00-003582 Gardens Of Daytona, Ltd. vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Thursday, October 19, 2000.

Summary: Read fairly, as a whole, application for allocation of low-income housing federal income tax credits makes 40/60 set-aside election, not 20/50 set-aside election. Corporation mis-scored other items in application.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GARDENS OF DAYTONA, LTD., )

)

Petitioner, )

)

vs. ) Case No. 00-3582

)

FLORIDA HOUSING FINANCE )

CORPORATION, )

)

Respondent. )

______________________________)

RECOMMENDED ORDER

Robert E. Meale, Administrative Law Judge of the Division of

Administrative Hearings, conducted the final hearing in

Tallahassee, Florida, on October 12-13, 2000.

APPEARANCES

For Petitioner: Jon C. Moyle, Jr.

Cathy M. Sellers

Moyle, Flanigan, Katz, Kollins,

Raymond & Sheehan, P.A.

The Perkins House

118 North Gadsden Street

Tallahassee, Florida 32301

For Respondent: Elizabeth G. Arthur

General Counsel

Florida Housin g Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue is whether Respondent properly scored Petitioner's

application for an allocation of low-income housing federal

income tax credits.

PRELIMINARY STATEMENT

By Petition for Formal Administrative Hearing Pursuant to

Sections 120.569 and 120.57(1), Florida Statutes, Petitioner

challenged the score and preliminary ranking that Respondent

assigned to Petitioner's application for the 2000 allocation of

low-income housing federal income tax credits.

The petition alleges that Petitioner made a scrivener's

error in checking the box corresponding to its selection of the

percentage of units to be set aside for low-income persons. The

petition alleges that Respondent's improper refusal to allow

Petitioner to correct this scrivener's error caused Petitioner's

application to lose a substantial number of points because the

remainder of Petitioner's application, such as its equity

commitment letter, assumed a different set-aside election than

the one shown in the application.

The petition alleges that Respondent improperly deducted

points for the form of the loan commitment letter because

Respondent declined to treat a deferred developer's fee as a

means of satisfying a condition in the loan commitment letter.

The petition alleges that Respondent improperly deducted

points for the omission from Petitioner's application of the name

of the environmental consultant certifying compliance with

environmental safety standards.

At the hearing, Petitioner called three witnesses and

offered into evidence 14 exhibits, counting subparts as separate

exhibits. Respondent called one witness and offered into

evidence two exhibits. The parties jointly offered one exhibit.

All exhibits were admitted except Petitioner Exhibits 3 and 6,

which were proffered.

The court reporter filed the Transcript on October 17, 2000.

FINDINGS OF FACT

1. Respondent is a not-for-profit corporation organized

under Section 420.504, Florida Statutes. Respondent's purpose is

to facilitate the construction of affordable housing in Florida

by assisting developers interested in providing such housing.

2. Respondent administers several affordable housing

programs. The program involved in this case is the competitive

housing credit (HC) program, which allocates the low-income

housing federal income tax credits allowed by Section 42,

Internal Revenue Code (Tax Credits). Developers use or, more

often, sell the Tax Credits to make their projects financially

feasible by offsetting the reduced income characteristically

generated by affordable housing.

3. The HC program allocates Tax Credits to those projects

that Respondent determines best serve the affordable housing

needs of Florida residents. The allocation process is

competitive because Section 42, Internal Revenue Code, allocates

to each state a limited amount of Tax Credits. Each year,

developers propose projects whose collective qualified basis

would yield many more Tax Credits than Florida is allocated under

Section 42; this year, for instance, Respondent could have

allocated four times the amount of Tax Credits actually

available.

4. To allocate the available Tax Credits, Respondent has

established a competitive process. In the first stage,

Respondent assigns preliminary scores to each completed

application and then ranks the applications by their scores. The

application with the most points tentatively receives the first

Tax Credits to be allocated, and this process is repeated with

the remaining applications, in their order of ranking, until the

available Tax Credits are exhausted.

5. In the second stage, Respondent invites those applicants

whose applications have tentatively received an allocation of Tax

Credits to enter credit underwriting. Credit underwriting

involves a more detailed examination of each application, during

which time applicants may make certain revisions in their

proposed projects. At the conclusion of credit underwriting,

Respondent makes final allocations of Tax Credits to specific

proposed projects.

6. This case involves the preliminary scoring that precedes

credit underwriting. This case raises the issue of the accuracy

of Respondent's scoring of one or two items in Petitioner's

application: the loan commitment letter and, if the next issue

is resolved in Petitioner's favor, the equity commitment letter.

However, the most important issue in this case requires a

determination of the extent to which, during the preliminary

scoring process, an applicant may revise or correct the set-aside

election made in its application or, in the alternative, the

necessity, if any, that Petitioner attempt to make such a

revision or correction. A minor issue in this case is the

propriety of certain penalties that Respondent imposed.

7. During the hearing, the parties stipulated that the

Administrative Law Judge was not to attempt a comprehensive

rescoring of Petitioner's application, if he were to sustain any

portion of Petitioner's challenge. As explained by Respondent's

witness, scoring involves a myriad of contingencies and, if

presented with any items requiring rescoring, Respondent's

employees running the scoring spreadsheet would require as much

as one hour to recalculate Petitioner's score. Thus, the parties

agreed that Respondent would perform any recalculation within one

business day following the issuance of the recommended order,

although, of course, performing the recalculation would not waive

Respondent's right to file any exceptions that it deems necessary

or otherwise oppose any recommended changes to the scoring of

Petitioner's application.

8. The parties also agreed upon an expedited schedule for

post-hearing filings. The parties agreed to file their proposed

recommended orders by 9:00 a.m. on October 19, 2000, serving the

Administrative Law Judge by e-mail the prior evening. The

Administrative Law Judge agreed to issue the recommended order on

or before October 20, 2000. The parties further agreed to file

exceptions on or before October 23, 2000, and any responses to

exceptions on or before October 25, 2000. The parties and

Administrative Law Judge have agreed upon this expedited filing

schedule because the last opportunity for Petitioner to receive

Tax Credits for the cycle for which it applied would require

final action by Respondent's board at its October 27, 2000,

meeting.

9. The application for the subject cycle of the HC program

comprises 24 Forms requesting detailed information. Respondent

imposes a deadline by which all applicants must submit their

completed applications. Following this deadline, Respondent

conducts the preliminary scoring.

10. The HC program has a maximum of 632 points, divided as

follows: Form 1--0 points; Form 2 - -2 points; Form 3--85 points;

Form 4--150 points; Form 5 - -20 points; Form 6--5 points;

Form 7 - -106 po ints; Form 8 - -44 points; Form 9--100 points;

Form 10--10 points; Form 11--50 points; Form 12--35 points;

Form 13 - -0 points; Form 14--45 points; Form 15--10 points;

Form 16 - -25 points; Form 17--95 points; Form 18--15 points;

Form 19 - -0 points; Form 20--50 p oints; Form 21--30 points;

Form 22 - -30 points; Form 23--0 points; and Form 24--0 points.

11. The application forms impose minor penalties for the

failure of an application to provide "complete, accurate

information in the format and location prescribed by the

instructions . . .." Any such omissions or inaccuracies in any

or all of Forms 1-4 result in a 2.5 point penalty. In other

words, omissions or inaccuracies in one or all four of these

Forms result in a single 2.5 point penalty. Any such omissions

or inaccuracies in any or all of Forms 5-10 result in a 1.5 point

penalty. Any such omissions or inaccuracies in any or all of

Forms 11-13 result in a 1 point penalty. Any such omissions or

inaccuracies in one or all of Forms 14-19 result in a 1 point

penalty. Any such omissions or inaccuracies in one or all of

Forms 20-24 result in a 1 point penalty.

12. Petitioner does not contest the 1 point penalty that

Respondent has imposed for the erroneous entry, described below,

at Form 20, Item I. However, Petitioner contests Respondent's

scoring of other Items and assessment of other penalties, based

on the election made at Form 20, Item I. These scoring and

penalty issues include, but may not be limited to, the 2.5 point

penalty imposed on Forms 1-4 due to an inconsistency between the

set-aside information provided in Forms 1 and 20; up to 144.67

points lost in Form 4 due to the failure to meet the condition in

the equity commitment letter that the qualified basis

attributable to all 230 units qualify for Tax Credits; seven of

eight points lost in Form 10 for the deficiency in leveraging Tax

Credits due to the loss of nearly half of the expected Tax

Credits; and 30 points lost in Form 21 due to the determination

that the equity commitment letter is not firm and unconditional.

Petitioner claims that these lost points and penalty, together

with any points lost on Form 4 for the determination that the

loan commitment letter is not firm and unconditional and the 1.5

point penalty for an omission from the environmental safety

certification in Form 7, Exhibit D, improperly prevented

Petitioner's application from entering credit underwriting for an

allocation of Tax Credits.

13. Petitioner timely submitted its application for the HC

program. Form 1, Item I.A, of Petitioner's application states

that Petitioner is a limited partnership whose general partner,

Affordable Housing Solutions for Florida, Inc., is a

not -for -profit corporation. At present, Petitioner's general

partner owns 100 percent of the partnership interests. Form 1,

Item I.C, states that Heritage Affordable Development, Inc., is

the "co -developer," but has no ownership interest in Petitioner.

14. Form 1, Item II.A, describes the proposed project as a

rehabilitation of an existing development in Daytona Beach.

Form 1 ide ntifies a total of 230 residential units in the

project, which is to be known as Daytona Garden Apartments.

15. Form 1, Item IV, is a certification that is signed by

Petitioner. In relevant part, the certification states:

The Applicant and all Financial Beneficiaries

understand and agree that full points will be

awarded only in the event that all

information required by each form is provided

in accordance with the application

requirements. Failure to provide complete,

accurate information in the format and

location prescribed by the application will

result in a REDUCTION OF POINTS OR REJECTION

OF THE APPLICATION as indicated on each form.

Subject to the limited exceptions contained

within Rule 67-48.005, F.A.C., only

information contained within this application

will be considered for purposes of points

awarded or appealed. . . .

16. Most of the points at issue in this case arise from a

mistake that Respondent claims to have made in completing Form

20, Item I. This item requires the applicant to make a crucial

election for its proposed project. The two relevant choices are:

1) 20 percent of the units are set aside for persons earning no

more than 50 percent of the area median income (20/50) or 2) 40

percent of the units are set aside for persons earning no more

than 60 percent of the area median income (40/60). The

application notes clearly that, pursuant to federal regulation,

20/50 elections restrict all set-aside units to no more than 50

percent of the area median income.

17. The percentage of set-aside units determines the extent

to which the qualified basis of a project may yield Tax Credits.

The purpose of Section 42, Internal Revenue Code, and the HC

program is to facilitate the development of affordable housing.

The set-aside election assures that the developer will reserve a

certain percentage of units in the project for reduced-income

residents.

18. The 40/60 election means that the developer is setting

aside a minimum of 40 percent of the units for residents earning

no more than 60 percent of the area median income. The developer

may choose to set aside for such reduced-income residents a

greater percentage of the units in order to qualify for more Tax

Credits. The 20/50 election offers the developer the same type

of option, but, due to the cited federal regulation, the

developer may only claim additional Tax Credits for units set

aside for residents earning no more than 50 percent--not 60

percent--of the area median income.

19. In making its election on Form 20, Item I, Petitioner

placed an x in the box for the 20/50 election. Petitioner claims

to have intended to have placed an x in the box for the 40/60

election.

20. As already noted, the 20/50 election precludes the

allocation of any Tax Credits for units set aside for residents

earning more than 50 percent of the area median income. However,

Petitioner's application sets aside nearly half of its 230 units

for residents earning 60 percent of the area median income, and

the application anticipates receiving tax credits for these

set -asides, as well as the set-as ides for residents earning 50

percent or less of the area median income.

21. Numerous elements in Petitioner's application reveal

Petitioner's expectation to qualify the entire basis of its

project for Tax Credits. For instance, Form 1, Item III.E, shows

that 100 percent of the 230 units are set aside. However, a note

at the top of this sub-item warns: "If the set-aside percentage

and the Number of Residential Units shown in Items E, F, G and H

are found to be inconsistent with other forms in the Application,

the information contained in Form. . . 20 for [the HC program]

WILL BE RELIED UPON."

22. Form 10, which calculates the leveraging effect of

allocated tax credits based on the number of set-aside units,

similarly reveals the expectation that 230 units would be set

aside for lower-income residents and, thus, eligible for

generating Tax Credits.

23. On Form 20, Item III, Petitioner provided additional

evidence of its expectation to obtain tax credits for all 230 of

its set-aside units. Item III shows Petitioner's commitment to

set aside 15.65 percent of the units for residents earning not

more than 33 percent of the area median income, 36.09 percent of

the units for residents earning not more than 50 percent of the

area median income, and 48.26 percent for residents earning not

more than 60 percent of the area median income. Form 20, Item

III, requires the applicant to represent that it will maintain

these set-aside percentages--clear evidence that the applicant is

anticipating Tax Credits for all of the set-asides scheduled in

Form 20, Item III.

24. As a whole, though, the application reveals only that

Petitioner expected to obtain Tax Credits for all 230 units. If

the application, construed as a whole, were to represent the

20/50 election, nothing in the application reveals whether

Petitioner's expectation to obtain a larger amount of Tax Credits

emerged from a scrivener's error in marking the 20/50 election,

rather than the 40/60 election, as Petitioner contends, or a

failure to understand the regulatory limitation imposed upon the

20/50 election. Nothing in the application actually mentions a

40/60 election, and Petitioner did not attempt to address the

apparent 20/50 election until after the deadline for submitting

applications.

25. One of Petitioner's witnesses was a vice president of

Heritage Affordable Development, Inc. She testified that her job

imposed upon her numerous responsibilities in preparing

Petitioner's application, including the task of placing the x in

the box for the 40/60 election, and she mistakenly placed the x

in the box for the 20/50 election. This is the only direct

evidence in the record indicating whether the 20/50 election was

due to a misunderstanding of the federal regulation limiting the

use of the 20/50 election or a mistake in checking the right box

on the form.

26. Although her testimony is self-serving, Petitioner's

witness testified in a forthright manner, as she described her

hurried and fatigued efforts to complete the application by the

deadline. The Administrative Law Judge credits her testimony

that she intended to check the 40/60 election, but, in her haste,

checked the 20/50 election, and time did not permit her to

discover her error until after she had submitted Petitioner's

application.

27. However, even if Petitioner's election were treated as

a scrivener's error, the question would remain whether the

correction of such an error would materially affect Petitioner's

application. An extensive review of recent case law reveals no

better definition of what is "material" than that offered by

Respondent's witness, who testified that something is material if

it affects the outcome. In other words, something is material if

it is consequential.

28. Changing a 20/40 set-aside election to a 40/60

set -aside election would be undeniably material to Pet itioner's

application. If the application effectively makes the 20/50

election, absent changing its election, Petitioner would suffer

the major consequence of the loss of eligibility for Tax Credits

for nearly half of the 230 units to be developed.

29. Thus, the only way that the proposed change may be

deemed inconsequential or immaterial is if the application,

fairly construed, as a whole, already makes the 40/60 election,

and Petitioner seeks only to clarify this election in Form 20,

Item 1.

30. As already noted, Form 20 expressly supersedes any

contrary set-aside information in Form 1. The express deference

in Form 1, Item II.E, to the set-aside information contained in

Form 20, as well as the reference to "other forms in the

Application," sufficiently notifies the careful reader of the

application that the set-aside information in Form 20 is the

definitive expression of the actual set-aside election contained

in each application.

31. However, Form 20 itself is contradictory concerning the

set-aside election. The clear and first expression of the set-

aside commitment in Form 20 chooses the 20/50 set-aside, but the

second, more detailed (and thus less amenable to misstatement)

expression of the set-aside commitment reveals the choice of the

40/60 set-aside in the set-aside schedule.

32. The resulting ambiguity in Form 20 requires, under the

case law discussed in the Conclusions of Law, consideration of

the two provisions in Form 20, in pari materia , in an effort to

discern the true meaning of this document in terms of the set-

aside election. Construed together, as well as with the many

other Items reflecting a 40/60 election and the absence of any

other Items reflecting a 20/50 election, the application, as a

whole, evidences a 40/60 set-aside election.

33. As already noted, the determination that Petitioner's

application effectively makes the 40/60 set-aside election

affects the scoring of other Items.

34. Most directly, Petitioner challenges the assessment of

a 2.5 point penalty for the discrepancy between the set-asides

elected in Form 20, Item I, and the set-asides shown in Form 1,

Item II.E. Respondent may not assess a penalty on Form 1 because

the set-asides shown in Form 1, Item II.E, are not incorrect.

Although they are inconsistent with the set-aside election shown

in Form 20, Item I, the error is in the latter Item, and

Respondent has already assessed a penalty for this mistake.

35. However, Respondent relied on another basis for the

assessment of the 2.5 point penalty for Forms 1-4. Although the

record is largely undeveloped on this point, Petitioner has

failed to show that its provision of a utility allowance is not

flawed by an omission of the utility provider in Form 1,

Exhibit H. Thus, Petitioner has failed to prove that the 2.5

point penalty for Forms 1-4 is incorrect.

36. A more important scoring issue that arises from the

determination of the actual set-aside election involves Form 4,

Exhibit B, which is the equity commitment letter issued on

February 29, 2000, by SunAmerica Affordable Housing Partners,

Inc. This is a firm undertaking by SunAmerica Affordable Housing

Partners, Inc., to cause its affiliate to purchase a 99.9 percent

limited partnership interest in Petitioner for a specified sum.

The equity commitment letter requires that Petitioner obtain a

specified amount of Tax Credits based on a determination that the

qualified basis attributable to all 230 units is eligible for Tax

Credits because all 230 units are set aside for reduced-income

residents.

37. Respondent allowed no points for the equity commitment

letter because it was conditioned on all 230 units being set

aside for reduced-income residents. However, as determined

above, the application, fairly construed as a whole, makes the

40/60 election and thus satisfies this condition in the equity

commitment letter.

38. At the hearing, Respondent's witness, acknowledging

that the apparent 20/50 election was the major reason why

Respondent gave Petitioner no points for the equity commitment

letter, testified that additional reasons existed for at least

deducting points from the letter, as a conditional, rather than

firm, commitment to purchase an equity interest in Petitioner.

39. Form 4, page 4 of 14, describes the requirements

imposed upon an equity commitment letter:

A firm commitment from a Housing Credit

Syndicator . . . is an agreement which is

executed and accepted by all parties, is

dated, and includes all terms and conditions

of the agreement. . . . In order for a

syndication/equity commitment to be scored

firm, it must state the syndication rate

(amount of equity being provided divided by

the anticipated amount of credits the

syndicator expects to receive), capital

contribution pay-in schedule (stating the

amounts to be paid prior to or simultaneous

with the closing of construction financing

and stating the amounts to be paid prior to

closing of permanent financing, or in the

event of a construction/permanent first

mortgage, the amount to be paid prior to or

simultaneous with the closing of construction

financing and state the amounts to be paid

prior to conversion to permanent financing),

the percentage of the anticipated amount of

credit allocation being purchased, and the

anticipated housing credit allocation.

40. Respondent's witness testified that the equity

commitment letter fails to include a syndication rate and

possibly a capital contribution pay-in schedule.

41. However, as Respondent's witness admitted, the

syndication rate is evident from the information contained in the

equity commitment letter. As noted in the cited provision from

Form 4, the syndication rate is the equity provided divided by

the anticipated Tax Credits allocated to the syndicator. Using

the information contained in the equity commitment letter,

SunAmerica Affordable Housing Partners, Inc., is purchasing a

partnership interest that will entitle it to 99.9 percent of the

$7,380,700 in Tax Credits, or $7,373,319 in Tax Credits.

Dividing SunAmerica's equity contribution of $5,906,032 by its

share of Tax Credits yields the syndication rate of 80.1 percent.

42. Likewise, the equity commitment letter adequately

describes the capital contribution pay-in schedule. The equity

commitment letter calls for SunAmerica to pay $3,248,317 upon the

closing of the amended partnership agreement; $2,362,413 upon the

commencement of construction (matched dollar-for-dollar with

construction financing) and upon the satisfaction of the standard

conditions set forth in SunAmerica's standard form partnership

agreements; and $295,302 upon the commencement of amortization of

the permanent loan, receipt of an audited cost certification of

eligible basis, receipt of certain forms for the entire

development; and satisfaction of the standard conditions set

forth in SunAmerica's standard form partnership agreement. The

adjuster clause, which reduces SunAmerica's capital

contributions, dollar-for-dollar, for any reductions in actual

Tax Credits is a standard provision in equity commitment letters

and does not mean that the letter is firm and unconditional.

43. Petitioner has thus proved that it is entitled to all

available points for its equity commitment letter.

44. Lastly, Petitioner has proved that it is entitled to

additional points on Form 10 for leveraging Tax Credits.

Respondent allowed only 2.55 points out of 10 points for Form 10

due to its treatment of the application as making the 20/50

election and thus the loss of nearly half of the set-aside units.

Treating the application as making the 40/60 election results in

Petitioner earning 9 points on Form 10.

45. Form 4, Exhibit C, is the loan commitment letter

issued on February 22, 2000, by SunAmerica, Inc. This is a firm

undertaking by SunAmerica, Inc., to lend funds to Petitioner,

subject only to the kinds of conditions that Respondent typically

and reasonably determines are customary and not so substantive as

to preclude a determination that the letter is firm and

unconditional.

46. Respondent allowed no points for the loan commitment

letter because the letter requires that, prior to the loan

closing, Petitioner and its guarantor (its sole owner and general

partner, Affordable Housing Solutions for Florida, Inc.) "submit

evidence satisfactory to [SunAmerica, Inc.] that [Petitioner] has

invested at least $50,000 in the Property in the form of equity

or unsecured debt." Petitioner relied in its application on the

deferral of a developer's fee of $559,503.07 for a period of up

to ten years to satisfy this requirement of the loan commitment

letter.

47. In this case, the co-developer, Heritage Affordable

Development, Inc., has agreed to defer its developer's fee.

Neither the lender nor Respondent has raised a question

concerning the source of the funds derived from the deferral of

the developer's fee. In essence, the lender is requiring the

addition of $50,000 in funds without the dilution of ownership

interests or creation of secured debt; thus, it is irrelevant

that the source of the funds is a co -developer, rather than

Petitioner itself or Petitioner's general partner.

48. Because Petitioner is obligated eventually to pay the

deferred developer's fee, Respondent correctly determined that

the deferred developer's fee does not qualify as equity.

Inexplicably, though, Respondent seems not to have seriously

considered whether the deferred developer's fee qualifies as

unsecured debt. As already noted, the loan commitment letter

requires $50,000 of either equity or unsecured debt.

49. A deferred developer's fee is unsecured debt.

Deferring a developer's fee executes in a single step the two-

step transaction in which Petitioner pays the developer the

subject portion of the developer's fee, and the developer

immediately lends it back to Petitioner, taking an unsecured note

in return.

50. When informed of the issue, the lender itself

acknowledged the obvious, by letter dated October 9, 2000, that

the deferred developer's fee is unsecured debt.

51. Petitioner has thus proved that it is entitled to all

available points for its loan commitment letter.

52. Form 7, Exhibit D, is the Verification of Environmental

Safety. This is a certificate by an environmental consultant

that the site of the proposed development is free of potential

problems, such as asbestos or lead-based paint in existing

structures.

53. The form initially generated by Respondent contains

three lines at the top for the identification of the proposed

developer and development, but inadvertently omits underlining in

the main body of the certificate where the name of the

environmental consultant is to be placed. The original form

contains a parenthetical explanation in smaller type that states:

"(Name of Firm which prepared the Phase I Environmental Report)."

54. As already noted, the application imposes penalties for

the "failure to provide complete, accurate information in the

format and location prescribed by the instructions . . .."

Relatively minor in amount and sparingly assessed, as in a single

penalty regardless of the number of errors in a series of Forms,

penalties rightly punish deviations from strict, technical, and

formal compliance with the demands imposed by the Forms.

Petitioner's challenge of the assessment of a 1.5 point penalty

for the obvious omission in Form 7, Exhibit D, unjustifiably

attempts to substitute the substantive considerations that govern

scoring for the formal considerations that govern assessing

penalties.

55. In any event, the omission from Form 7, Exhibit D, is

substantial. Following the space for the name of the

environmental consultant, Form 7 then provides the substance of

the certification: "[X, Inc.] hereby certifies that a Phase I

Environmental Assessment of the above proposed Development Site

. . . was performed by this firm and a detailed report . . . was

prepared." The omission of the name of the environmental

consultant, coupled with a signature that poorly communicates the

idea that the signatory is signing in a representative capacity

on behalf of the environmental consultant, amply supports

Respondent's assessment of a 1.5 point penalty.

56. In summary, Petitioner has proved that Respondent has

mis-scored Petitioner's application by deducting points on Form 4

for an equity commitment letter and loan commitment letter that

are actually firm; deducting points on Form 10 for inadequate Tax

Credit leveraging; and deducting points on Form 21 for an equity

commitment letter that is actually firm. Respondent should

rescore Petitioner's application to correct these items and any

other items for which Petitioner lost points due to Respondent's

treatment of the application as making a 20/50 set-aside

election.

CONCLUSIONS OF LAW

57. The Division of Administrative Hearings has

jurisdiction over the subject matter. Section 120.57(1), Florida

Statutes. (All references to Sections are to Florida Statutes.

All references to Rules are to the Florida Administrative Code.)

58. Section 420.5093 authorizes Respondent to allocate Tax

Credits. Rule 67-48.002(81) establishes a qualified allocation

plan, pursuant to Section 42(m)(1)(B), Internal Revenue Code.

59. As an applicant, the burden of proof is on Petitioner

to show that Respondent mis-scored Petitioner's application.

Department of Transportation v. J. W. C. Company, Inc. , 396 So.

2d 778 (Fla. 1st DCA 1981).

60. The most difficult issue in this case is whether

Respondent improperly treated Petitioner as having made a 20/50

set-aside election, rather than a 40/60 set-aside election.

61. Rule 67-48.004(3) provides in part:

All Applications must be complete, accurate,

legible and timely when submitted. All

Applications must be received by the

Application Deadline as specified in the

Notice of Funding or Credit Availability for

each Program. Neither Applications nor any

additional or replacement items will be

accepted by facsimile machine. Subject to

the limited exceptions contained within Rule

67-48.005, F.A.C., once the Application has

been received by the Corporation, no

additions, deletions, or changes will be

accepted for Application or scoring purposes.

62. Rule 67-48.005(1)(a) provides in part: "In its

petition for review, the Applicant shall have the opportunity to

cure transpositional or scrivener's errors that do not otherwise

materially affect the Application . . .."

63. The checking of the box indicating the election of the

20/50 set-aside qualifies as a scrivener's error. See Wesley v.

State of Florida , 762 So. 2d 599 (Fla. 5th DCA 2000) ( per curiam )

(scrivener's error for trial judge to check wrong box next to

"adjudicated guilty" when judge meant to check "adjudication

withheld").

64. However, any change from a 20/50 election to a 40/60

election would materially affect Petitioner's application by

substantially increasing the amount of Tax Credits for which the

proposed project may be eligible. Thus, if the application,

fairly construed, as a whole, makes a 20/50 election, Petitioner

may not prove its claim that Respondent mis-scored Petitioner's

application by relying on the rule allowing corrections of

scrivener's error, because the effect of the correction would

materially affect Petitioner's application.

65. Thus, the only means by which Petitioner may obtain

additional points in connection with the several items driven by

the set-aside election is if the application, fairly construed,

as a whole, makes a 40/60 election. If so, Petitioner's attempt

to correct the election shown on Form 20, Item I, either would be

unnecessary or immaterial.

66. The interpretation of conflicting language in a

document requires consideration of all of the provisions, in pari

materia , in an attempt to determine intent. Cf. Dune I, Inc. v.

Palms North Owners Association, Inc. , 605 So. 2d 903, 905 (Fla.

1st DCA 1992).

67. Construed as a whole, even without regard to

Petitioner's intent, the application reveals a 40/60 election.

Obviously, the intent of the person responsible for completing

the application reinforces this interpretation of the

application.

68. This conclusion is driven by the facts unique to this

case and does not undermine the rule requiring the submittal of

complete applications by the deadline or the rule carving out a

well-defined exception for scrivener's errors. This is not a

case in which an applicant is trying to enlarge its proposed

project while in preliminary scoring. This is not a case in

which an applicant is trying to change the identity of the

developer while in preliminary scoring. This is not a case in

which an applicant is trying to change the location of the

proposed project while in preliminary scoring. This is not even

a case in which an applicant is trying to change its set-aside

election while in preliminary scoring. This is a case in which

an applicant is merely attempting to require that, despite the

applicant's carelessness in preparing Form 20, Item 1 (for which

a penalty is entirely appropriate), Respondent give effect to the

40/60 set-aside election made in the applicant's application,

construed fairly, as a whole.

RECOMMENDATION

It is

RECOMMENDED that the Florida Housing Finance Corporation

rescore Petitioner's application to reflect the findings and

conclusions contained in this recommended order and, if the

resulting score is sufficiently high, invite Petitioner to credit

underwriting.

DONE AND ENTERED this 19th day of October, 2000, in

Tallahassee, Leon County, Florida.

___________________________________

ROBERT E. MEALE

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 19th day of October, 2000.

COPIES FURNISHED:

Pamela Duncan, Acting Executive Director

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

Jon C. Moyle, Jr.

Cathy M. sellers

Moyle, Flanigan, Katz, Kollins,

Raymond & Sheehan, P.A.

The Perkins House

118 North Gadsden Street

Tallahassee, Florida 32301

Elizabeth G. Arthur

General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

the timeframes set forth in this recommended order. Any

exceptions to this recommended order must be filed with the

agency that will issue the final order in this case.