. Though the instant project is not a Federal Aid Project, the provisions of Section 24.306e, U.S.C. applies. That statute defined average annual net earnings as 1/2 of net earnings before federal, state and local income taxes during the two taxable years immediately prior to displacement. During 1988, Mr. Bellot's staff consisted of himself and between 3 and 5 other agents from whom he earned income just as had been the case for several prior years. In 1988 his Federal Corporate Income Tax return reflected gross income of $120,843.00 and his profit was reflected as $27,377.25. The Schedule C attached to his personal Form 1040 for that year reflected gross sales of $25,078.00 with deductions of $5,250.00 for a net income of $19,828.00. Two of his agents foresaw the downturn in business as a result of the road change and left his employ during 1989. A third got sick and her working ability, with its resultant income, was radically reduced. This agent was his biggest producer. For 1989, Petitioner's tax return reflected the company's gross receipts were down to $50,935.75 and his operating loss was $5,700.03. However, the Schedule C for the 1989 Form 1040 reflected gross revenue of $21,450 with a net profit of $14,503. In 1990, the Schedule C for the Form 1040 reflected gross receipts of $5,565.00 which, after deduction of expenses, resulted in a net profit of $1,665.00 for the year. The corporate return reflects gross receipts of $23,965.96 and a net income figure from operations of $1,282.21. Mr. Bellot contends that neither 1989 or 1990 were typical business years as far as earnings go. Aside from a loss of activity and a general decline in business in Inverness, his parents, who were always in the office due to a terminal illness, caused him lost work time as he was very busy with them. He was also involved in a move and in refurbishing a house. In 1990, Mr. Bellot decided he could no longer stay in his office location due to the fact that the Department decided to take his whole building. Even if the taking had been of only one-half the building, however, it still would have put him out of business because it would have taken his parking area. At that time, the Department was rushing Mr. Bellot to vacate the premises. He was in difficult financial straits, however, and it would not have been possible for him to move but for the Department's compensation payments. As it was, he claims, the compensation was after the fact, and he had to borrow $30,000.00 in his mother's name in order to rehabilitate the building he moved into. Instead of utilizing income figures from years in which business activity was normal, the Department chose to use the income figures from 1989 and 1990, both of which were, he claims, for one reason or another, extraordinary. In doing so, since the income in those years was much lower than normal, the compensation he received was also much lower, he claims, than it should have been. He received $8,725.50. Had the 1988 and 1989 years income been used, the payment would have been $20,000.00, the maximum. He also claims the Department used the incorrect operating expense figures concerning travel expense. The Schedule C reflects a higher deduction for automobile expense for both years, arrived at by the application of a standard mileage expense approved by the Internal Revenue Service. In actuality, the expense was considerably less and, if the real figures had been used, his income would have been increased substantially for both years. Mr. Bellot's appeal was reviewed by Ms. Long, the Department's administrator for relocation assistance who followed the provisions of departmental manual 575-040-003-c which, at paragraph (IV) on page 33 of 35, requires the displacee to furnish proof of income by tax returns or other acceptable evidence. At subparagraph (e) on page 31 of 35 of the manual, the requirement exists for the displaced business to "contribute materially" to the income of the displace person for the "two taxable years prior to the displacement." If those two years are not representative, the Department may approve an alternate two year period if "the proposed construction has already caused an outflow of residents, resulting in a decline of net income. " To grant an alternative period, then, the Department must insure that the loss of income is due to the Department's construction and not to other considerations. Here, the Department's District Administrator took the position it was not it's actions which caused the Petitioner's loss of income. Ms. Long took the same position. The Department's District 5 initially notified the people of Inverness of the proposed project somewhere around 1988. The project was to straighten Main Street out through downtown Inverness for approximately 2 miles. There is no evidence as to when the first affected party moved and Ms. Long does not know whether or not the project had an adverse effect on business in downtown Inverness. Petitioner's evidence does not show that it did.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner's appeal of the Department's decision to refuse to use alternate tax years or actual mileage deduction in its calculation of a relocation assistance payment be denied. RECOMMENDED this 29th day of December, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 1992. APPENDIX TO RECOMMENDED ORDER The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: Accepted. & 3. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and, in part, incorporated herein. Rejected as not proven by competent, non-hearsay, evidence. Accepted. Not proven. Merely a statement of Petitioner's position. Accepted that Petitioner's business income dropped. It cannot be said that the road project's were the primary cause of the decline in Petitioner's business. There is no independent evidence of this. Accepted and incorporated herein. First sentence accepted. Balance not based on independent evidence of record. Not a proper Finding of Fact but a comment on the evidence. First sentence accepted. Second sentence rejected. Accepted and incorporated herein. Not a Finding of Fact but a restatement of and attempted justification of Petitioner's position. Accepted and incorporated herein. Rejected as argument and not Finding of Fact. Not a Finding of Fact but a recapitulation of the evidence. FOR THE RESPONDENT: Accepted. & 3. Accepted. - 6. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. & 10. Accepted. 11. & 12. Accepted. 13. Accepted. COPIES FURNISHED: Charles G. Gardner, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 James R. Clodfelter Acquisitions Consultant Enterprises, Inc. P.O. Box 1199 Deerfield Beach, Florida 33443 Ben G. Watts Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton Jpp. Williams General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458
Findings Of Fact Petitioner, St. Joe Paper Company, is a taxpayer subject to the requirements of the Florida Corporate Income Tax. Its principal offices are located at 803 Florida National Bank Building, Jacksonville, Florida. Petitioner filed its 1976 calendar year tax return with respondent, Department of Revenue (Department), on September 23, 1977. Although filings are normally due on April 1, the filing was made pursuant to an extension of time to and including October 1, 1977 which was granted by the Department. Petitioner was subsequently audited by the Internal Revenue Services (IRS) for calendar years 1972 through 1977. Thereafter, petitioner and IRS entered into a settlement in 1982 wherein they agreed that certain adjustments were required for each of the audited tax years. The adjustments resulted in an overpayment of the Florida Income Tax for 1976. Subsection 220.23(2) , Florida Statutes, requires that a taxpayer notify the Department whenever an IRS audit results in adjustments to the taxpayer's net income subject to the Florida corporate income tax for any taxable year. Because the IRS sett1enent affected the years 1972 through 1977, petitioner filed amended returns for those years with the Department on October 8, 1982. According to the amended returns, petitioner owed additional taxes for all years except 1976, when it had made an overpayment. It added these deficiencies, totaling $82,003.03, and subtracted the overpayment for 1976 ($18,174.10), resulting in a net tax owed the Department of $63,828.94. Petitioner also computed interest owed on its deficiencies for the years 1972-1975 and 1977 to be $39,956.58 and offset this amount with a $12,067.40 credit which it claimed was interest owed it by the Department for its overpayment of taxes for calendar year 1976. When the interest was added to the $63,828.94, the total liability was $91,718.42. The record is unclear whether petitioner calculated its 1976 interest using a 12 percent or 6 percent rate. The proper rate to be used is 6 percent. On August 5, 1983 the Department directed petitioner to appear at its Jacksonville office on August 11 to pay $12,067.40 and if it failed to do so, a tax warrant would be issued. Thereafter, on August 9 petitioner paid the deficiency. On August 15, 1983 petitioner filed an Application for Refund Form DR- 26 requesting a refund of its August 9 payment. In its application, it stated chat "(i)nterest computed on the tax refund for 1976 was offset against interest due for other years", and that the Department's refusal to allow this offset was error. On August 19, 1983 the Department's classification officer, audit classification, issued a letter denying the application on the following grounds: Florida Statutes 214.14 requires that interest be paid should the Department take longer than nine (9) months to refund an overpayment of tax. When computing interest, the Department does so under the theory that each year stands alone. Consequently, offsetting of deficiencies and overpayments is not recognized when computing interest. Your letter of October 8, 1982, shows that check number 2400 was sent, with the Amended Florida returns, to pay the net additional tax and interest. Consequently, the 1976 refund would be deemed to have been made within the nine-month period required under Florida Statute 214.14. This letter prompted the instant proceeding.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: that petitioner's application for a refund be GRANTED and that it be computed at a 6 percent rate to run from October 1, 1977. DONE and ENTERED this 18th day of November, 1983, in Tallahassee, Florida. DONALD R. ALEXANDER 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 18th day of November, 1983. COPIES FURNISHED: Mr. W. W. Carlson Assistant Vice-President St. Joe Paper Co. 803 Florida National Bank Building Jacksonville, Florida 3220 Barbara Staros Harmon, Esquire Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32301 Mr. Randy Miller Executive Director Department of Revenue Carlton Building, Room 102 Tallahassee, Florida 32301 =================================================================
Findings Of Fact On September 16, 1981, the Circuit Court, Fourth Judicial Circuit, In And For Duval County, Florida, upon a Petition For Modification of the Final Judgment of Paternity, entered a Consent Order For Support requiring the Petitioner in this cause to pay Fifteen and No/100 Dollars ($15.00) per week as and for child support and assigning said support payments to the Respondent in this cause until such time as the child involved in the paternity suit no longer received assistance from the State of Florida. At the time Respondent caused Petitioner's Federal Income Tax Refund to be intercepted, the Petitioner was in arrears in the sum of Two Thousand Seven Hundred Ninety and 17/100 Dollars ($2,790.17) on child support payments assigned to the Respondent under the order referred to in paragraph 1 above. Petitioner's Federal Income Tax Refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) has been intercepted and is in the possession of the Respondent.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that Respondent, Department of Health and Rehabilitative Services, enter a Final Order providing for the Petitioner's income tax refund in the amount of Eight Hundred Twenty Eight and No/100 Dollars ($828.00) be applied against his debt to the State of Florida for past due child support. Respectfully submitted and entered this 22nd day of April, 1988, in Tallahassee, Florida, Leon County, Florida. WILLIAM R. CAVE 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 22nd day of April, 1988. COPIES FURNISHED: Gregory Alan Mitchell 439 Woodbine Street Jacksonville, Florida 32206 R. Craig Hemphill, P.A. 331 East Union Street, Suite 1 Jacksonville, Florida 32202 Frederick J. Simpson, Esquire Dept. of HRS Post Office Box 2417 Jacksonville, Florida 32231 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Having listened to the testimony and considered the evidence presented in this cause, it is found as follows: Petitioner is a domestic corporation. Petitioner provided medicare services to patients in the 1969-70 fiscal year. An on-site audit by the medicare auditing team was concluded in December of 1971, and petitioner received $56,131.00 of medicare reimbursements in January of 1972, for the services provided in the 1969-70 fiscal year. The petitioner did not file an amended federal income tax return for the fiscal year ending September 30, 1979. The adjusted federal income reported on petitioner's federal income tax return for the fiscal year ending September 30, 1972, included the $56,131.00 of medicare reimbursements received by petitioner in January of 1972. On petitioner's Florida income tax return for its fiscal year ending September 30, 1972, petitioner did not include the $56,131.00 figure in its adjusted federal income. On March 31, 1975, the respondent notified petitioner of a proposed deficiency in the amount of $2,100.99 arising from the petitioner's omission of the medicare reimbursements from its adjusted federal income as shown on its Florida corporate income tax return for the fiscal year ending September 30, 1972. Further correspondence ensued between the petitioner and the Corporate Income Tax Bureau of the respondent and the petitioner filed the present petition requesting a hearing on the issue. The respondent requested the Division of Administrative Hearings to conduct the hearing.
Recommendation Based upon the above findings of fact and conclusions of law, it is my recommendation that there is no legal basis for affording the petitioner any relief from the proposed deficiency and that said deficiency in the amount of $2,100.00 be sustained. Respectfully submitted and entered this 17th day of September, 1975, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: E. Wilson Crump, II, Esquire Assistant Attorney General Department of Legal Affairs Tax Division, Northwood Mall Tallahassee, Florida 32303 Homer E. Ward, N.H.A. Administrator/President University Park Convalescent Center 1818 E. Fletcher Avenue Tampa, Florida 33612
Findings Of Fact The Tax-Credit Allocation Program Section 42(h)(3) of the Internal Revenue Code of 1986, as amended, provides for federal income tax credits for the development of low income housing. The tax credits are allocated among the states based on state population. Respondent allocates the low income housing federal income tax credits available in Florida. The present case involves the 1992 tax credit- allocation cycle, which was unusual in one respect. The relevant provisions of Section 42 of the Internal Revenue Code are due to expire on June 30, 1992. Respondent expedited the application and evaluation process for the 1992 cycle because of uncertainty concerning whether credits not allocated by June 30 can be allocated after the expiration of Section 42. As in past cycles, applicants in the 1992 cycle sought more tax credits than Respondent had to allocate. In some categories, the sum of tax credits sought by applicants is four times greater than the total available tax credits. Since 1990, as a result of changes in the Internal Revenue Code, Respondent has implemented a competitive process to determine which applicants should be awarded tax credits. In general, the selection process consists of an application and evaluation process followed by an underwriting process involving only those applicants and projects that were determined to be in the funding range after completion of the application and evaluation process. The objective of both stages is to identify proposed projects that offer the best opportunities for the development of affordable housing in Florida. This case involves only the first stage in which Respondent evaluates the application. The Subject Applications General Each Petitioner is a limited partnership formed to develop a low income rental housing project in Osceola County. The Ravenwood project is in the unincorporated county, and the Oakcrest project is in St. Cloud. Ronnie C. Davis is the general partner of both partnerships and controls the activities of these entities. His accountant, Steven Scott, has worked closely with Mr. Davis in connection with these and numerous other similar projects. As it had done successfully in past cycles, Petitioners applied to obtain federal income tax credits and sell the limited partnership interests (with tax credits) to a third party. The third party would combine Petitioners' projects with others like them and syndicate limited partnership interests to individual investors seeking, among other things, the available tax credits in order to lower their federal income tax liability. This indirect federal subsidy of development costs is intended to encourage the development of affordable housing. The application completed by Petitioners and other applicants in the 1992 cycle consists of numerous questions divided into 16 Forms. Each applicant receives a maximum of 1285 points based on the answers to the questions. Varying amounts of points are available for 12 of the 16 Forms. (Four Forms seek background information or constitute request forms.) The Ravenwood Application Form 1 of the Ravenwood application, which is dated January 30, 1992, consists of summarized information, which, where important, is requested elsewhere in the application. Due to its background nature, Form 1 involves no points. Form 1 of the Ravenwood application describes the proposed project as consisting of 181 units with eight units each in 23 different buildings. (Three units are reserved for on- site workers.) The project is situated on 11 acres and is projected to cost $9,537,049. Petitioner Ravenwood seeks $858,334 in federal income tax credits. Form 1 states that there is federal, state, or local financing "committed or to be committed to this Project." The financing is SAIL financing in the amount of $1.3 million representing 13.6% of the total project cost. Form 1 also states that the present owner acquired the property by gift on November 18, 1991. Form 4 addresses project feasibility and ability to proceed. Form 4 offers a maximum of 225 points. With Form 5, which concerns project funding, Form 4 is worth the most points of all the Forms. Form 4 of the Ravenwood application states, among other things, that the developer controls the site by County deed, which is intended to serve the purpose of a warranty deed. Attached as an exhibit to Form 4 is a letter dated November 20, 1991, from the Osceola County Administrator to Mr. Davis accompanying the delivery of a deed to the property from Osceola County to Ravenwood of Kissimmee, Ltd. The deed, which is dated November 18, 1991, recites as consideration "general benefit of the public." The deed conveys title to 11 acres "conditioned upon the grantee being awarded a state apartment incentive loan and tax credits no later than December 31, 1992. If this condition is not met by December 31, 1992, the property described herein shall revert to the grantor." The manner by which the limited partnership acquired the property is also covered in Form 6, which addresses local government contributions and planning efforts. Form 6 is worth 155 points, which is more than any other Form except Forms 4 and 5. The first part of Form 6 is directed to local government contributions. The first portion of the first part states: Attach evidence of any contribution or recommendation. Maximum points shall be awarded only when evidence of a contribution includes a signed statement from a chief elected official or his designee detailing the contribution from the appropriate local government. The value of the contribution must be stated in terms of a percentage of cost savings to the project. . . . Form 6 of the Ravenwood application answers affirmatively the question, "Has this project received any contributions from a local government?" In response to the request, "Describe the type of contribution," the application states: "Land as well as other government support and assistance." Form 6 states that the value of the contribution is $1,089,000. In response to a question as to how the value was calculated, the application reports that the value was calculated by a "local realtor." The application notes that the total project cost is $9,537,049. Form 6 contains a scoring sheet that awards points based on the ratio of the value of the local government contribution to the total project cost. If the local government contribution amounts to at least 10% of the total project cost, then the maximum of 75 points are earned for the first part of Form 6. Lower percentages earn fewer points, as follows: 9%-- 67.5 points, 8% 60 points, 7%--52.5 points, 6%--45 points, 5%-- 37.5 points, 4%--30 points, 3%-- 22.5 points, 2%--15 points, and 1%--7.5 points. As support for the information provided in the first part of Form 6, the application contains various attachments in the back of Form 6. One attachment is a letter dated November 18, 1991, from Barney Veal, Broker/President of ERA--Osceola Brokerage Co., Realtor. The Veal letter, which is addressed to Mr. Davis, states in its entirety: Per your request, and after careful consideration, I have reviewed the value of the land donated to you by the Osceola County Board of County Commissioners. Weighted consideration was given for the following: *Development Improvements to the municipal water system *Development Improvements to the municipal sewer system *Development Improvements to the transportation system *Superior site use through off-site drainage *Ease of access via the John Young Parkway Extension to the "high tech" corridor of neighboring Orange County *Property aesthetics This property contains 11 acres, and has a current density of 18 units per acre, thus allowing construction of 198 multi-family units. Therefore, the estimated valuation is approximately $5500 per residential unit, which equals a total amount of 1,089,000 [sic]. Another attachment to Form 6 is a letter from Ron Howse, P.A., an engineering and land planning firm. Mr. Howse, whose office is in St. Cloud, incorporates Mr. Veal's letter and provides the above-described responses to the questions contained in the first part of Form 6. The remaining attachments to Form 6 address the second part, which involves local government planning efforts with respect to affordable housing. This part of Form 6 is not relevant to the subject case. The Oakcrest Application The Oakcrest application, which is also dated January 30, 1992, is similar to the Ravenwood application. Form 1 of the Oakcrest application describes the proposed project as consisting of 189 units with eight units each in 24 different buildings. (Three units are reserved for on-site workers.) The project is situated on 19.4 acres and is projected to cost $10,164,207. Petitioner Oakcrest seeks $914,778 in federal income tax credits. Form 1 states that there is federal, state, or local financing "committed or to be committed to this Project." The financing is SAIL financing in the amount of $1.4 million representing 13.8% of the total project cost. Form 1 also states that the present owner acquired the property by gift on November 21, 1991. Form 4 of the Oakcrest application states, among other things, that the developer controls the site by warranty deed. Attached as an exhibit to Form 4 is a letter dated November 21, 1991, from Larry F. Hopper, Executive Director of the St. Cloud Area Chamber of Commerce. The letter is to Mr. Davis and accompanies the delivery of a deed to the property from the St. Cloud Housing & Revitalization Agency, Inc. to Oakcrest of St. Cloud, Ltd. The deed, which is dated November 21, 1991, conveys title to 19.4 acres conditioned upon the grantee being awarded a state apartment incentive loan and tax credits to construct no less than 193 units, with construction thereon to commence no later than December 31, 1992. If the above cited incentive loan and tax credits are not received and construction not begun by December 31, 1992, the property described herein shall revert to the grantor. Form 6 of the Oakcrest application answers affirmatively the question, "Has this project received any contributions from a local government?" In response to the request, "Describe the type of contribution," the application states: "Land Contribution, as well as other government support and assistance." Form 6 states that the value of the contribution is $1,018,000. In response to a question as to how the value was calculated, the application reports that the value was calculated by a "local realtor." The application notes that the total project cost is $10,164,207. As support for the information provided in the first part of Form 6, the application contains various attachments in the back of Form 6. One attachment is a letter dated November 18, 1991, from Barney Veal, Broker/President of ERA--Osceola Brokerage Co., Realtor. The Veal letter, which is addressed to Mr. Davis, states in its entirety: Per your request, and after careful consideration, I have reviewed the value of the land donated to you by the St. Cloud Housing and Revitalization Agency, Inc. Weighted consideration was given for the following: *Development Improvements to the municipal water system *Development Improvements to the municipal sewer system *Development Improvements to the transportation system *Location Proximity to a new growth area *Property Aesthetics This property contains 19.4 acres, and has a current density of 10 units per acre, thus allowing construction of 194 multi-family units. Therefore, the estimated valuation is approximately $5250 per residential unit, which equals a total amount of $1,018,500. Another attachment to Form 6 is a letter from Ron Howse, P.A., an engineering and land planning firm. Mr. Howse, whose office is in St. Cloud, incorporates Mr. Veal's letter and provides the above-described responses to the questions contained in the first part of Form 6. Another attachment to Form 6 of the Oakcrest application is a copy of the first two pages of the Articles of Incorporation of the St. Cloud Housing & Revitalization Agency, Inc., a not-for-profit corporation. According to the articles, the not-for-profit corporation was incorporated by the St. Cloud Area Chamber of Commerce, Inc. Relevant Practices of Respondent The head of Respondent is its Board of Directors. Each review cycle, the Board appoints a Review Committee, which normally consists of five or six persons. Different employees of Respondent serve on the Review Committee each year. The Review Committee assigns scores for each Form of each application. These determinations are then submitted to the Board of Directors for further action. Certain practices have evolved in connection with the scoring of applications. To the extent that any of these practices may constitute nonrule policy, Respondent has amply explicated the practices, which appear to be necessary and proper to the discharge of its responsibilities in the allocation of low income housing federal tax credits. First, the Review Committee generally limits its review of an application to the material contained within the four corners of the application. The reason for this practice is that the Review Committee is typically operating under time pressures. However, there are two circumstances in which the Review Committee may refer to information not contained within the application. The first and more frequent exception to the general rule is if something is unclear in the application. In this case, a member of the Review Committee or staff of Respondent may contact the applicant to obtain a clarification. Sometimes, the contact may be with a third party, such as a third-party lender to whom questions concerning the scope of a commitment letter may be directed. By limiting these inquiries to clarifications, Respondent avoids the possibility of the eliciting information that constitutes post-deadline amendments of material aspects of the application. The second exception to the general rule is when a third party informs the Review Committee that certain information contained in an application is inaccurate. To a great extent, the accuracy of the contents of the application is checked in the underwriting stage of the allocation process. But, if time permits, the Review Committee or other representatives of Respondent may, if they so choose, undertake a necessarily limited investigation of statements in an application. In the couple of years that the allocation process has been competitive, the only application rejected as "untrue," aside from Ravenwood and Oakcrest, was an application for a project known as Woodside. Ironically, this application appears to have been challenged by Mr. Davis and Mr. Ginsburg, 1/ who alerted Respondent to the fact that, contrary to representations contained in the application, the Resolution Trust Corporation, not the developer, owned the site. 2/ It appears that, due to timing, the Board itself rejected the Woodside application because the true facts were uncovered during the underwriting stage, rather than the application and evaluation stage. It appears that, also during underwriting, another application was rejected due to ineligibility, if not actual untruthfulness. In that case, an application for a project known as Golden Acres was rejected when representatives of the Board checked the project site and confirmed that the buildings had already been placed in service and thus would not be eligible for any or a full tax credit. Except for one case in which the wrong application form was used, the record does not disclose if other applications have been summarily rejected for reasons other than satisfying a scoring threshold described in the application form and irrelevant to this case. Rather than reject an application, at least prior to the underwriting process, the Review Committee and Board will often rescore an application. Not infrequently, a developer submits an application containing information that may be described, in the words of one witness, as optimistic in nature. If the application contains sufficient material for the Review Committee or Board to rescore a Form, possibly with the assistance of a clarification from the applicant or a third party, the application will be rescored so that a lower score results. It is not always easy to describe what renders an application "untrue." One example of an untrue application would be if an applicant fabricated a loan commitment letter when no such commitment had been made. On the other hand, if the applicant claimed more points than the letter, on its face, justified due to its numerous contingencies and conditions, the application would clearly be rescored. Although it may contain inaccuracies, a true application must disclose all material facts so that each Form may be scored reasonably accurately. The materiality of an omitted fact depends largely on the importance and purpose of the requested information. The decisions as to what information is important, material, or untrue and when to reject and when to rescore an application must be based on a balancing of at least two considerations. The first is that the purpose of the application and evaluation and underwriting processes is to ensure that the available tax credits go to the best projects, in terms of meeting the critical needs of low income persons for affordable housing. Superior applications should not be rejected too readily. The second is that the integrity of the evaluation process would be compromised if the "untrue application" language is interpreted so that all instances of applicant untruthfulness are reduced to over-optimism, thus meaning that untrue applications would be always rescored and never rejected. Without the potential penalty of rejection, the process by which applications are evaluated and projects underwritten would become increasingly burdened by the chore of detecting growing numbers of misrepresentations. At some point, the resources of Respondent would become overtaxed, misrepresentations would probably escape detection, and the overall objective of the entire program--facilitating the availability of affordable housing--would eventually be defeated. V. Preliminary Scoring of the Applications in the 1992 Cycle In the present case, on or about February 27, 1992, the Review Committee tentatively scored all of the applications. For medium counties, 3/ eight applications fell within the funding range, one application fell partly in the funding range, 16 applications meeting the scoring threshold fell outside the funding range, and one application failed to meet the scoring threshold. The tentative scoring assigned Ravenwood 1190 points and Oakcrest 1153.87 points for the two highest scores among the nine projects tentatively allocated, in whole or in part, the tax credits requested. On March 6, 1992, the Board of Directors reviewed the tentative scoring determined by the Review Committee. By this time, representatives of Respondent had determined that the contribution of the land from the local governments, as asserted in both applications, was not as represented. The Board decided to reject both applications. If the Ravenwood and Oakcrest applications had been merely rescored so as to lose all 75 points for the first part of Form 6, they would have remained in the funding range. In fact, Ravenwood would have remained first, and Oakcrest would have been third, tied with another project. Respondent has implemented an appeal process by which scores set by the Board, following review of the tentative scoring of the Review Committee, may be re-evaluated by the Board. In the 1992 cycle, 36 applicants took advantage of this process. The appeals hearing, which took place on May 1, 1992, resulted in the issuance of the final scoring tabulation, which is Petitioner Exhibit 14. However, no material changes took place with respect to medium counties, and the Ravenwood and Oakcrest applications remained rejected. Facts Not Disclosed on Applications Ravenwood The basic problem with the Ravenwood application is that it states that the local government, Osceola County, contributed the raw land to the applicant. In substance, the County has conveyed nothing to the Ravenwood limited partnership. Through a series of step transactions, Mr. Davis, using an agent, obtained title to the land from a genuine third party, conveyed the land to the County, and caused the County to convey the land to the Ravenwood limited partnership. The few details of the transactions that are relevant begin with the fact that, by contract dated April 9, 1991, Mr. Davis agreed to pay the original owners $300,000 for 12.5 acres. On October 30, 1991, Mr. Davis assigned the contract to his accountant's brother, Jimmy Alan Scott. By quitclaim deed acknowledged November 9, 1991, Mr. Scott quitclaimed any interest he had in the land to Osceola County. On November 18, 1991, Mr. Davis, Mr. Scott, and Osceola County entered into a trilateral agreement. The parties agreed that Mr. Scott would convey the property to the County, which would convey the property to the Ravenwood limited partnership. Also, the County agreed that if the property reverted to it under the condition to be contained in its deed to the partnership, then it would reconvey the property to Mr. Scott. Another significant aspect of the trilateral agreement is that the deeds from Mr. Scott to the County and the County to the Ravenwood limited partnership are to be "held in escrow pending the County's negotiations with [other parties including the original owners of the subject land] to acquire additional property for the recreational complex." By letter dated March 2, 1991, the attorney for the Ravenwood limited partnership discloses that the escrow had not been broken, inferentially because escrow conditions remained unsatisfied, and the deeds had not been recorded. On November 16, 1991, Mr. Davis lent Mr. Scott the funds necessary to purchase the land from the original owners. A note for the amount was to be forgiven if Mr. Scott donated the land to Osceola County. By warranty deed dated January 6, 1992, the original owners conveyed the land to Mr. Scott, who, on the same date, conveyed the land to the County. The two deeds were identical except that deed into the County contains a reverter clause covering all but a small part of the property. The condition is that the majority of the land reverts to Mr. Scott if construction of no less than 184 units of affordable housing does not begin by December 31, 1991. The only deed from the County to the Ravenwood limited partnership is dated November 14, 1991. Copies of the deed were produced at the hearing and attached to the Ravenwood application in Form 4. In the instrument, the County "has granted, bargained and sold" the subject land to the Ravenwood limited partnership conditioned upon the partnership "being awarded a state apartment incentive loan and tax credits no later than December 31, 1992. If this condition is not met by December 31, 1992, the property described herein shall revert to the grantor." There are no warranties, such as a warranty of title, contained in this deed. The underlying problem with the Ravenwood application is as basic as the problem in the Woodside application, where Mr. Davis objected that the RTC, not the applicant, owned the land, contrary to the assertions contained in the application. The County has not contributed anything to the Ravenwood limited partnership because the partnership does not own the land. First, unspecified escrow conditions have left uncompleted the conveyances to the County and the Ravenwood limited partnership. Tied up in escrow, the deeds have not been delivered, which is as basic an aspect to the conveyance of property as is their execution. Second, the application shows that the limited partnership owns the land as a result of a deed from Osceola County. The deed predates the date on which the original owners conveyed the land to Mr. Scott and he purportedly, using an escrow arrangement, conveyed the land to Osceola County. In a deed without any warranties, it is questionable whether the doctrine of after- acquired interest or estoppel by deed would operate here. In light of the problems identified in the preceding two paragraphs, the overstatement problem is less substantial. Although the County has contributed something in the way of services, there is no evidence that the contribution of such services anywhere approaches the claimed amount of $1,089,000, which is more than three times the value of the land as of April, 1991. However, in view of the failure of the Ravenwood limited partnership to obtain any title to the land, the value of the contribution is not $1,089,000, but zero. Oakcrest The basic problem with the Oakcrest application also involves the contribution of raw land to the partnership. The land has not yet been conveyed to the partnership. The relevant details of the Oakcrest transactions are similar to those of the Ravenwood transactions. On November 18, 1991, Mr. Scott and a genuine third party entered into an agreement for deed for 19.4 acres for payment of $300,000. The condition of a closing, which is set for no later than January 5, 1993, is that the Oakcrest limited partnership be awarded tax credits no later than December 31, 1992. Notwithstanding its title as an agreement for deed, the subject instrument operates like a purchase and sales contract, in part because Mr. Scott has not placed any money unconditionally at risk and a closing is set at a point in the future once certain contingencies have been satisfied. On November 19, 1991, Mr. Scott conveyed by warranty deed to the St. Cloud Housing and Revitalization Agency, Inc. the same 19.4 acres subject to the condition that the "grantee [i.e., the Agency] being awarded a state apartment incentive loan and tax credits to construct no less than 193 units with construction thereon to commence no later than December 31, 1992." If the condition is unsatisfied, it provides for the property to revert to Mr. Scott. On November 21, 1991, the St. Cloud Housing and Revitalization Agency, Inc. conveyed by warranty deed to the Oakcrest limited partnership the same 19.4 acres subject to the same condition concerning 193 units. The Oakcrest transfers are ineffective and leave the Oakcrest limited partnership with no interest in the land and thus in receipt of no contribution from a local government. The application, which adequately discloses the nature of the St. Cloud Housing and Revitalization Agency, Inc. as other than a local governmental entity, contains only the warranty deed from the Agency to the Oakcrest limited partnership. The omission of the sales contract (i.e., Agreement for Deed) leaves the incorrect impression that the Agency had an interest to convey to the Oakcrest limited partnership. The Agency had no such interest because Mr. Scott had no such interest. 4/ But the valuation problem is greater in the Oakcrest case. Unlike the Ravenwood case, in which months passed between the contract and the date on which the applicant asserted the value of the land, the Oakcrest sales contract calling for a $300,000 purchase price was signed just three days before the deed purportedly conveying the land from the Agency to the Oakcrest limited partnership. Unlike the Ravenwood case, the Agency was making no other contributions to the partnership. Even assuming an effective conveyance, the application thus grossly overstates the value of the contribution at $1,018,500, when the original sellers only three days earlier agreed to sell the property, under substantial conditions favorable to the buyer, for only $300,000. Whether the Applications are Untrue For the reasons set forth above, the Ravenwood and Oakcrest applications were untrue at the time that they were submitted and were properly rejected by Respondent. The materiality of the omissions is indisputable. Contrary to the assertions in both applications, the applicant in each case not only had not received a contribution of the land from a local government, but the applicant had not even obtained an interest in the land.
Recommendation Based on the foregoing, it is hereby recommended that the Florida Housing Finance Agency enter a final order rejecting the Ravenwood and Oakcrest applications as untrue. RECOMMENDED this 9th day of June, 1992, in Tallahassee, Florida. ROBERT E. MEALE 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 9th day of June, 1992.
