Findings Of Fact In 1975, the Florida Legislature passed the Medical Malpractice Reform Act, Chapter 75-9, Laws of Florida, now codified in Chapter 768, Florida Statutes. Part of this legislative package included the creation of the Fund. In 1976, the Legislature enacted Chapter 76-260, Laws of Florida, which amended Section 627.353, Florida Statutes. Subsequently, the provisions of Section 627.353 were renumbered as Section 768.54, Florida Statutes. Section 768.54 was subsequently amended by Chapters 77-64, 78-47, 79-170, 80-328, 82-236 and 83- 206, Laws of Florida. The Fund is a private not-for-profit organization, participation in which is totally voluntary for its member-health care providers. Insofar as Petitioners are concerned, membership in the Fund is but one of several options available to provide legally required evidence of financial responsibility in order to obtain licensure as a hospital facility in Florida. Physicians, hospitals, health maintenance organizations and ambulatory surgical centers who become members of the Fund must maintain at least $100,000 in primary professional liability insurance. Membership in the Fund grants to each participant a limitation of liability above the $100,000 in primary coverage. To the extent that any settlement or judgment exceeds the primary coverage of the participant, it is paid by the Fund without limitation. The Fund is operated subject to the supervision and approval of a board of governors whose membership is required by law to consist of representatives of the insurance industry, the legal and medical professions, physicians' insurers, hospitals, hospitals' insurers and the general public. The Department of Insurance ("the Department") is charged by statute with certain regulatory functions concerning the Fund. For each of the years in question in this proceeding, the initial membership fees charged plus the investment income earned thereon have proven to be inadequate to pay the claims made against the Fund. Section 768.54(3)(c) , Florida Statutes, provides that, in the event the Fund determines that the "amount of money in an account for a given fiscal year is not sufficient to satisfy the claims made against the Fund, `the Department' shall. . . levy [an] assessment against" the members of the Fund. Under the original legislation, all classes of health care providers could be assessed unlimited amounts to make up any deficiencies. As a result of legislative amendments which became effective July 1, 1976, the amount which participants, other than hospitals, could be assessed was limited to the amount each Fund member had paid to join the Fund for that particular coverage year. This limitation was again removed in 1983. For all years at issue in this proceeding, however, a statutory limitation was in effect on the amount physician members of the Fund could be assessed. 1976 legislative amendments also required that each fiscal year of the Fund, which runs from July 1 through June 30, be operated independently of preceding fiscal years, and further required that occurrences giving rise to claims in a particular fund year be paid only from fees or investment income on those fees collected for that particular year. Thus, it is entirely possible for the Fund to experience deficits in a given year, and yet hold surplus funds for other years. On September 19, 1983, the Department of Insurance issued a "Notice of Assessment." Notice of this Notice of Assessment was published in the Florida Administrative Weekly. The Notice of Assessment announced that the Insurance Commissioner intended to authorize the Fund to levy and collect an assessment in the following amounts from those health care providers that were members of the Fund during each respective year: 1976-1977 Membership Year $ 1,633,716 1977-1978 " " 7,843,522 1978-1979 " " 12,545,551 1979-1980 " " 18,673,853 1980-1981 " " 14,363,697 Each of the hospitals named as Petitioners in the Petition for Administrative Proceedings in Case Nos. 83-3381 - 83-3388 were members of the Florida Patient's Compensation Fund during one or more of the fund years described in paragraph 7. On or about July 20, 1983, the Board of Governors of the Fund authorized the Fund to certify a deficit assessment in the following amounts to the Department: 1976-77 Membership Year $ 1,633,716 1977-78 " " 7,843,522 1978-79 " " 12,545,551 1979-80 " " 18,673,953 1980-81 " " 14,363,697 TOTAL $55,060,339 These amounts were in fact certified to the Department. The Department spread these assessments in the Notice of Assessment among the various health care providers as follows: CLASS OF HEALTH CARE PROVIDERS AMOUNT OF ASSESSMENT 1976-77 1977-78 1975-79 1979-80 1980-81 Physicians and Surgeons (a) Class 1 0 394,966 0 0 0 Class 2 0 0 0 0 0 Class 3 0 0 0 0 0 Hospitals 1,600,341 7,231,951 12,496,924 18,539,870 14,255,691 3. HMO 0 4,426 11,795 46,938 34,337 4. Abulatory Surg. Center 1,927 9,481 36,829 87,045 76,669 5. Prof. Assoc. 31,448 202,698 0 0 0 The Department computed the portion of the assessment to be paid by the different classes of health care providers for all years in question based upon an "indicated rate method." This method is represented by the following formula: The Department started with the actuarially indicated rate for each class of health care provider as described in the October, 1982 Actuarial Report prepared by Tillinghast, Nelson, et al. This is called the "indicated rate by class." The Department then applied the following formula for each class: Indicated Rate by Class x No. of Members in the Class Total indicated fees by Class Total Indicated Fees by Class divided by total Indicated Fees for ALL Classes = Percentage of Indicated Fees by Class Percentage of Indicated Fee by Class x Total Expected Loss for ALL Classes = Expected Loss by Class (Expected Loss is ALL losses for the fund year including claims previously paid, reserves established on claims asserted and IBNR (incurred but not reported).) The "indicated rate method" for allocating assessments among the various classes of health care providers was selected by the Department as the method which most fairly reflected the classifications prescribed in Section 768.54(3)(c) , Florida Statutes. The record in this proceeding established that this method is the most feasible mechanism for fairly reflecting classifications established by statute, and, at the same time, providing immediate funds necessary to meet all claims against the Fund. Any difference between the results derived by the rate method reflected in the Notice of Assessment is due to the application of the statutory cap on assessments against physician members, as applied by the Department. The Notice of Assessment issued by the Department allocated the "excess assessments," which could not be applied to physician members because of the limitation on the amount physicians could be assessed among the other classes of health care providers based upon their percentage of "expected losses." The amounts of the assessments sought by the Fund, and described in the Notice of Assessment, were calculated by the Fund by using the following formula: Total fees paid during the Fund Year + Investment Income attributable to the Fund Year + Amounts previously noticed as assessments Expenses allocated to that Fund Year Amount paid on claims for that Fund Year Amount reserved for all known claims for that Fund Year. The fees ordered by the Department and collected by the Fund, plus the interest income generated by such fees, plus the amounts previously assessed for each fund year in question are inadequate to cover claims against the Fund for each of the years in question herein. Petitioners have contested the amount of reserves and the reserving practices of Fund. When a claim is received by the Fund, a claims supervisor is assigned to the file and reviews that file to determine whether the case involves a Fund member, the nature of the claim and other relevant data. If the claims supervisor determines that a reserve is warranted, he recommends a reserve and customarily prepares a report justifying the reserve. The report and recommended reserve are then reviewed by the Claims Manager and the General Manager, who are free to make adjustments in the recommended reserve amount. The file is then taken before the Fund's Claims Committee for review. This committee consists of representatives from the insurance industry, legal profession and hospital industry who are familiar with the current status of medical malpractice trends. The committee reviews the reserve recommendation and may lower, raise or refuse to set a reserve. The Claims Supervisor who recommended the reserve is most often present at the meeting of the Claims Committee for the purpose of answering questions about the file and providing updated information. If the committee approves a reserve, the reserve is carried with the file and no further changes in the reserve occur without committee approval. While the record in this cause shows that in some individual cases there has been inordinate delay in setting a reserve, and that some reserves have been established on a paucity of objective data, there is insufficient evidence from which to conclude either that any established reserve is incorrect, or that the Fund's reserving or claims handling procedures are unreasonable. In fact, the record establishes that the Fund's reserving practices are consistent with those generally accepted in the insurance industry, that these practices have been reasonably applied in setting case reserves, and that the Fund's reserves are not excessive. The record in this cause establishes that, assuming all previous assessments noticed had been collected, there exists, at the time of the hearing, as well as the date of the assessment, a deficiency as indicated below in the Fund's account for each year indicated: 1976 - 77 $ 1,633,716 1977 - 78 7,843,522 1978 - 79 12,545,551 1979 - 80 18,673,853 1980 - 81 14,363,697 In view of the statutory cap on the amounts that may be assessed against physician members of the Fund, the foregoing dollar amounts for assessments for each fund year, and the manner in which they are proposed to be allocated among the remaining classes of health care providers are appropriate. Both Petitioners and Respondent have submitted proposed findings of fact for consideration by the Hearing Officer. To the of fact are not included in this Recommended Order, they have been specifically rejected as being either irrelevant to the issues involved in this cause, or as not having been supported by evidence of record.
The Issue The issues are as follows: (a) whether Respondent took "agency action" when it certified the Okaloosa-Walton College Foundation, Inc. as its direct support organization and endorsed the Foundation's decision to sell the Mattie Kelly property; and whether Petitioners have standing to request an administrative hearing on those issues.
Findings Of Fact The Foundation was incorporated and first certified as a direct support organization in 1988. The Mattie Kelly property is approximately 13 acres of waterfront property on Choctawhatchee Bay in Destin, Okaloosa County, Florida. It includes the former residence of Mattie Kelly and the real property surrounding the residence. Destin, Okaloosa County, Florida, is a municipality, bounded on the north and west by Choctawhatchee Bay, on the south by the Gulf of Mexico, and on the east by Walton County, Florida. On August 17, 1992, Mattie Kelly executed her Last Will and Testament (will). Article VIII of the will states as follows: I give, devise and bequeath my personal residence located a 1200 Indian Trail Road, Destin, Florida 32541, including all real property surrounding the residence and the sum of Five Hundred Thousand Dollars ($500,000,000) to Okaloosa-Walton Community College for the establishment of the "Mattie Kelly Cultural and Environmental Institute of Okaloosa-Walton Community College." The purpose of the "Mattie M. Kelly Cultural and Environmental Institute of Okaloosa-Walton Community College" shall be: To provide a meeting place for literary societies, fine arts groups, and small performing groups. To provide a location for conferences and seminars offered through Okaloosa-Walton Community College. To provide a location for biology studies and marine science studies associated with Choctawhatchee Bay and the Gulf of Mexico. To provide a location for displaying the coastal heritage of Northwest Florida. The Five Hundred Thousand Dollars ($500,000,000) endowment which forms part of this gift shall be used only for maintenance and operating costs in furtherance of the above purposes, including the perpetual care, maintenance and upkeep of my mausoleum. A Personal Representative's Warranty Deed dated March 6, 1997, conveyed the property to the Foundation. At some point in time, the Foundation decided to sell the property to a real estate developer and entered into a contract to do so. On March 15, 2004, Petitioner Hammet filed a Petition for Administrative Hearing with the Board. The petition questioned whether the Board should support, endorse, and/or not oppose the sale of the property for private real estate development purposes, accept the college president's recommendation about the sale, and certify the Foundation to be operating in the best interest of the state. The Board's March 16, 2004, minutes state as follows in relevant part: ACTION AGENDA DSO Certification/IRS 990 The District Board of Trustees certified that requirements of Direct Support Organization under FS 1004.70 have been met and that the OWCC Foundation is in compliance with the procedures as herein described and accepts Form IRS 990 as submitted. Further, the District Board of Trustees supports and endorses the Foundation Board of Directors in its endeavor to sell the Mattie Kelly Property (Motion: Henderson; Second Rainer. Vote: 6 yes; 2 no (Smith, Wells). Motion carried. On April 22, 2004, the Board referred Petitioner Hammet's petition to DOAH, together with the Board's Motion to Dismiss. DOAH assigned this case DOAH Case No. 04-2049. On June 15, 2004, the Board referred the following to DOAH: (a) Petitioner Coastkeepers' Petition for Administrative Hearing; (b) Petitioner's Motion and Suggestion for Disqualification of Joseph Henderson and James R. Richburg; and the Board's Motion to Dismiss Petition for Administrative Hearing. DOAH assigned the case DOAH Case No. 04-2141. On July 8, 2004, some of Ms. Kelly's relatives filed a suit against the Foundation in Circuit Court. In Count I of the complaint, the relatives sought a declaratory judgment that the Foundation's proposed sale violates Ms. Kelly's will and that the relatives had reversionary rights to the property. In Count II of the complaint, the relatives sought injunctive relief to restrain the Foundation from selling the property to a third party in accordance with a written contract of sale. On April 20, 2005, the Florida Attorney General issued an Advisory Legal Opinion, stating that the Foundation is subject to Florida's Sunshine Law. On May 5, 2005, the Foundation voted to ratify the contract to sell the property and to confirm the prior decision to sell the property. On June 3, 2005, the First Circuit Court entered a "Final Judgment for Defendant" in L. Bernarr Kelly, Carol Kelly and Lowell B. Kelly v. The Okaloosa-Walton Community College Foundation, Inc., No. 2004-CA-405 (Fla. 1st Cir. Ct. June 3, 2005), which states as follows in pertinent part: . . . The Court is convinced by the nature of the Will, and the testimony and evidence that Mattie Kelly had legal advice in her estate planning, that if Mattie Kelly intended for the subject property to be placed in a trust, and if she desired to put restrictions on the subject property to prevent Defendant Foundation from selling it, that she knew how to accomplish this, and that she chose not to do so. The Court finds . . . that Mattie Kelly did not intend to limit or restrict the sale of the subject property in the future to fulfill her desires for the creation of a cultural and environmental institute. . . . The Court finds that the deed dated March 6, 1997, . . . does not contain a reverter clause or language creating any right of reversion. . . . The Court finds that the deed conveyed a fee simple title to the OWCC Foundation with no right of reversion. The Court further finds that this deed was in accordance with the intent of Mattie Kelly at the time she executed her will. The Court finds that Article VIII of the Will which devised the subject property contains no language of trust and no language of reverter, and did not create a charitable trust . . . . The Court further finds that Defendant's proposed sale of the subject property does not include the "mausoleum property." . . . Since the mausoleum property is not being conveyed, the Court finds that the Plaintiffs no longer have standing as to the remaining property, and would deny Plaintiffs relief on this basis, in addition to the foregoing reasons. Therefore, the Court finds for the Defendant, The Okaloosa-Walton Community College Foundation, Inc. and against the Plaintiffs, and ORDERS and ADJUDGES as follows: Defendant Foundation's proposed sale of the subject property is not in derogation of Article VIII of the Last Will and Testament of Mattie Kelly, or the deed which conveyed the subject property to Defendant Foundation. Therefore, Defendant Foundation is not prohibited from selling the subject property, excluding the mausoleum property as described in Addendum #4 to the Contract for Sale and Purchase, in order to fulfill the intent of Mattie Kelly in creating the "Mattie M. Kelly Cultural and Environmental Institute;" however, all monies received from the sale of the subject property, including any matching funds, are to be used in the establishment and operation of the Mattie M. Kelly Cultural and Environmental Institute. [Emphasis added.] On June 8, 2005, Petitioners filed a Joint First Amended Petition for Administrative Hearing, stating as follows regarding standing: Petitioner Hammet's substantial interests will be affected by Respondent's determination because she and her family live within close proximity to the Mattie Kelly property and have often used and enjoyed the property for viewing the coastal heritage of Northwest Florida, and she wishes to continue to use and enjoy the property in the future. The Mattie Kelly property is a special place for Hammet and her family, where they have many pleasant memories and regularly have benefited from this public property being in their neighborhood. Hammet and her family will no longer be able to use and enjoy this accessible public resource if it is sold for private development. Petitioner Coastkeepers' substantial interest will be affected by Respondent's determination because it is a Florida non-profit corporation dedicated to protection of the environment in an area of the Gulf of Mexico Coast that includes Okaloosa and Walton Counties and Choctawhatchee Bay. Preservation of environmentally sensitive lands such as the Mattie Kelly property, and having the Mattie Kelly property as a location for biological studies, marine science studies, and studies of the coastal heritage of Northwest Florida, are vitally important to protecting Choctawhatchee Bay and the interest of Petitioner and its members, who include a substantial number of members who reside in Okaloosa and Walton Counties and have the present intention to use, visit, enjoy, and study biological, marine science and cultural heritage issues associated with Choctawhatchee Bay, the Gulf of Mexico, and the Mattie Kelly property at the Mattie Kelly property. The Mattie Kelly property is ideally suited to provide waterfront environmental education in an otherwise highly urbanized environment, including education of local residents, which is vital to controlling urban runoff, and for highlighting, encouraging, and educating the public of the need to protect Choctawhatchee Bay and the Gulf of Mexico. The Mattie Kelly property would no longer be available for such intended pursuits were the proposed sale of the Mattie Kelly property to private development interest go forward. Moreover, the proposed development of the very property set aside by Mattie Kelly would itself directly contribute to the urban runoff known to be causing problems in Choctawhatchee Bay. Choctawhatchee Bay has many examples of waterfront subdivision development and very little opportunity for environmental protection education in a local setting near where waterfront residential owners already live. These purposes will not be as well-served by educational efforts at OWC's main campus in Niceville, which is not waterfront and miles away from Choctawhatchee Bay. If properly managed, the Mattie Kelly property should be the field trip every school-age child in Okaloosa and Walton County takes, which would be a lasting legacy to Mattie Kelly that would truly be consistent with her express purposes. This opportunity will be forever destroyed if the property is developed as proposed. On June 24, 2005, Respondent filed a Motion to Dismiss Joint First Amended Petition for Administrative Hearing. On July 5, 2005, Petitioners filed a Response to Respondent's Motion to Dismiss Joint First Amended Petition for Administrative Hearing. Neither of the Petitioners holds any title interest in the property.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Board enter a final order dismissing the Petitions for Administrative Hearing. DONE AND ENTERED this 22nd day of August, 2005, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 2005. COPIES FURNISHED: James R. Richburg, President Okaloosa-Walton Community College 100 College Boulevard Niceville, Florida 32578-1295 Joseph D. Lorenz, Esquire 1270 North Elgin Parkway, Suite C-12 Shalimar, Florida 32579 Steven A. Medina, Esquire Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, P.A. 316 South Baylen Street Post Office Box 12308 Pensacola, Florida 32581
The Issue The issue in this case is whether Petitioner is entitled to a consumer certificate of exemption as a religious or charitable institution.
Findings Of Fact Petitioner has submitted seven (7) exceptions to the Hearing Officer's Findings of Fact in the Recommended Order. Exceptions 1, and 3 through 6 filed by Petitioner are rejected. Exception 2 is accepted to the extent it states that Petitioner does not hold worship services. The remainder of this exception is rejected. Exception 7 is rejected, except for the first sentence which indicates that the date of purchase of the vehicle was 1995, not 1993. Petitioner's First Exception-- Finding of Fact No. 1: Petitioner's statements as to how Petitioner was advertised are not relevant and, therefore, are rejected. Petitioner's Second Exception-- Finding of Fact No. 2: Accepted that Petitioner does not have worship services. This determination has been made by the Hearing Officer's Findings of Fact. See Findings of Fact No. 2 and 3. The remainder of this exception is rejected as being irrelevant. Petitioner's Third Exceptions-- Finding of Fact No. 3: The Hearing Officer's Finding of Fact, Paragraph 3 of the Proposed Recommended Order, that Christian-Muslim Church of God (ALLAH) is not part of any established religion is supported by substantial competent evidence. Thus, Petitioner's exception to this finding is rejected. The statement that Petitioner's founder will write a "Consolidated Moral Bible" is not relevant, and is therefore rejected. The Hearing Officer's finding that Petitioner has generalized plans to establish regular religious services, but has not yet done so, is supported by substantial competent evidence. Therefore, Petitioner's exception to this finding is rejected. The statement as to how assemblies of the church will be organized by Petitioner in the future is not relevant, and is therefore rejected. Petitioner's Fourth Exceptions- Finding of Fact No. 4: Petitioner's statements as to where Petitioner's funds are deposited is not relevant, and therefore is rejected. Petitioner's statements as to the type of donations its founder, Mr. Savas, personally makes are not relevant and, therefore, are rejected. The Hearing Officer found that Petitioner does not qualify as a "religious institution" under s212.08(7)(o) 2.a., Florida Statutes. The Hearing Officer's finding is supported by substantial competent evidence. Thus, Petitioner's exception to this finding is rejected. Petitioner's statement as to why Petitioner needs the sales tax exemption is not relevant and, therefore, is rejected. Petitioner's Fifth Exceptions-- Finding of Fact No. 5: The Hearing Officer found that Petitioner is not registered as, or classified as, any type of legal entity. The Hearing Officer also found that the Petitioner is not a church or charitable institution as those terms are defined under s212.08(7), Florida Statutes for purposes of sales tax exemption. The Hearing Officer's findings are supported by the record and by substantial competent evidence. The remainder of Petitioner's exceptions are not material. Therefore, all of Petitioner's exceptions to Paragraph 5 are hereby rejected. Petitioner's Sixth Exception-- Finding of Fact No. 6: The Hearing Officer found that Petitioner is not registered as, or classified as, any type of legal entity and that Petitioner does not qualify as a "charitable institution" pursuant to s 212.08(7)(o)2.b., Florida Statutes. These findings are supported by substantial competent evidence. Therefore, Petitioner's exception to this paragraph is rejected. Petitioner's Seventh Exceptions-- Finding of Fact No. 7: Accepted that Petitioner's founder purchased his car in 1995, and applied for a consumer's certificate of exemption at that time. The statements as to the beliefs of Petitioner's founder are irrelevant or immaterial, and are rejected accordingly.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a final order denying a consumer certificate of tax exemption to Petitioner, the Christian-Muslim Church of God (Allah). DONE and ENTERED this 18th day of March, 1996, in Tallahassee, Florida. CAROLYN S. HOLIFIELD 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 18th day of March, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-4076 To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Respondent's Proposed Findings of Fact. 1. - 11. Accepted and incorporated to the extent not subordinate or unnecessary. COPIES FURNISHED: Ruth Ann Smith, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 John Savas 1416 Hill Drive Largo, Florida 34640 Linda Lettera, Esquire Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
Findings Of Fact In 1975 the Florida Legislature passed the Medical Malpractice Reform Act, Chapter 75-9, Laws of Florida, now codified in Chapter 768, Florida Statutes. Part of this legislative package included the creation of the Fund. This legislation was passed in response to a medical malpractice insurance crisis which arose when the primary underwriter for the Florida Medical Association sought to stop issuing medical malpractice policies in Florida, thus making it difficult, if not impossible, for physicians or hospitals to obtain medical malpractice insurance coverage at reasonable rates. As a result of this problem, many physicians began to practice defensive medicine, curtail or abandon their practices or practice without coverage of any kind. The Fund is a private not-for-profit organization, participation in which is totally voluntary for its member-health care providers. Insofar as Petitioners are concerned, membership in the Fund is but one of several options available to provide legally required evidence of financial responsibility in order to obtain licensure as a hospital facility in Florida. Physicians, hospitals, health maintenance organizations and ambulatory surgical centers who become members of the Fund must maintain at least $100,000 in primary professional liability insurance. Membership in the Fund grants to each participant a limitation of liability above the $100,000 in primary coverage. To the extent that any settlement or judgment exceeds the primary coverage of the participant, it is paid by the Fund without limitation. The Fund is operated subject to the supervision and approval of a board of governors whose membership is required by law to consist of representatives of the insurance industry, the legal and medical professions, physicians' insurers, hospitals, hospitals' insurers and the general public. The Department is charged by statute with certain regulatory functions concerning the Fund. As the law existed in 1980 a base fee for Fund membership was set by statute at $500 for physicians, after an initial $1,000 enrollment fee for the first year of participation, and at $300 per bed for hospital members. The statute required the Department to set additional fees based upon the classifications of health care providers contained in the statute. In the event that base fees are insufficient to pay all claims asserted against the Fund for a given fund year, the Department is empowered, upon request of the Board of Governors of the Fund, to order assessments against Fund participants to meet any such deficiency. Under the original legislation, all classes of health care providers could be assessed unlimited amounts to make up any deficiencies. As a result of legislative amendments which became effective July 1, 1976, the amount which participants, other than hospitals, could be assessed was limited to the amount each Fund member had paid to join the Fund for that particular coverage year. 1976 legislative amendments also required that each fiscal year of the Fund, which runs from July 1 through June 30, be operated independently of preceding fiscal years, and further required that occurrences giving rise to claims in a particular fund year be paid only from fees or investment income on those fees collected for that particular year. Thus, it is entirely possible for the Fund to experience deficits in a given year, and yet hold surplus funds for other years. On March 14, 1983, the Department of Insurance issued a "Notice of Assessment for 1980-81 Fiscal Fund Year" (hereinafter called the "Notice of Assessment). (exh. 20) Notice of this Notice of Assessment was published in the Florida Administrative Weekly, March 25, 1983, Vol. 9, no. 12. The Notice of Assessment announced that the Insurance Commissioner intended to levy and authorize the Fund to collect an assessment in the amount of $23,684,511 from those health care providers that were members of the Fund in fund year 1980-81 (exh. 20). Each of the hospitals named as Petitioners in the Petition for Administrative Proceedings in Case Dos. 83-1067 and 83-1068 were members of the Florida Patient's Compensation Fund during the fund year 1980-1981. (exh. 40; P.H.S. V 1) The chart below contains the following information concerning fund year 1980-81: the amount of the total proposed assessment described in the Notice of Assessment (dated March 14, 1983); the amount of the losses experienced by doctors and hospitals, respectively; the amount of the fees originally paid by doctors and hospitals; and the amount of the proposed assessments for doctors and hospitals; 1980-1981 Fund Year - Total Assessment $23,684,511 DOCTORS HOSPITALS Losses $19,086,800 Losses $29,798,500 Fees Paid 4,299,117 Fees Paid 6,015,827 Assessments 4,322,233 Assessments 18,734,918 (P.H.S. V 9) The Department computed the portion of the assessment to be paid by the different classes of health care providers for the 1980-1981 fund year based upon an "indicated rate method." This method is represented by the following formula: The Department started with the actuarially indicated rate for each class of health care provider as described in the October, 1981 Actuarial Report prepared by Tillinghast, Nelson, et al. This is called the "indicated rate by class." The Department then applied the following formula for each class: Indicated Rate by Class x No. of Members in the Class = Total indicated fees by Class Total Indicated Fees by Class divided by total Indicated Fees for ALL Classes = Percentage of Indicated Fee by Class Percentage of Indicated Fee by Class x Total Expected Loss for ALL Classes = Expected Loss by Class (Expected loss is ALL losses for the fund year including claims previously paid, reserves established on claims asserted and IBNR [incurred but not reported].) (P.H.S. V 12) The "indicated rate method" for allocating assessments among the various classes of health care providers was selected by the Department as the method which most fairly reflected the classifications prescribed in Section 768.54(3)(c), Florida Statutes. The record in this proceeding establishes that this method is the most feasible mechanism for fairly reflecting classifications established by statute, and, at the same time, providing immediate funds necessary to meet all claims against the Fund. (P.H.S. V 13) The difference between the results derived by the "indicated rate method" and the amounts reflected in the Notice of Assessment is due to the application of the statutory cap on assessments against physician members, as applied by the Department of Insurance. (P.H.S. V 14) Exhibit #17 shows (a) the calculations utilized by the Department in spreading the assessments for the 1980-81 fund year, (b) the amount each class would have paid under the "indicated rate method" for the fund year 1980-81 and (c) the amount actually described in the 1980-81 Notice of Assessment of the Department of Insurance. The Notices of Assessment issued by the Department of Insurance for fund years 1980-1981 allocated the "excess assessments" (which could not be applied to physician members because the 768.54(3)(c)'s limitation on the amount physicians could be assessed) among the other classes of health care providers based upon their percentage of "expected losses." (P.H.S. V 16) The amounts of the assessments sought by the Fund, and described in the Notices of Assessment, were calculated by the Fund by using the following formula: Total fees paid during the Fund Year + Investment Income attributable to the Fund Year Expenses allocated to that Fund Year Amount paid on claims for that Fund Year Amount reserved for all known claims for that Fund Year. (P.H.S. V 17) The fees ordered by the Department of Insurance and collected by the Fund plus the interest income generated by such fees for fund year 1980-81 are inadequate to cover claims against the Fund for that year. (P.H.S. V 19) Petitioners, for purposes of this proceeding, do not contest: (a) the method by which the Fund establishes reserves; (b) the amount of the reserves established for any individual claim file; or (c) the amount of the total deficit described in the Notices of Assessment dated March 14, 1983 for fund year 1980-1981. Nonetheless, Petitioners do not concede that the Fund needs all of the money described in the Notice of Assessment dated March 14, 1983 at this time. (P.H.S. V 33,34) The record in this cause establishes that as of March 14, 1983, there existed a deficiency in the Fund's account for the 1980-1981 fund year of at least $23,684,511 for the payment of settlements, final judgments and reserves on existing and known claims. Approximately $19,405.00 of this deficit is directly attributable to one judgment - Von Stetina v. Florida Medical Center. This was a malpractice judgment against a hospital which has been affirmed on appeal by the First District Court. An appeal has been filed in the Florida Supreme Court. (exh. nos. 1, 2, 18, 19, 26, 27 and 38) In view of the statutory cap on the amounts that may be assessed against physician members of the Fund, the foregoing dollar amounts for assessments for the 1980-81 fund year, and the manner in which they are proposed to be allocated among the remaining classes of health care providers are appropriate. The original fees for the 1980-1981 fund year were set in June of 1980. The Fund by letter dated April 21, 1980 requested that the Department approve an increase in membership fees for physicians and surgeons in the amount of twenty-five (25) percent and a redefinition of rate classes that would move eighteen (18) percent of the physicians and surgeons from Class 3 to Class 2. The Department published notice in the Florida Administrative Weekly and notified interested parties on its mailing lists that a public hearing was to be held on June 2, 1980. This hearing was held pursuant to 627.351, 768.54, and Chapter 120, Florida Statutes. The purpose of the hearing was identified as "to afford the Fund an opportunity to present evidence and agreement in support of its filing and, further, to afford any affected person an opportunity to present evidence and argument relating to the filing." A hearing was in fact held on June 2, 1980. The Fund presented evidence and argument in support of its request for twenty-five (25) percent increase in fees. No parties argued or presented evidence contending that the fees should have been higher. Subsequent to the hearing, the Department notified the Fund by letter dated June 12, 1980 that its request was approved. Acting on the Department's approval, the Fund sent all prospective members of the Fund for the 1980-81 year membership forms. These forms notified each health care provider what the fees for membership for all health care providers would be. In order to join the Fund each health care provider was required to fill out and sign these forms, thereby agreeing to pay the membership fees and any future assessments which might be levied. Both Petitioners and Respondent have submitted proposed findings of fact for consideration by the Hearing Officer. To the extent that those proposed findings of fact are not included in this Recommended Order, they have been specifically rejected as being either irrelevant to the issues involved in this cause, or as not having been supported by evidence of record.
Findings Of Fact Petitioner, who is black, was hired by Respondent on September 28, 1987. Respondent is in the business of providing health care institutions with management personnel to supervise environmental-services employees of the institutions. The management personnel supplied by Respondent for the typical customer consist of an on-site director, assistant director, and several supervisors. Respondent hired Petitioner as a supervisor for assignment to Holmes Regional Medical Center (Holmes). At the time, Respondent had six employees working at Holmes. The responsibilities of a supervisor typically include the management of 10-25 persons. The management responsibilities require, among other things: 1) "daily informal walk-through inspections of each area"; 2) "formal written inspections of each area or the job supervised with the employee at least every month"; 3) "aggressive[ness] in becoming acquainted with all key hospital personnel"; 4) the "develop[ment of] a good professional relationship with each [key hospital employee]"; and 5) the recruitment of personnel to be hired by the customer for assignment to the supervisor's department. Petitioner had limited relevant experience before joining Respondent. Petitioner had operated his own janitorial business, but had limited experience in supervision. As was the case with all employees, Respondent provided Petitioner with a fairly extensive orientation and training process. Prior to assuming his supervisory responsibilities, Petitioner successfully completed the training program, although he showed signs of ignoring the Medi-Dyn way of doing things and adhering to the ways of his former janitorial business. On December 28, 1987, Petitioner received his three-month evaluation, which employed a five-point rating. Petitioner averaged ratings of about "3," but received "marginal" ratings of "4" in areas such as initiative, planning, development of subordinates, training effectiveness, administrative ability, organization, and personnel management. Petitioner was responsible for supervising various areas of Holmes, including certain outbuildings, primarily during the late-evening and early- morning shift. The condition of these areas did not improve following the three-month evaluation. On January 25, 1988, a Holmes representative sent Respondent's director, Jeff Wahlen, a memorandum listing several complaints concerning the cleanliness of the diagnostic services area, for which Petitioner was responsible. On February 4, 1988, a representative of a user of one of the outbuildings for which Petitioner was responsible sent Petitioner a letter expressing "deep concern and frustration over the highly unsatisfactory work by [Respondent] at our hospital." On February 8, 1988, the supervisor of the health and fitness area at the hospital sent Mr. Wahlen a memorandum complaining that the cleanliness of the health and fitness area, for which Petitioner was responsible, was "getting worse." On February 9, 1988, Mr. Wahlen sent a memorandum to Petitioner itemizing numerous ;operational concerns" and establishing deadlines for achieving corrections of the noted problems. All of these deadlines were within February. On February 10, 1988, a representative of the bloodmobile/donor center sent a memorandum to Mr. Wahlen objecting to the uncleanliness of their work areas. Mr. Wahlen met with Petitioner that day and discussed cleaning problems in the bloodmobile/donor center areas. On February 18, 1988, Mr. Wahlen sent Petitioner a follow-up memorandum. Mr. Wahlen reminded Petitioner that the February 9 memorandum required that several objectives should already have been satisfied, but Mr. Wahlen had not received confirmation that these matters had been taken care of. On February 29, 1988, the supervisor of the health and fitness center sent Petitioner a memorandum informing him that many items on checklists dating from the prior November had still not been addressed. She advised Petitioner that she was considering the termination of the center's contract with Respondent. On March 10, 1988, Petitioner received a six-month evaluation in which his performance was rated as marginal, and he was placed on probation for 45 days. Petitioner received various tasks that he was to complete during the probationary period. He subsequently completed a large number of them. From April 13-15, 1988, Alfred Tambolio, who is the national operations director for Respondent, conducted a hospital-wide audit of the Holmes facility. He found that the areas within Petitioner's responsibility were unclean and in unsatisfactory condition. A week or two later, Mr. Tambolio returned to Holmes for a follow-up inspection. While examining the operating room, for which Petitioner was responsible, a physician told Mr. Tambolio and Petitioner that the area was "filthy." Leaving the operating room, with which Petitioner had displayed insufficient familiarity, Mr. Tambolio asked Petitioner to take him to the labor and delivery area, for which Petitioner was also responsible. Petitioner was unable even to find the area, and they had to ask a hospital employee for directions. Numerous other problems surfaced and many problems previously identified by Mr. Tambolio had not been corrected. By memorandum dated May 13, 1988, Mr. Wahlen reviewed Mr. Tambolio's second visit and informed Petitioner that he was being terminated. Mr. Wahlen acknowledged that Petitioner had recently been recommended for a satisfactory evaluation, but that Mr. Wahlen had declined to approve the tentative evaluation. Mr. Wahlen explained that, in essence, Petitioner's realization of certain goals did not outweigh his failure to provide satisfactory service in many other respects. Respondent replaced Petitioner with a person of Hispanic origin. As of May 1, 1988, Respondent employed a total of five blacks, one Hispanic, and one American Indian among its 27 employees serving as supervisors, assistant directors, and directors. Two of the eight directors were black.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Petition for Relief filed by Petitioner be dismissed. ENTERED this 26th day of June, 1989, in Tallahassee, Florida. ROBERT E. MEALE 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 26th day of June, 1989. COPIES FURNISHED: Donald A. Griffin Executive Director Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Dana Baird, Esquire General Counsel Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Margaret Agerton, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Arthur Dennis, pro se 792 Cecilia Street Palm Bay, Florida 32909 Lynn Dunning Vice President, Operations Medi-Dyn, Inc. 8400 East Prentice Avenue Suite 800 Englewood, Colorado 80111
The Issue The issue in the case is whether the Petitioner qualifies as a “charitable institution” as defined at Section 212.08(7) (o)2.b., Florida Statutes, and is therefore entitled to a consumer certificate of taxation exemption.
Findings Of Fact The Junior League of Tampa, Inc., (League) is a non- profit corporation exempt from federal income tax under Section 501(c)3 of the Internal Revenue Code. The Articles of Incorporation for the League provide that the League is intended to foster member’s interests in local social, economic, educational, cultural, and civic conditions, and to make efficient use of members as volunteers. According to testimony offered at hearing, the purposes of the Junior League of Tampa are to offer social assistance to persons in the community, provide volunteers to various local organizations, and to offer volunteer training to League members. The League provides member education regarding issues of local concern by offering bus tours through area communities, attendance at government meetings (school board, county commission, etc.) and training sessions focusing on the operation and activities of the League. Members of the League pay dues which are used to support the administrative costs of the organization. Members of the League are expected to provide volunteer services to community organizations through the League. No services are provided directly to individuals. In addition to dues the League raises funds through local fund raising activities, including production of a cookbook and a thrift sale. Fund raising revenue is used to support community projects. According to the financial statements for the fiscal year ending May 31, 1995, the League’s total operational expenses (excluding depreciation) were about $400,000. Expenses were allocated between “program services” and “support services.” Total support services costs were approximately $269,000, including $94,576 for fund raising costs. Other costs allocated to support services included $103,827 in “administrative costs,” $11,089 in “association dues,” $20,493 in “membership expense” and almost $39,000 for the League’s membership publication, “The Sandspur.” None of the support services expenditures were directly related to the community or volunteer efforts of the League. Total program services costs were $131,655, including $21,642 for “program research and evaluation,” $25,876 for “association dues,” and $84,137 for “community projects.” “Program research and evaluation” costs include the expenses of the community advisory board which assists the League in determining local needs and evaluating projects. Additional program research costs include expenses related to development and evaluation of League projects, expenses related to sending Tampa League members to meetings of the national League, other membership expenses, expenses of a public relations campaign, expenses related to preparation of a member brochure describing volunteer opportunities, and “ad hoc training.” None of the expenses allocated to “program research and evaluation” are directly provided to recipient organizations through monetary donation or by provision of volunteers. Expenses identified as “program services/association dues” include $25,876 paid to the American Association of Junior Leagues. The national organization offers information related to the anticipated success of specific league projects. None of the expenses allocated to “association dues” are directly provided to recipient organizations through monetary donation or provision of volunteers. The “community projects” total expenditure of $84,137 represents actual funds donated by the League to recipient organizations. In addition to actual donations, members of the League provide hours of free volunteer service to local IRC 501(c)(3) organizations. During fiscal year 1985, League members provided 11,823 hours of volunteer service to local organizations and to the League’s own community projects. The League asserts that many League members providing volunteer services are professionals and that such services should be valued at approximately $10.00 per hour. The evidence fails to establish that the volunteer services provided require professional education or certification or that the volunteer services should be valued at any more than the minimum wage, $5.00 during the time period relevant to this proceeding. The League lists 22 local activities and organizations for which volunteer services were provided. The parties have stipulated that 12 of the 22 (Bereavement Camp, Kids Rights Fund, Child Life Program, Immunization, Ronald McDonald House, Parenting Power, Emergency Shelter, Georgia Flood Relief, Judeo Christian Health, Bay Area Legal Services, WestCoast Golden Services, and McDonald Training) are accepted as “charitable activities.” The Department asserts that the ten remaining activities and organizations do not meet the relevant definition of acceptable charitable services and can not be included in the League’s total charitable effort for purposes of tax exemption. The ten activities include Puppet Troupe, Children’s Museum, McKay Bay Learning Lab, Funbook, Tampa Tickets, Tampa Area Playground, Tampa Museum of Art, Tampa Bay Youth Orchestra, Musicale and Federated Club and H. B. Plant Museum. The “Puppet Troupe” consists of the preparation and performance of a puppet show for residents of nursing homes and for hospitalized children. The evidence fails to establish that the League's participation in Puppet Troupe is an acceptable charitable service for purposes of the tax determination. The Tampa Children’s Museum is an admission-charging, public museum, open to all, designed to provide learning opportunities for children and parents. The evidence fails to establish that the League's participation in Tampa Children's Museum is an acceptable charitable service for purposes of the tax determination. The McKay Bay Learning Lab offers educational programs to children of elementary school ages. The programs are targeted to special needs children, but are open to all. The evidence fails to establish that the League's participation in the McKay Bay Learning Lab is an acceptable charitable service for purposes of the tax determination. “Funbook” is a coloring book focused on Tampa history and distributed to hospitalized children. The evidence fails to establish that the League's participation in Funbook is an acceptable charitable service for purposes of the tax determination. “Tampa Tickets” is a grant of funds to the Tampa Performing Arts Center and is intended to subsidize the cost of admission to cultural events at the Center. The evidence fails to establish that the League's participation in Tampa Tickets is an acceptable charitable service for purposes of the tax determination. The Tampa Area Playground is a public playground which was constructed with funds and volunteer labor contributed by many local organizations including the League. The evidence fails to establish that the League's participation in the Tampa Area Playground is an acceptable charitable service for purposes of the tax determination. The Tampa Museum of Art is a public admission-charging museum for which the League funded a curriculum guide for use in local schools. The evidence fails to establish that the League's participation in the Tampa Museum of Art is an acceptable charitable service for purposes of the tax determination. The Tampa Bay Youth Orchestra received funds from the League directed towards purchasing musical instruments for children who could not afford them. The evidence fails to establish that the League's participation in the Tampa Bay Youth Orchestra is an acceptable charitable service for purposes of the tax determination. The Musicale and Federated Clubs is a performing arts organization. The League provided a grant of funds to cover the costs of termite treatment for the Club facility. The evidence fails to establish that the League's participation in the Musicale and Federated Clubs is an acceptable charitable service for purposes of the tax determination. The H. B. Plant Museum is a public admission-charging museum. The League contributed funds to purchase two computers used in the museum’s membership solicitation program. The evidence fails to establish that the League's participation in the H. B. Plant Museum is an acceptable charitable service for purposes of the tax determination. The evidence establishes that the McKay Bay Learning Lab, the Children’s Museum, the Tampa Museum of Art, and the H. B. Plant Museum are educational institutions, rather than charitable institutions. Expenditures of funds or volunteer time contributed to educational organizations which do not otherwise meet the requirements for qualification as charitable institutions are properly disallowed from the calculation of the League’s charitable effort. The evidence is insufficient to establish that expenditures related to the Puppet Troupe and Funbook projects, the Tampa Tickets program, the Tampa Area Playground, the Tampa bay Youth Orchestra, or the Musicale and Federated Clubs meet applicable requirements for qualification as a charitable expenditures by the League. Such expenditures are properly disallowed from the calculation of the League’s charitable effort. Based on examination of the total acceptable charitable effort of the League, both donations of volunteer time and actual funds, the evidence fails to establish that the sole or primary purpose of the League is to provide such services.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Revenue enter a Final Order denying the Petitioner’s application for renewal of a Consumer Certificate of Exemption. RECOMMENDED this 8th day of January, 1997, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 8th day of January, 1997. COPIES FURNISHED: Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Jeremy P. Ross, Esquire Bush, Ross, Gardner, Warren and Rudy, P.A. 220 South Franklin Street Tampa, Florida 33602 Ruth Ann Smith, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Tel-World Ministries (petitioner), is a private, non-profit association formed on January 24, 1996. According to its articles of association, petitioner was formed "to operate for the advancement of religion, religious education and charitable purposes, by the distribution of its funds for such purposes, and in particularly to promote understanding and truth and save soul's in Christ Jesus." Its president is Frederick J. Hoffman, a resident of Holly Hill, Florida. Respondent, Department of Revenue (DOR), is charged with the responsibility of administering and implementing the Florida Revenue Act of 1949, as amended. It has the specific task of collecting sales taxes and enforcing the State Tax Code and rules. By law, certain transactions are exempt from the state sales and use tax. Among these are sales or lease transactions by qualified "charitable" or "religious" institutions. In order for an organization to be entitled to an exemption, it must make application with DOR for a consumer's certificate of exemption and demonstrate that it is a qualified religious or charitble organization within the meaning of the law. Once the application is approved, the certificate entitles the holder to make tax-exempt purchases that are otherwise taxable under Chapter 212, Florida Statutes. Claiming that it was entitled to a certificate of exemption as either a religious or charitable organization, petitioner filed an application with DOR on an undisclosed date in early 1996. The application itself has not been offered into evidence. After requesting additional information, on April 26, 1996, DOR preliminarily disapproved the application on the grounds petitioner did not qualify under the statutory definition of a religious institution, and it did not have as its primary purpose one of seven defined charitable purposes set forth in the law. Thereafter, petitioner filed a request for hearing to contest this decision. In its request for hearing, petitioner contended, among other things, that DOR had failed to consider the legislative intent of the law, failed to consider an amendment to the application, and failed to properly interpret its own rules and the general law. Petitioner agrees it is not a church but rather is a ministry. It has no building or established physical location from which it provides charitable or religious services. As described by its president at hearing, its president, and perhaps two other officers, go to other churches, primarily the Seventh Day Adventist Church, and they "assist" the pastors of those churches by giving "input" at mass, prayer, and Bible study classes. The association also disseminates religious materials, including brochures and the like. Under Section 212.08(7)(o)2.b., Florida Statutes, a charitable institution is generally defined as an entity which holds a current exemption from the federal income tax under Section 501(c)(3) of the Internal Revenue Code. The entity must also have as its "sole or primary function" the provision of, or raising funds for organizations which provide, one of seven defined charitable services, if a reasonable percentage of such services is provided free of charge, or at a substantially reduced cost, to persons who are unable to pay for such services. The parties agree that petitioner has a current exemption from the federal income tax under section 501(c)(3) and, in this respect, it meets the statutory requirements. Petitioner contends that its sole or primary function is to provide services of the type that fall within the charitable purpose defined in subparagraph (IV) of the statute. That purpose is defined as being "(s)ocial welfare services including adoption placement, child care, community care for the elderly, and other social welfare services which clearly and substantially benefit a client population which is disadvantaged or suffers a hardship." According to petitioner, it does God's work at other churches by assisting those churches' pastors in saving souls, and thus these services fall within the broad definition of "social welfare services." However, within the narrow context of the statutory exemption, and when the term "social welfare services" is given its plain and ordinary meaning, religious or spiritual activities do not qualify as "charitable" services. In general terms, to qualify as a religious institution, an entity must be (a) a church, synagogue, or established physical place for worship at which nonprofit religious services and activities are regularly conducted and carried on, (b) a nonprofit corporation the sole purpose of which is to provide free transportation services to church members and attendees, (c) a "state, district or other governing or administrative office whose function is to assist or regulate the customary activities of religious organizations or members within the state or district organization," or (d) a corporation qualified as nonprofit under section 501(c)(3) that owns or operates a Florida television station. Petitioner has no "established physical place for worship," its sole purpose is not to provide free transportation services to church members and attendees, and it does not operate a television station. Thus, it cannot qualify under the first, second and fourth parts of the definition. Petitioner's president contends, however, that he represents the "state office" of Tel-World Ministries, and therefore the association meets that part of the test. It is noted that the only "office" within the entity is that found in Holly Hill and it is not a part of a larger organization. Under DOR policy, in order to pass muster as a state, district or administrative office, petitioner must be a part of a larger organization and, within the hierarchy of that larger organization, assist or regulate the activities of those beneath it in the organizational hierarchy. This interpretation of the law is found in prior agency orders and is deemed to be reasonable. Because petitioner does not comport with this policy, it cannot qualify as a "state administrative office" within the meaning of the law. In summary, while petitioner submitted evidence to show that it is engaged in laudable religious efforts, the entity itself does not qualify as a religious or charitable institution for tax purposes, and thus it is not entitled to a consumer certificate of exemption.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent enter a Final Order denying petitioner's application for a consumer certificate of exemption as a religious or charitable institution. DONE AND ENTERED this 7th day of August, 1996, in Tallahassee, Florida. DONALD R. ALEXANDER, 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 7th day of August, 1996. APPENDIX TO RECOMMENDED ORDER Respondent: Respondent's proposed findings, while substantially altered, have been adopted in substance. COPIES FURNISHED: Larry Fuchs, Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100 Linda Lettera, General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399-0100 Frederick J. Hoffman 1728 Derbyshire Road Holly Hill, Florida 32117 William B. Nickell, Esquire Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668
The Issue Did the Department of Children and Family Services (Department) improperly deny funds to Maurice Parkes for the purchase of bottled water?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: The Department is the agency of the State of Florida charged with the responsibility of administering the Medicaid Developmental Disabilities Home and Community-Based Services Waiver Program (Medicaid Waiver Program), the Family care program, and the provisions of in-home subsidies. Petitioner is a developmentally disabled child who lives in his family's home and receives numerous services from the Department for his developmental disability, medical, and physical problems. The services presently being furnished to Petitioner are funded through the Medicaid Waiver Program. The bottled water at issue is not funded through the Medicaid Waiver Program and would have to be funded through General Revenue funds. General Revenue funds appropriated by the legislature for the fiscal year 2001-2002 to the Department have largely been moved to the Medicaid Waiver Program to obtain the benefit of federal matching funds, which are provided at the rate of 55 cents for each 45 cents of state funds. The use of General Revenue Funds to obtain matching federal funds for the Medicaid Waiver Program allows the Department to service some of those developmentally disabled clients that are presently eligible for the Medicaid Waiver Program but have not been receiving services due to lack of funding. There are no uncommitted funds in the General Revenue category of the Developmental Services' budget that could be used to fund the purchase of bottled water for Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order denying Petitioner's request to provide him with bottled water. DONE AND ENTERED this 9th day of July, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 2002. COPIES FURNISHED: Frank H. Nagatani, Esquire Department of Children and Family Services 11351 Ulmerton Road, Suite 100 Largo, Florida 33778-1630 Maurice Parkes c/o Erika Parkes 2229 Bonita Way, South St. Petersburg, Florida 33712 Paul F. Flounlacker, Jr., Agency Clerk Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700 Josie Tomayo, General Counsel Department of Children and Family Services 1317 Winewood Boulevard Building 2, Room 204B Tallahassee, Florida 32399-0700
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, Community Health Charities of Florida (CHC), is entitled to an award of attorney's fees and costs as a "prevailing small business party" pursuant to Section 57.111, Florida Statutes (2008), by being a prevailing small business party in the underlying case of Community Health Charities of Florida, et. al v. Florida Department of Management Services, DOAH Case No. 07-3547, Recommended Order February 29, 2008; Final Order May 29, 2008. Also, at issue is whether the Respondent Agency's actions, with regard to the underlying case, were substantially justified or whether special circumstances exist which would render an award of attorney's fees and costs unjust.
Findings Of Fact This cause arose upon the filing of a motion or petition for attorney's fees and costs on July 22, 2008, by the Petitioners, CHC and the Charities (the American Liver Foundation, Cystic Fibrosis Foundation, Crohn's and Colitis Foundation, Prevent Blindness Florida, Children's Tumor Foundation, March of Dimes, Lupus Foundation of America, Florida Chapter, Florida Hospices and Palliative Care, Hemophilia Foundation of Greater Florida, National Parkinson Foundation, American Diabetes Association, Leukemia and Lymphoma Society, American Lung Association, ALS Association, Alzheimer's Association, Juvenile Diabetes Research Foundation, Arthritis Foundation, Florida SIDS Alliance, Sickle Cell Disease Association of Florida, Easter Seals Florida, St. Jude Children's Research Hospital, Muscular Dystrophy Association, Nami Florida, National Kidney Foundation, National Multiple Sclerosis Foundation, Huntington's Disease Society of America, and Association for Retarded Citizens). This attorney fee and cost motion was filed in connection with the above Charities having received distribution of undesignated contributions from the 2006 Florida State Employees' Charitable Campaign (FSECC). The Charities made application for the funds and then contested the initial decision of the Steering Committee charged with determining distribution of undesignated contributions (by fiscal agent area). Ultimately, after obtaining a Writ of Mandamus from the First District Court of Appeal, requiring an administrative proceeding and hearing before the Division of Administrative Hearings on the contested claims, the Charities received additional distribution of undesignated contributions. Those additional distributions represent an additional benefit the Charities received upon the entry of the Recommended Order and the Final Order in the underlying proceeding. Therefore, one Petitioner, CHC, in the motion for attorney's fees and costs asserts that it is thus a prevailing party and a small business for purposes of Section 57.111, Florida Statutes, and is entitled to an award of attorney's fees and costs. The Respondent is an Agency of the State of Florida with authority to establish an maintain the FSECC.1/ It administers the decision-making process involving distribution of undesignated funds and issued the Final Order in the original proceeding. The attorney fee and cost proceeding was initially assigned to Administrative Law Judge Charles Adams. Thereafter the case was re-assigned to Administrative Law Judge T. Kent Wetherell, II. He issued an Order, sua sponte, on July 29, 2008, instructing the Petitioners to show cause why the case should not be held in abeyance pending disposition of the appeal of the Final Order in Community Health Charities of Florida v. State of Florida, Department of Management Services, 1D08-3126, the appeal before the First District Court of Appeal. The Petitioners filed a response to the Order to Show Cause stating, in essence, that the issues preserved for appeal involved discreet claims under Section 120.56(4), Florida Statutes. The parties agreed that the portions of the Final Order in the underlying proceeding which granted undesignated fund distributions to the Charities were separable, and not the subject of the appeal to the First District Court of Appeal in the above-cited case. The parties thus stipulated that the case could proceed on the matter of fees and costs, notwithstanding the pending appeal. An Order was entered by Judge Wetherell on August 11, 2008, based upon the responses to the Order to Show Cause. The Order references the parties' agreement that the case could go forward notwithstanding the pending appeal of the Final Order in the underlying case and then, significantly, Judge Wetherell made the following finding: "a closer review of the motion [the motion seeking the award of attorney's fees and costs] reflects that the only Petitioner alleged to be a prevailing small business party entitled to an award of fees under that statute [Section 57.111, Florida Statutes] is Community Health Charities of Florida." Judge Wetherell thereupon proceeded to order that the case style be amended to identify Community Health Charities of Florida (CHC), as the "only Petitioner in this fee case." The Petitioner, CHC, is a Florida non-profit corporation that employs less than 25 full-time employees and has a net worth of less than two million dollars. It is a "federation" under the FSECC Act. A "federation" is defined as an umbrella agency that supplies "common fund raising, administrative and management services to . . . charitable constituent member organizations. . . ." Fla. Admin. Code R. 60L-39.0015(1)(j). Federations were required to file with the Committee (the Steering Committee) a Direct Local Certification Form, describing the direct services that each member charity provided in the various fiscal agent areas. In this capacity, the Petitioner CHC represented 27 member charities in the 2006 charitable campaign. Charitable organizations that provide "direct services in a local fiscal agent's area" are entitled to receive "the same percentage of undesignated funds as the percentage of designated funds they receive." § 110.181(2)(e), Fla. Stat. (2006). CHC is not a provider of services or direct services. Therefore, it, itself, did not receive any undesignated funds. The charitable organizations named above, are the entities which received undesignated funds related to direct services they provided in local fiscal agents' areas. Some received them through the initial decision of the subject Steering Committee, and some after the underlying administrative proceeding was litigated through Final Order. On February 28, 2007, the Steering Committee, under the Respondent's auspices, conducted a public meeting in which it found the charities named above provided direct services in 18 percent of the fiscal agent areas in which they had applied. The Committee therefore denied Charities their share of undesignated funds in the remaining fiscal agent areas. That Committee decision was announced by memorandum of March 12, 2007, which provided the Petitioners with a point of entry to dispute the initial decision in an administrative proceeding. On March 30, 2007, the Petitioners filed an Amended Petition which alleged that they had provided direct services in all the fiscal agent areas in which they applied for undesignated funds, and identified alleged deficiencies in the Committee's decision-making process. That Amended Petition was ultimately referred to the Division of Administrative Hearings for conduct of a formal proceeding, by Order of the First District Court of Appeal, requiring the Agency to refer the Amended Petition to the Division of Administrative Hearings. With the Amended Petition pending before the Division of Administrative Hearings, the Steering Committee called an unscheduled meeting on September 10, 2007, to further address the Petitioners' claims and re-visit the earlier decision denying some applications for undesignated funds. Thereafter, the Respondent changed its initial decision by increasing the percentages of fiscal agent areas where direct services were provided and undesignated funds awarded to the Petitioners, the Charities, as a result of the September 10, 2007, meeting. This percentage thus increased from 18 percent to 77 percent as a result of "additional review of material provided by Petitioners." The Respondent Agency ultimately rendered a Final Order that adopted the decision of the Statewide Steering Committee, approving 77 percent of the Petitioners' previous submittals, as well as the finding of the Administrative Law Judge with regard to the three additional member charities. The Respondent had maintained in the original proceeding that the Committee must limit its consideration to the Direct Local Certification Form. The Petitioners, on the other hand, argued that they were entitled to a de novo review of the Agency action before the Division of Administrative Hearings. Reserving ruling on that matter, Judge Adams permitted the Petitioners, at the Final Hearing, to introduce additional evidence of direct services provided in those fiscal agent areas in which their applications had been denied by the Committee. The issue of direct services was considered de novo before the Division. The judge considered not only the direct local services certification form, but also supporting evidence of direct services introduced by the Petitioners at the Final Hearing. On considering that evidence, the Administrative Law Judge found that three additional member charities, not previously approved by the Committee, had provided direct services, which entitled them to receive undesignated funds. The Final Order entered by the Respondent Agency adopted the Administrative Law Judge's ruling. No exceptions were filed to that Recommended Order, thus the Agency waived its appellate rights with respect to any issue it might have raised, and the Charities prevailed as to the relief they sought in the Amended Petition. In their affidavits filed with the Motion for Attorney's Fees and Costs on July 22, 2008, the attorneys Byrne and Hawkins, for the above-named Petitioners, stated that they were "retained" by those Petitioners, meaning all the above- named charities and also the Petitioner CHC. In the affidavits they stated that those Petitioners "incurred" the attorney's fees and costs to which the affidavits relate. As stated above, the attorney's fee Motion was filed and joined-in by all the above-named charities and CHC. The Petitioners in the underlying case, which was appealed to the First District Court of Appeal, were all the above-named charities and CHC. Nonetheless, the Petitioner CHC took the position at the hearing in this proceeding that an agreement or understanding existed with the affiliate charities, whereby CHC would bear the attorney's fees and costs on behalf of all the affiliate charities. CHC has an agreement concerning how revenue it receives is shared with its national office and member charities. CHC pays its national office a percentage of revenue. It sends money to the national office and the national office also sends an allocation of funds to CHC. CHC is a member of the Arlington, Virginia-based Community Health Charities of America. For the fiscal year beginning July 1, 2006, CHC withheld 25 percent of charitable donations from Florida employees to its affiliated charities as its fee. This is the maximum amount authorized by Florida law in order for it to participate in the FSECC. § 110.181(1)(h)1., Fla. Stat. (2006). In the 2006 campaign at issue, CHC did not file an application in its own name to the Steering Committee for receipt of undesignated funds. As Ms. Cooper testified "we did not apply." CHC received no allocation or award of undesignated funds either in the initial Steering Committee consideration process or as a result of the underlying proceeding through the Agency's Final Order. All the undesignated fund distributions were made to the charities themselves, who were the entities who filed applications to the Steering Committee seeking receipt of undesignated funds. The Steering Committee, which made the initial decisions about distribution of undesignated funds is composed of appointed volunteers. The members of the committee are not compensated and do not have support staff to assist them in their fact-finding review of applications concerning receipt of undesignated funds. The committee members personally review all applications. Review of the applications takes many hours by each member of the committee, much more time than is spent in actual committee meetings. The combined net worth and number of employees of some or all of the Charities, was not established. It was not established that the net worth of one or more of the charities filing this Motion for Attorney's Fees and participating as Petitioners in the underlying case, is less than two million dollars, nor that one or more of them have less than 25 employees. The legislature appropriated $17,000.00 dollars to DMS to administer the FSECC for 2006. Substantially more than that appropriated sum has been expended by DMS to administer the campaign. DMS has no insurance coverage which would pay attorney's fees and costs if they were awarded. DMS is also subject to at least a four percent budget "hold back" for the current fiscal year and is contemplating laying off employees in January 2009, due to budget reductions. If DMS is ordered to pay attorney's fees and costs to CHC, DMS will bill the fiscal agent, United Way, for payment of those amounts from the FSECC charitable contributions. Contrary to the situation with the Petitioner Charities, who made the original filing of the Amended Petition in the underlying case and were named as parties in the filing of the Motion for Attorney's Fees at issue in this case, CHC did offer evidence that its net worth was less than two million dollars and that it had less than 25 employees. Thus, it established this threshold for being considered a small business party. It is also true, however, that the Recommended Order from the Administrative Law Judge and the Final Order from the Agency in the underlying proceeding specifically make no mention of CHC as a prevailing party and award nothing of benefit to CHC, as opposed to the other actual charities, who filed the subject applications.
The Issue The issue in this case is whether Petitioner, Affordable Home Ownership Corporation, is eligible for a consumer certificate of exemption as a charitable institution pursuant to Section 212.08(7)(o), Florida Statutes.
Findings Of Fact Petitioner, Affordable Home Ownership Corporation (hereinafter referred to as "AHO"), is a Florida nonprofit corporation. Respondent, the Department of Revenue (hereinafter referred to as the "Department"), is an agency of the State of Florida. Among other things, the Department is charged with responsibility for implementing and administering Florida tax laws, including Chapter 212, Florida Statutes. During 1996, AHO submitted an application for an exemption under Chapter 212, Florida Statutes, as a charitable organization. According to the Articles of Corporation of AHO, its purpose is: To raise the economic, educational and social levels of the underprivileged residents of Lake City (Columbia County), Florida, and its trade area, who are substantially underemployed and have low income, by fostering and promoting community-wide interest and concern for the problems of such residents, and to that end; Racial tension, prejudice, and discrimination of economic and otherwise may be eliminated; Sickness, poverty and crime may be lessened and; Educational and economic opportunities may be expanded among the residents of Lake City (Columbia County), Florida, and its trade area. To expand the opportunities available to said residents to own, manage, and operate business enterprises in economically underprivileged or depressed areas; to assist said residents and groups in developing management skills necessary for the successful operation of business enterprises; to provide financial support for the successful operation of business enterprises by said residents and to assist said residents in obtaining such financial support from other sources. To aid, support and assist by gifts, contributions or otherwise, other corporations, community chests, funds and foundations organized and operated exclusively for charitable, religious, scientific, literary or educational purposes, no part of the net earnings of which inures to the benefit of any private shareholders or individuals, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legislation. To do any and all lawful activities which may be necessary, useful or desirable for the furtherance, accomplishment, fostering or attainment of the foregoing purposes, either directly or indirectly, and either along or in conjunction or cooperation with others, whether such others be persons or organizations of any kind or nature such as corporations, firms, associations, trust, institutions, foundations, or governmental bureaus, departments or agencies. The Department conceded in its proposed recommended order that AHO meets the requirement for exemption in this matter that it be designated a Section 501(c)(3) charitable organization by the United States Internal Revenue Service. The services provided by AHO are provided without charge to its clients. Those services include recruiting families who are qualified for federal home loans who are committed and able to provide their time and labor to construct their own housing. AHO brings several such families together to share the labor and effort necessary to build housing for each family. Each family shares in the labor of constructing the home of each other family in the group. AHO assists the families prepare mortgage applications necessary to receive federally subsidized loans and provides credit counseling necessary for families to qualify for such loans. Once a family qualifies for a loan, AHO assists in the selection of house plans, the selection of construction materials, the organization of the family groups, teaches general construction techniques and assists with all aspects of completing construction of housing. AHO also assists in bookkeeping necessary to administer mortgage loans. AHO does not act as a general contractor. Nor does AHO provide construction labor or materials, or the funds necessary for construction. AHO receives administrative grants through the state's Housing Finance Agency as a Community Housing Development Organization. AHO's expenses in providing its services are entirely expenses of the organization. AHO's total expenditures are for its day-to-day operations. No funds are expended directly for clients.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Revenue denying the certificate of exemption sough by Affordable Home Ownership Corporation. DONE AND ORDERED this 2nd day of June, 1997, in Tallahassee, Leon County, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this this 2nd day of June, 1997. COPIES FURNISHED: Rufus L. Smith Executive Director, A.H.O.C. Affordable Home Ownership Corporation Post Office Box 7347 Lake City, Florida 32055 Kevin J. ODonnell Assistant General Counsel Department of Revenue Post Office Box 6668 Tallahassee, Florida 32314-6668 Linda Lettera General Counsel Department of Revenue 204 Carlton Building Tallahassee, Florida 32399 Larry Fuchs Executive Director Department of Revenue 104 Carlton Building Tallahassee, Florida 32399-0100
