00-004287 Lakesmart Associates, Ltd. vs. Florida Housing Finance Corporation
 Status: Closed
Recommended Order on Wednesday, February 7, 2001.

View Dockets  
Summary: The issue was whether the Florida Housing Finance Corporation properly interpreted its rules for achieving a mandatory Non-Profit Set-Aside requiring that 12% of all available credits be awarded to non-profit entities. Petitions dismissed.





13Petitioner, )


16vs. ) Case No. 00-4287RU





29Respondent. )




37Petitioner, )


40vs. ) Case No. 00-4408RU





53Respondent. )





67Intervenors. )

69_______________________________ )


73The parties having been provided proper notice,

80Administrative Law Judge John G. Van Laningham of the Division

90of Administrative Hearings convened a formal hearing of this

99matter on December 11, 2000, in Tallahassee, Florida.


108For Petitioner: W. Douglas Moody, Jr., Esquir e

116(Lakesmart) Graham, Moody & Sox, P.A.

122215 South Monroe Street

126Tallahassee, Florida 32301

129For Petitioner: Robert S. Cohen, Esquire

135(RPK Associates) 1435 East Piedmont Drive, Suite 201-B

143Tallahassee, Florida 32312-2938

146Robert W. Turken, Esquire

150Bilzin, Sumberg, Dunn, Baena,

154Price & Axelrod, LLP

1582500 First Union Financial Center

163200 South Biscayne Boulevard

167Miami, Florida 33131-2336

170For Intervenors: David A. Barrett, Esquire

176Barrett & Associates

179111 South Monroe Street, Suite 3000

185Tallahassee, Florida 32302-0930

188For Respondent: Michael J. Glazer, Esquire

194Ausley & McMullen

197Post Office Box 391

201Tallahassee, Florida 3230 2

205Maureen McCarthy Daughton, Esquire

209Nabors, Giblin & Nickerson, P.A.

2141500 Mahan Drive, Suite 200

219Tallahassee, Florida 32308

222Elizabeth G. Arthur, Esquire

226Florida Housing Finance Corporation

230227 North Bron ough Street, Suite 5000

237Tallahassee, Florida 32301


244As the parties have stipulated, the issue in this case is

255whether Respondent Florida Housing Finance Corporation (the

262“Corporation”) properly interpreted Rule 67-48.032(2), Florida

268Administrative Code, and the corresponding provisions on the

276same subject found in paragraph 2, at page 2, of the

287Corporation’s 2000 Qualified Allocation Plan (collectively, the

"294Instructions"), when it applied the Instructions to determine

303the substantial interests of Petitioners and Intervenors.


312On October 17, 2000, Petitioner Lakesmart Associates, Ltd.

320(“Lakesmart”) filed a petition seeking an administrative

327determination that certain statements by the Corporation

334constituted invalid unadopted rules, initiating Case Number 00-

3424287RU. Petitioner RPK Associates, Ltd. (“RPK”) commenced Case

350Number 00 -4408RU by filing a similar petition on October 26,

3612000. On or about November 2, 2000, the Corporation moved to

372consolidate the two cases. An Order granting consolidation was

381entered on November 8, 2000. On November 8, 2000, Intervenors

391Meadow Glen, Ltd. and Coral Village II, Ltd. (“Meadow Glen” and

402“Coral Village”), filed their petition for joinder, seeking to

411join the petition of RPK. On November 9, 2000, an order was

423entered granting Intervenors leave to intervene in the

431consolidated cases.

433A Joint Prehearing Stipulation was filed December 8, 2000.

442In addition, on the day of the final hearing, the parties

453entered into and filed a separate Stipulation. In their

462Stipulation, the parties agreed that this matter should go

471forward as a proceeding under Section 120.57(1)(e), Florida

479Statutes, with the administrative law judge entering a

487recommended order pursuant to Section 120.57(1), Florida

494Statutes. The Stipulation further provided that the sole issue

503to be decided in the proceeding was whether the Corporation’s

513interpretation of the Instructions was proper. The parties

521agreed that the criteria set forth Section 120.57(1)(e)2,

529Florida Statutes, were not in dispute, except as necessary to

539determine the stipulated issue, and would require no proof by

549the Corporation. The administrative law judge accepted the

557parties’ Stipulation, which is hereby adopted and incorporated

565by reference, and deemed the pleadings to be amended to conform


577At the final hearing, Lakesmart presented the testimony of

586Gwen Lightfoot and Lloyd Boggio. Meadow Glen and Coral Village

596presented the testimony of Bowen Arnold. In addition,

604Petitioners’ Exhibits 1 through 8 were received into evidence.

613The Corporation presented the testimony of its Executive

621Director, Mark Kaplan. Respondent’s Exhibits 1 through 7 and 9

631through 12 were also admitted into evidence. Respondent’s

639Exhibits 13, 14, 15, and 16 were not admitted but were proffered

651by Respondent.

653Respondent’s Exhibit 8, as identified, consisted of

660portions of the deposition of Lloyd Boggio that the Corporation

670designated after the final hearing. In accordance with the

679administrative law judge’s instructions, the Corporation filed

686its designations on December 14, 2000, subject to the other

696parties’ objections. Intervenors timely objected to some of the

705Corporation’s deposition designations. Accordingly, the

710following rulings are made regarding Respondent’s Exhibit 8.

718Without objection, the portions of Mr. Boggio’s deposition

726designated by the Corporation that shall be received into

735evidence are: Page 4, Line 15 through Page 7, Line 13; Page 13,

748Lines 1 through 25; and Page 39, Line 6 through Page 40,

760Line 15. Intervenors’ objections, on the basis of relevance, to

770the admission of Page 44, Line 8 through Page 46, Line 10; Page

78351, Line 17 through Page 54, Line 1; and Deposition Exhibit 17,

795are sustained; these portions of Respondent’s Exhibit 8 are not

805admitted into evidence but have been received as a proffer.

815Finally, Page 20, Line 13 through Page 21, Line 22 of

826Mr. Boggio’s deposition, which Intervenors cross-designated, is

833received without objection.

836The parties submitted proposed recommended orders and post-

844hearing memorandums that have been carefully considered by the

853administrative law judge in the preparation of this Recommended



866The evidence presented at final hearing established the

874facts that follow.

877The Corporation and Its Duty

882to Allocate Federal Income Tax Credits

8881. The Corporation is a public corporation that

896administers governmental programs relating to the financing and

904refinancing of housing and related facilities in Florida. It is

914governed by a nine-member board composed of eight persons whom

924the governor appoints plus the Secretary of the Department of

934Community Affairs, sitting ex-officio.

9382. Among other things, the Corporation is the state's

947designated "housing credit agency" as defined in the Internal

956Revenue Code. As such, the Corporation has the responsibility

965and authority to establish procedures necessary for the

973allocation and distribution of low-income housing federal tax

981credits, which are created under and governed almost entirely by

991federal law.

9933. These tax credits, which are designed to encourage the

1003development of low-income housing for families, provide a

1011dollar-for-dollar reduction of the holder’s federal income tax

1019liability and can be taken each year, for up to ten years, that

1032the low-income housing project for which the credits were

1041awarded continues to satisfy Internal Revenue Code requirements.

1049Housing tax credits are allotted annually to the states on a per

1061capita basis and then awarded, through state-administered

1068programs, to developers of rental housing for low-income and

1077very low-income families. Once awarded, there is a market for

1087these tax credits; consequently, a developer may sell them at a

1098discount to obtain immediate cash for its project.

11064. As a populous st ate, Florida receives between

1115$18 million and $18.5 million in federal tax credits each year.

1126The Corporation allocates the state's share of tax credits to

1136eligible recipients pursuant to a Qualified Allocation Plan

1144("QAP") that federal law requires be prepared. The QAP, which

1156must be approved by the governor, is incorporated by reference

1166in Rule 67-48.025, Florida Administrative Code.

11725. In accordance with the QAP, the Corporation employs

1181various set-asides and special targeting goals that play a

1190substantial part in determining which applicants will receive

1198tax credits in a particular year. While targeting goals are

"1208aspirational" in nature, set-asides are relatively inflexible.

1215Thus, special targeting goals may be met if credits are

1225available. In contrast, credits that were reserved (or "set-

1234aside") for specific project types will be awarded to applicants

1245whose developments fall within the defined set-aside.

12526. The set-asides that have spawned the instant dispute

1261are the Geographic Set-Asides and the Non-Profit Set-Aside. The

1270Geographic Set-Asides require that a pre-determined portion of

1278the available tax credits be awarded to applicants in each of

1289the following county groups: Large County, Medium County, and

1298Small County. In 2000, the allocation percentages for these

1307groups were 64%, 26%, and 10%, respectively. The Non-Profit

1316Set-Aside, which is a function of federal law, requires that at

1327least 12% of the credits be awarded to non-profit applicants.

13377. None of the other set-asides is either at issue here or

1349affects the analysis or outcome. The same is true of the

1360special targeting goals. For simplicity's sake, therefore,

1367special targeting goals will be ignored in the discussion that

1377follows, and it will be assumed, unless otherwise stated, that

1387the Geographic and Non-Profit Set-Asides are the only factors

1396(besides merit) that affect the Corporation's award of tax


1406The Petitioners and Intervenors

1410(Collectively, "Petitioners")

14138. Lakesmart is a Florida limited partnership which has as

1423one of its general partners a non-profit corporation. In the

14332000 application cycle, Lakesmart applied to the Corporation for

1442an award of tax credits from the Medium County allocation.

1452Lakesmart is a "Non-Profit Applicant" for purposes of the Non-

1462Profit Set-Aside.

14649. RPK is a Florida limited partnership. In the 2000

1474application cycle, RPK applied to the Corporation for an award

1484of tax credits from the Large County allocation. For purposes

1494of the Non-Profit Set-Aside, RPK is a "for-profit Applicant."

150310. Meadow Glen and Coral Village are Florida limited

1512partnerships. Each has a non-profit corporation as one of its

1522general partners. Both applied to the Corporation in the 2000

1532application cycle for an award of tax credits from the Medium

1543County allocation. Each is considered a "Non-Profit Applicant"

1551for purposes of the Non-Profit Set-Aside.

1557Evaluation, Ranking, and the Tentative Funding Range

156411. To distribute the finite amount of tax credits

1573available each year, the Corporation has designed a competitive

1582process whereby potential recipients file applications that the

1590Corporation grades according to selection criteria set forth in

1599the QAP. Points are assigned based on compliance with these

1609criteria. At the end of the evaluation process, each applicant

1619that met the threshold requirements will have earned a final

1629score that determines its rank in terms of relative merit, with

1640higher-scored projects being "better" than lower-scored


164712. Because of the set-asides, however, credits are not

1656awarded simply on the basis of comparative scores. Instead, the

1666Geographic Set-Asides require that the applicants be sorted and

1675ranked, according to their scores, within the Large County,

1684Medium County, and Small County groups to which they belong and

1695from whose credit allocations the successful applicants will be

1704funded. As a result, therefore, if the several applicants with

1714the three highest scores in the entire applicant pool were all

1725in the Large County group and the applicant with the fourth

1736highest score were in the Small County group, for example, then

1747the latter applicant would be ranked first in the Small County

1758group. This means, to continue with the example, that if the

1769first- and second-ranked projects in the Large County group were

1779to exhaust the credits allocated to that group, then the

1789applicant with the third highest score overall would not be

1799funded, while the applicant with the fourth highest score in the

1810applicant pool (but ranked first in a county group) would be

1821funded. 16/

182313. After the Corporation has sorted the applicants by

1832county group and ranked them, within their respective groups,

1841from highest to lowest based on the applicants' final scores, it

1852draws a tentative funding line within each group. Applicants

1861above these lines are within the tentative funding range and

1871thus apparently successful. Conversely, an applicant below the

1879tentative funding line in its county group will not receive tax

1890credits unless, to satisfy a set-aside or fulfill a special

1900targeting goal, it is moved into the funding range.

190914. In the 2000 application cycle, a preliminary outcome

1918which had occurred only once before, in 1997, happened again:

1928the aggregate of credits requested by the non-profit applicants

1937within the tentative funding range did not amount to the Non-

1948Profit Set-Aside percentage — 12% in 2000 — of total available

1959credits. Therefore, the Corporation needed to elevate as many

1968apparently unsuccessful non-profit applicants into the funding

1975range — and concomitantly to remove as many apparently

1984successful for-profit applicants from the funding range to make

1993room for the favored non-profit applicant(s) — as necessary to

2003fulfill the 12% quota.

2007An Aside on Categorical Ranking

201215. The separation of applicants into three groups

2020according to the Geographic Set-Asides, and the effect that has

2030on determining which applicants will receive credits, was

2038mentioned above. To better understand the parties' dispute

2046regarding the procedure for satisfying the Non-Profit Set-Aside

2054when, as in 2000, it is necessary to award credits to a

2066putatively unsuccessful non-profit applicant at the expense of a

2075putatively successful for-profit applicant, a second, more

2082detailed look at the implications of categorical ranking will be


209316. Because of the Non-Profit Set-Aside, the set of all

2103qualified applicants ("Applicant Pool") is divided into two

2113classes: non-profit and for-profit corporations. As will be

2121seen, the class of non-profit corporations is further separated,

2130for purposes of the Non-Profit Set-Aside, into two subclasses:

2139domestic non-profits and out-of-state, or foreign, non-profits.

2146Finally, to repeat for emphasis, all qualified applicants,

2154regardless of class or subclass (if applicable), fall within one

2164of three groups according to the Geographic Set-Asides: Small

2173County, Medium County, and Large County.

217917. The following chart depicts the relevant

2186classification of applicants within the Applicant Pool:

2193Applicant Pool

2195Non-profits For-profits

2197Domestic Foreign

2199Small County Medium County Large County

2205Because, as the chart shows, each applicant fits into several

2215categories, applicants may be ranked in order of their

2224comparative scores in a variety of combinations, depending on

2233how they are sorted, e.g. all applicants, all Large County for-

2244profits, all foreign non-profits, etc.

224918. Once the Corporation has drawn the tentative funding

2258lines (which, recall, are county group-specific) and determined

2266preliminarily which applicants will receive funding and which

2274will not, two additional categories exist: applicants within

2282the funding range and applicants below (or outside) the funding

2292range. Owing to the nature of the instant dispute, however, the

2303only non-profits discussed below are those outside the tentative

2312funding range, unless otherwise stated, and the only for-profits

2321considered are those within the tentative funding range, unless

2330otherwise stated. 1/

233319. The above makes clear, it is hoped, that a reference

2344to the "highest scored" applicant, without more, may describe

2353many applicants, such as the highest scored domestic non-profit,

2362the highest scored non-profit in the Small County group, the

2372highest scored foreign non-profit in the Large County group, and

2382so on. More information is needed to pinpoint a particular


239320. For ease of reference, and to facilitate the

2402discussion and disposition of the present dispute, the following

2411abbreviations will be used in this Recommended Order as

2420shorthand descriptions of applicants’ defining characteristics:

2426Abbreviation Meaning

2428NP Non-profit applicant

2431FP For-profit applicant

2434High- highest scored

2437Low- lowest s cored

2441D domestic entity ( i.e. organized

2447under Florida law)

2450F foreign entity ( i.e. organized

2456under the law of a state other

2463than Florida)

2465S, M, and L Small, Medium and Large County,


2475! highest or lowest scored within

2481the indicated category; e.g. High-

2486NP(S!) means highest scored non-

2491profit within the Small County

2496group; Low-FP(S!) means lowest

2500scored for-profit in the Small

2505county group

2507x, y variables

2510Combining these abbreviations provides an increasingly precise

2517description, as more information is added. For example:

2525Combination Description

2527High-NP Highest scored non-profit in some,

2533unknown category

2535High-NP[D!] Highest scored domestic non-

2540profit, unknown group; is not

2545necessarily the highest scored

2549non-profit in the class of non-


2556High-NP[F!] Highest scored foreign non-profit,

2561unknown group; is not necessarily

2566the highest scored non-profit in

2571the class of non-profits

2575High-NP[D!](S) Highest scored domestic non-

2580profit, located in the Small

2585County group; not the highest

2590scored non-profit within the Small

2595County group

2597High-NP[D](S!) Highest scored non-profit in the

2603Small County group; is a domestic

2609corporation but is neither the

2614highest scored non-profit nor

2618highest scored domestic non-profit

2622High-NP[D](S) Highest scored domestic n on-profit

2628in the Small County group; is

2634neither the highest scored non-

2639profit, the highest scored

2643domestic non-profit, nor the

2647highest scored non-profit in the

2652Small County group

2655Low-FP! Lowest scored for-profit in

2660the class of for-profits

2664Low-FP(M!) Lowest scored for-profit in

2669Medium County group; is not

2674necessarily the lowest scored for-

2679profit in the class of for-profits

2685The Controversy: Gored Oxen and Leapt-Over Frogs

269221. The solution to the problem that arose in the 2000

2703application cycle when an insufficient number of non-profit

2711applicants wound up initially within the tentative funding range

2720is found in two places: Rule 67-48.032, Florida Administrative

2729Code, and the 2000 QAP. Although the language of the two is not

2742identical, the parties agree that the rule and the pertinent QAP

2753provisions have the same meaning, despite their differences in

2762wording. The undersigned has concluded, however, that the

2770differences, though subtle, substantially affect the outcome of

2778this case. It is necessary, therefore, to read them carefully.

278822. Rule 67-48.032(2), Florida Administrative Code,

2794provides in pertinent part:

2798To ensure that the minimum 10% is set aside,

2807the Corporation has determined that an

2813initial allocation of 12% to qualified Non-

2820Profits will be met. In order to achieve

2828the initial 12% set aside, Applications from

2835Applicants that qualify or whose General

2841Partner qualifies as a Non-Profit entity

2847pursuant to Rule 67.48.002(71), F.A.C., HUD

2853Regulations, Section 42(h)(5)(c), subsection

2857501(c)(3) or 501(c)(4) of the Code and

2864organized under Chapter 617, Florida

2869Statutes, or organized under similar state

2875law if organized in a jurisdiction other

2882than Florida and meet scoring threshold

2888requirements shall be moved into the funding

2895range, in order of their comparative scores,

2902with Applicants whose Non-Profit entity is

2908organized under Florida law receiving

2913priority over Non-Profit entities of other

2919jurisdictions, until the set-aside is

2924achieved. The last Non-Profit Development

2929that is moved into the funding range in

2937order to achieve the 12% initial set-aside

2944shall be fully funded even though that may

2952result in a higher Non-Profit set-aside.

2958This will be accomplished by removing the

2965lowest scored Application of a for-profit

2971Applicant from the funding range and

2977replacing it with the highest scored Non-

2984Profit Application below the funding range

2990within the applicable Geographic Set-Aside

2995pursuant to the QAP. This procedure will be

3003used again on or after October 1, if

3011necessary, to ensure that the Agency

3017allocates at least 10% of its Allocation

3024Authority to qualified Non-Profit

3028Applicants. Any for-profit Applicant so

3033removed from the funding range will NOT be

3041entitled to any consideration or priority

3047for the receipt of current or future Housing

3055Credits other than placement on the current

3062ranking and scoring list in accordance with

3069its score. Binding Commitments for Housing

3075Credits from a future year will not be

3083issued for Applicants so displaced.

308823. Paragraph 2, at page 2, of the Corporation’s 2000 QAP


3100[The Corporation] has determined that an

3106initial allocation of 12% to qualified Non-

3113Profits will ensure that the 10% requirement

3120will be met in the event that all

3128Developments included in the initial 12% do

3135not receive an allocation. In order to

3142achieve the initial 12% set-aside a

3148tentative funding line will be drawn. Then,

3155Applications from Non-Profit Applicants that

3160meet scoring threshold requirements shall be

3166moved into the tentative funding range, in

3173order of their scores with Applicants whose

3180Non-Profit entities are organized under

3185Chapter 617, Florida Statutes, having

3190priority, until the 12% set-aside is

3196achieved. This will be accomplished by

3202moving the lowest scored Application of a

3209for-profit Applicant in the funding range

3215down in ranking so it is ranked below the

3224lowest Non-Profit Applicant within the

3229funding range and moving the highest scored

3236Non-Profit Applicant organized under Chapter

3241617, Florida Statutes below the funding

3247range within the applicable Geographic Set-

3253Aside pursuant to the QAP up in ranking so

3262it is ranked one ranking space above the

3270for-profit Applicant that was moved down in

3277ranking. If no such Applicant exists, the

3284highest Non-Profit Applicant organized under

3289similar statutes from another state which is

3296below the funding range within the

3302applicable Geographic Set-Aside pursuant to

3307the QAP, will be moved into funding range in

3316the same manner as stated in the previous

3324sentence. This procedure will be used again

3331on or after October 1, 2000, if necessary,

3339to ensure that the [Corporation] allocates

3345at least 10% of its Allocation Authority for

33532000 to qualified Non-Profit Applicants.

3358Any for-profit Applicant so removed from the

3365funding range will NOT be entitled to any

3373consideration or priority for the receipt of

3380current or future housing credits other than

3387placement on the current ranking and scoring

3394list in accordance with its score. Binding

3401Commitments for housing credits from a

3407future year will not be issued for

3414Applicants so displaced. The last Non-

3420Profit Applicant moved into the funding

3426range, in order to meet the initial 12% set-

3435aside or in order to meet the minimum 10%

3444set-aside after October 1, 2000, will be

3451fully funded contingent upon successful

3456credit underwriting even though that may

3462result in a higher Non-Profit set-aside.

3468After the full Non-Profit set-aside amount

3474has been allocated, remaining Applications

3479from Non-Profit organizations shall compete

3484with all other Applications in the HC

3491Program for remaining Allocation Authority.

349624. The Corpora tion's interpretation of Rule 67-48.032,

3504Florida Administrative Code, and paragraph 2 of the 2000 QAP

3514(collectively, the "Instructions") to determine the procedure

3522for satisfying the Non-Profit Set-Aside in connection with the

35312000 application cycle has caused considerable controversy — and

3540led to this proceeding. The controversial interpretation was

3548publicly manifested on September 15, 2000, when the Corporation

3557published a preliminary ranking sheet on its web site which

3567reflected adjustments that its staff had made to fulfill the

3577Non-Profit Set-Aside. Within days, adversely affected

3583applicants were complaining that the Corporation's staff had

3591misinterpreted the Instructions.

359425. The Corporation's staff had construed the Instructions

3602to mean that when it is necessary to displace a for-profit

3613within the tentative funding range to satisfy the Non-Profit

3622Set-Aside, the following procedure must be followed:

3629Remove Low-FP!(x!) and replace it with High-

3636NP[D](x). 2/ If there is no domestic non-

3644profit in county group x, then replace Low-

3652FP!(x!) with High-NP[F](x!). 3/

3656This construction permits High-NP[D!], if there is one, High-

3665NP![F!] if not, to remain outside the funding range, because it

3676might not be in county group x.

368326. In practice, the process that the Corporation’s staff

3692had settled upon operated, in the circumstances presented, to

3701the detriment of Petitioners. Here is how it worked. After the

3712tentative funding range was established, the lowest scored for-

3721profit in the class of for-profits was in the Small County

3732group. 4/ There were no non-profits, domestic or foreign, in

3742that group to elevate, however, and so Low-FP!(S!) could not be

3753removed; the fall-back procedure was followed. See endnote 4.

376227. As it happened, RPK was Low-FP(L!) and had a lower

3773score than Low-FP(M!). Thus, under the Corporation's staff's

3781interpretation of the Instructions, as revealed by the rankings

3790posted on September 15, 2000, High-NP[D](L!) was moved into the

3800funding range in the place of RPK, even though High-NP[D](L!)'s

3810final score was lower than that of Lakesmart — which was High-

3822NP![D!](M!). (Coral Village and Meadow Glen were the second-

3831and third-ranked domestic non-profits, respectively, in the

3838Medium County Group. Sorted by class, Lakesmart, Coral Village,

3847and Meadow Glen would be ranked first, second, and sixth in the

3859class of non-profit applicants.) 5/

386428. The second lowest-scored for-profit in the class of

3873for-profits was also in the Large County group. Thus, it became

3884Low-FP!(L!) after RPK was removed. It, too, was replaced by the

3895Large County non-profits that became, in turn, High-NP[D](L!) as

3904the next highest-ranked non-profit in that group was moved up

3914into the funding range to satisfy the 12% Non-Profit Set-Aside.

3924In all, the Corporation's staff proposed to elevate — and hence

3935award tax credits to — four non-profit applicants whose final

3945scores were lower than Lakesmart's and Coral Village's. One of

3955those four putative beneficiaries had a lower final score than

3965Meadow Glen's.

396729. Lakesmart and others who disagreed with the

3975Corporation’s staff advanced an alternative interpretation of

3982the Instructions. In their view, to ensure that the Non-Profit

3992Set-Aside is met requires the following maneuver:

3999Remove Low-FP(x!) and replace it with High-

4006NP[D!](x). 6/ If there is no domestic non-

4014profit outside the funding range, then

4020replace Low-FP(x!) with High-NP![F!](x!).


4025This interpretation admits the possibility that Low-FP! might

4033remain in the funding range, because it might not be in county

4045group x.

404730. Under this interpretation, favored by all Petitioners,

4055Lakesmart and Coral Village would be elevated into the funding

4065range, rather than being "leap-frogged" by lower-scored non-

4073profits, and RPK would not be displaced. (Of course,

4082Petitioners' interpretation would require that some other for-

4090profit ox be gored — one having a higher score than RPK's.)

410231. These competing interpretations of the Instructions

4109were presented to the Corporation's board for consideration at

4118its public meeting on September 22, 2000. After a discussion of

4129the issues, in which members of the public participated, the

4139board voted unanimously to accept the interpretation that the

4148staff had acted upon in preparing the September 15, 2000,

4158rankings. Later in the same meeting the board adopted final

4168rankings, which were prepared in accordance with the approved

4177interpretation, that resulted in the denial of Petitioners'

4185applications for tax credits.

4189The 1997 Awards: Precedent or Peculiarity?

419532. Petitioners maintain that their interpretation of the

4203Instructions is supported by a supposed precedent allegedly set

4212in 1997 that, they say, was binding on the Corporation in 2000.

422433. In the 1997 cycle, it so happened that after drawing

4235the tentative funding lines, the sum total of credits sought by

4246non-profits within the preliminary funding range failed to reach

4255the then-required threshold of 10%. Thus, for the first time,

4265the Corporation faced the need to replace higher-scored for-

4274profits (that were apparently in line for funding) with lower-

4284scored non-profits that otherwise would not have received


429334. The QAP that governed the 1997 awards provided for the

4304Non-Profit Set-Aside but was silent on the procedure for

4313satisfying it:

4315The Agency will allocate not less than 10%

4323of the state’s allocation authority to

4329projects involving qualified, non-profit

4333Applicants, provided they are non-profits

4338organized under Chapter 617, Florida

4343Statutes, and as set forth in Section

435042(h)(5) of the Internal Revenue Code, as

4357amended, and Rule Chapter 9I-48, Florida

4363Administrative Code.

4365Respondent's Exhibit 2, page 8.

437035. Rule 9I-48.024(3), Florida Administrative Code (1997),

4377did contain directions for carrying out the required

4385substitution. It prescribed the following procedure for

4392elevating non-profits:

4394If 10% of the total Allocation Authority is

4402not utilized by Projects with Non-Profit

4408Applicants, Applications from Non-Profit

4412Applicants that meet scoring threshold

4417requirements shall be moved into the funding

4424range, in order of their comparative scores,

4431until the 10% set-aside is achieved. This

4438will be accomplished by removing the lowest

4445scored Application of a for-profit Applicant

4451from the funding range and replacing it with

4459the highest scored Non-Profit Application

4464below the funding range within the

4470applicable Geographic Set-Aside pursuant to

4475section (2) above.

4478Petitioners' Exhibit 1. These provisions will be referred to

4487hereafter as the "1997 Directions," to distinguish them from the


449836. Gwen Lightfoot was the Corporation's Deputy

4505Development Officer in 1997. In that capacity, she was directly

4515responsible for implementing the rules relating to the award of

4525low-income housing tax credits. To satisfy the Non-Profit Set-

4534Aside, Ms. Lightfoot followed the 1997 Directions as she

4543understood them. In so doing, she sorted the eligible non-

4553profits by class ( i.e. without regard to their respective county

4564groups) and ranked them in score order, from the highest scoring

4575project to the lowest scoring project. 8/ Then, Ms. Lightfoot

4585moved the highest scoring non-profit in the class of non-profits

4595to a position immediately above the for-profit with the lowest

4605score in the same geographic set-aside as the favored non-profit

4615so that the non-profit project would be fully funded. That is,

4626she replaced Low-FP(x!) with High-NP!(x!). This process was

4634repeated, moving the next highest ranked non-profit to a

4643position immediately above the lowest-ranked for-profit in the

4651same geographic set-aside as the elevated non-profit, until the

4660Non-Profit Set-Aside was met.

466437. Although the Corporation presently argues that its

4672board was not fully informed in 1997 as to the procedure that

4684Ms. Lightfoot followed in fulfilling the mandate of the Non-

4694Profit Set-Aside, a preponderance of evidence established that

4702Ms. Lightfoot's actions were within the scope of her authority

4712and taken in furtherance of her official duties; that the board

4723was aware of what she had done; and that the board took no

4736action to change the results that followed from Ms. Lig htfoot's

4747interpretation and implementation of the 1997 Directions. Ms.

4755Lightfoot's application of the 1997 Directions, in short, was

4764not the unauthorized act of a rogue employee. Rather, as a

4775matter of fact, her action was the Corporation's action,

4784irrespective of what any individual board member might

4792subjectively have understood at the time.

479838. In the years following the 1997 awards, Rule 9I-

480848.032, Florida Administrative Code, was re-numbered Rule 67-

481648.032 and amended three times, the most recent amendment

4825becoming effective on February 24, 2000. As a result, the 1997

4836Directions evolved into the language of Rule 67-48.032(2) which,

4845though not identical, retains the essential meaning of its


485539. During the same period, the QAP was also amended three

4866times, the version controlling the 2000 application cycle having

4875been approved by the governor on December 16, 1999, and adopted

4886by reference in the Florida Administrative Code on February 24,

48962000. Unlike the revisions to Rule 9I-48.032(3), however, the

4905changes in the QAP that relate to the issue at hand are

4917significant, because the 2000 QAP sets forth a procedure for

4927fulfilling the Non-Profit Set-Aside when the collective amount

4935of credits sought by non-profits in the tentative funding range

4945falls short of the mandated mark, whereas the 1997 QAP did not.


496040. The Division of Administrative Hearings has personal

4968and subject matter jurisdiction in this proceeding pursuant to

4977Sections 120.569 and 120.57(1), Florida Statutes.

498341. The parties stipulated to the standing of Petitioners

4992(including Intervenors) to maintain this proceeding, and the

5000evidence established that the substantial interests of each of

5009them were affected by the agency action at issue.

501842. Petitioners have the burden of going forward with the

5028evidence as well as the ultimate burden of establishing the

5038basis for their claim, The Environmental Trust v. Department of

5048Environmental Protection , 714 So. 2d 493, 497 (Fla. 1st DCA

50581998), and therefore must demonstrate the impropriety of the

5067Corporation's interpretation of the Instructions.

507243. Florida courts generally defer to an agency’s

5080interpretation of its own rules and the statutes that it

5090administers. See D.A.B. Constructors, Inc. v. State of

5098Transportation , 656 So. 2d 940, 944 (Fla. 1st DCA 1995); Humana

5109Inc. v. Department of Health and Rehabilitative Services , 492

5118So. 2d 388, 392 (Fla. 4th DCA 1986)(agency’s interpretation of

5128its own rule is entitled to great weight and persuasive force).

5139This deference is given to the interpretations of, and meanings

5149assigned to, such rules and statutes by the officials charged

5159with their administration. Pan American World Airways, Inc. v.

5168Florida Public Service Commission , 427 So. 2d 716, 719 (Fla.


517944. From the general principle of deference follows the

5188more specific rule that a n agency’s interpretation need not be

5199the sole possible interpretation or even the most desirable one;

5209it need only be within the range of permissible interpretations.

5219State Board of Optometry v. Florida Society of Ophthalmology ,

5228538 So. 2d 878, 885 (Fla. 1st DCA 1988); see also Suddath Van

5241Lines, Inc. v. Department of Environmental Protection , 668

5249So. 2d 209, 212 (Fla. 1st DCA 1996). However, "[t]he deference

5260granted an agency’s interpretation is not absolute." Department

5268of Natural Resources v. Wingfield Development Co. , 581 So. 2d

5278193, 197 (Fla. 1st DCA 1991). Obviously, an agency cannot

5288implement any conceivable construction of a statute or rule no

5298matter how strained, stilted, or fanciful it might be. Id.

5308Rather, "only a permissible construction” will be upheld by the

5318courts. Florida Society of Ophthalmology , 538 So. 2d at 885.

532845. Accordingly, “[w]hen the agency's construction clearly

5335contradicts the unambiguous language of the rule, the

5343construction is clearly erroneous and cannot stand.” Woodley v.

5352Department of Health and Rehabilitative Services , 505 So. 2d

5361676, 678 (Fla. 1st DCA 1987); see also Legal Environmental

5371Assistance Foundation v. Board of County Commissioners of

5379Brevard County , 642 So. 2d 1081, 1083-84 (Fla.

53871994)(“unreasonable interpretation” will not be sustained).

539346. In determining which side has advanced the proper

5402interpretation, it is helpful to reduce the language of the

5412rules (both Rule 9I-48.032(3), Florida Administrative Code

5419(1997), and Rule 67-48.032(2), Florida Administrative Code

5426(2000)) and the QAP to the bare essentials. By removing terms

5437that are not in dispute and abbreviating others, the structure

5447of the pertinent provisions becomes much clearer. Thus:

5455Rule 9I-48.032(3)

5457[NPs] shall be moved into the funding range,

5465in order of their comparative scores, . . .

5474by removing the [Low-FP] and replacing it

5481with the [High-NP] within the applicable

5487Geographic Set-Aside[.]

5489* * *

5492Rule 67-48.032(2)

5494[NPs] shall be moved into the funding range,

5502in order of their comparative scores, with

5509[NP[D]s] receiving priority over [NP[F]s]

5514. . . by removing the [Low-FP] and replacing

5523it with the [High-NP] within the applicable

5530Geographic Set-Aside[.]

5532The earlier rule differs from the later version in that it does

5544not require domestic non-profits to be favored over foreign non-

5554profits. The QAP in effect in 1997, however, directed that only

5565domestic non-profits would count towards the Non-Profit Set-

5573Aside, so an instruction to give Florida non-profits priority

5582would not have made sense in 1997. At bottom, as far as the

5595present dispute is concerned, these two rules are identical in

5605meaning. The following discussion examines Rule 67-48.032(2),

5612Florida Administrative Code (2000) (the “Rule”), in detail, but

5621the analysis would not be materially different if the earlier

5631rule were its subject.

563547. The QAP in 1997 did not dictate a procedure for

5646elevating non-profits when necessary. But the 2000 version

5654applicable to Petitioners' applications did. Boiled down to its

5663operative terms, the 2000 QAP provides:

5669[NPs] shall be moved into the tentative

5676funding range, in order of their scores with

5684[NP[D]s] having priority . . . by moving the

5693[Low-FP] down in ranking . . . and moving

5702the [High-NP[D]] within the applicable

5707Geographic Set-Aside . . . up in ranking[.]

5715If no such Applicant exists, the [High-

5722NP[F]] within the applicable Geographic Set-

5728Aside . . . will be moved into funding range

5738in the same manner as stated in the previous


5748Interpreting the Rule

575148. Two questions naturally arise upon reading the Rule.

5760One is whether the for-profit to be removed is Low-FP! (which

5771would necessarily be the lowest scored for-profit in its county

5781group: Low-FP!(x!)) or, instead, one of the applicants fitting

5790the description Low-FP(x!) (which would not necessarily be Low-

5799FP!). The other is whether the non-profit to be moved into the

5811funding range is the sole High-NP[D!](x) or, rather, one of the

5822applicants fitting the description High-NP[D](x). The answers

5829must be found in the phrase “within the applicable Geographic

5839Set-Aside,” for that is the only language that establishes a

5850parameter. The problem is, the phrase can be understood

5859reasonably in two ways, as explained below. Consequently, the

5868Rule, standing alone, is ambiguous.

5873The "Anti-For-Profit" Construction

587649. The crucial language may fairly be read as an

5886adjective clause, further modifying High-NP. Under this

5893interpretation, which probably comes more naturally to most

5901readers (and makes the sentence more grammatical) given the

5910proximity of the clause to its apparent object, the phrase

5920“within the applicable Geographic Set-Aside” describes the

5927county group from which High-NP must be drawn; namely, the

5937“applicable” one, whose identity can be deduced as follows. 9/

594750. Observe first that the non-profit to be elevated is

5957not necessarily High-NP!, but rather High-NP(x!) — the highest

5966scored non-profit in a particular ( i.e. the applicable) county

5976group. However, because the Rule also requires that domestic

5985non-profits be given priority, and because the highest scored

5994domestic non-profit in the applicable group would not

6002necessarily be the highest scored domestic non-profit in the

6011subclass of domestic non-profits, or even the highest scored

6020non-profit in the applicable group, it next becomes clear that

6030the non-profit to be elevated must fit the description High-

6040NP[D](x). But three domestic non-profits might fit that

6048description, 10/ which means that the applicable group simply

6057cannot be ascertained with reference to the non-profits. 11/

6066Apparently, therefore, the “applicable” group is intended to

6074match the one from which the lowest scored for-profit, however

6084defined, is removed.

608751. Turning to the for-profits, we see that as many as

6098three for-profits may fall within the definition Low-FP(x!), but

6107that only one Low-FP!(x!) can exist at a time. Thus, the Rule

6119logically directs that Low-FP!(x!) be removed, or else it would

6129offer no meaningful direction regarding how to proceed. Once

6138the decision is made that the Rule requires the removal and

6149replacement of Low-FP!(x!), it becomes evident at last that the

6159applicable county group from which to select High-NP[D](x) is

6168the county group matching the one in which Low-FP!(x!) is

6178situated. In other words, if the lowest scored for-profit in

6188the class of for-profits is situated in the Medium County group,

6199then Low-FP!(M!) will be removed and replaced with High-


620952. Because this interpretation effectively places greater

6216emphasis on removing the for-profit with the lowest possible

6225score as opposed to elevating the non-profit with the highest

6235possible score, its approach (relatively speaking) is "anti"

6243for-profit rather than "pro" non-profit. This is the

6251Corporation’s interpretation.

6253The "Pro-Non-Profit" Construction

625653. Alternatively, the phrase “within the applicable

6263Geographic Set-Aside” may be read an as adverbial clause,

6272modifying the verb “replacing.” Assuming this were the intended

6281meaning, the Rule's drafters, to avoid confusion, might have put

6291the phrase immediately after the verb to be modified, so that

6302the sentence would have been structured like this: NPs shall be

6313moved into the funding range, in order of their comparative

6323scores, by removing the Low-FP and replacing it, within the

6333applicable Geographic Set-Aside, with the High-NP. Although the

6341actual language is perhaps a bit less grammatical, it is

6351nevertheless not unreasonable to construe the crucial phrase as

6360an instruction concerning where the replacing is to occur, i.e.

6370in the applicable group. As with the competing construction

6379discussed above, the applicable group can be deduced, as


638954. Initially it can be observed that because the

6398replacing occurs in the funding range and adversely selects a

6408for-profit, under this interpretation the applicable group must

6416be the one in which the for-profit to be removed resides. Thus,

6428the for-profit to be displaced must be the lowest scored for

6439profit in the applicable group, or Low-FP(x!), which would not

6449necessarily be the lowest scored for-profit in the class of for-

6460profits. Indeed, as many as three for-profits might fit the

6470description Low-FP(x!). Therefore, the applicable group cannot

6477be determined with reference to the for-profits but instead is

6487apparently intended to match the one in which the highest scored

6498non-profit to be elevated, however defined, is situated.

650655. The Rule requires that the "highest scored" non-profit

6515be elevated — a general description that without more might

6525mean, depending on the context, the highest scored non-profit in

6535a particular county group (in which case there might be three

6546non-profits fitting the description), or the single highest

6554scored non-profit in the class of non-profits, among other

6563possibilities. But the Rule also requires that domestic non-

6572profits be given priority, and it does not make the choice

6583group-specific. For those reasons, there is only one eligible

6592beneficiary at a time: the highest scored domestic non-profit,

6601or High-NP[D!](x). Therefore, the Rule logically directs that

6609High-NP[D!](x) be moved into the funding range, or else it would

6620offer no meaningful guidance. Accordingly, the applicable

6627county group in which to replace Low-FP(x!) must be the county

6638group matching the one in which High-NP[D!](x) is located. In

6648other words, if the highest scored domestic non-profit in the

6658subclass of domestic non-profits is situated in the Small County

6668group, then Low-FP(S!) will be removed and replaced with High-


667956. Because this interpretation effectively places greater

6686emphasis on elevating the non-profit with the highest possible

6695score as opposed to removing the for-profit with the lowest

6705possible score, its approach (relatively speaking) is "pro" non-

6714profit rather than "anti" for-profit. This is Petitioners'


6723Interpreting the QAP

672657. The QAP is similar but not identical to the Rule. The

6738differences in terminology are subtle — but the subtle

6747differences materially affect the interpretation.

675258. The most s triking distinction between the QAP and the

6763Rule is that the QAP substitutes a "moving down — moving up"

6775formula in place of the Rule's "removing — replacing" formula.

6785The action being described is clearly the same. But the QAP's

6796terminology leads to an important difference in the sentence

6805structure. The verb ("moving") is separated from the adverbs

6816("up" and "down") by the object to be acted upon: moving-

6829object-up, moving-object-down. This creates two "sandwiches",

6835the insides of which are: (1) the Low-FP, which shall be moved

6847down; and (2) the High-NP[D] within the applicable Geographic

6856Set-Aside, which shall be moved up.

686259. As with the Rule, the parameter for determining which

6872for-profit to move down and which non-profit to move up is

6883ultimately the phrase "within the applicable Geographic Set-

6891Aside." But unlike the Rule, the crucial phrase in the QAP can

6903only be read, reasonably, as an adjective clause, further

6912modifying High-NP[D] (or the term “funding range,” see endnote

692210). The QAP rendered untenable the construction of "within the

6932applicable Geographic Set-Aside" as an adverbial clause by tying

6941the determinative phrase together with High-NP[D] in the middle

6950of the "moving-object-up" sandwich. To interpret the phrase as

6959an instruction regarding where to do the moving would be

6969contrived and unnatural, divorcing the language from its common

6978meaning; ordinary people attempting to communicate that thought

6986would not have written the sentence as it stands in the QAP.

699812/ Rather, as placed, the phrase "within the applicable

7007Geographic Set-Aside" is plainly part of the description of the

7017object to be moved; it informs the reader from which group the

7029non-profit to be elevated must be drawn. Cf. Wright & Seaton,

7040Inc. v. Prescott , 420 So. 2d 623, 629 (Fla. 4th DCA 1982)

7052("[G]rammatical construction of contracts generally requires

7059that a relative or qualifying phrase be construed as referring

7069to its nearest antecedent.").

707460. This plain-language understanding of the QAP is

7082underscored and confirmed by the next sentence, which says: "If

7092no such Applicant exists" — meaning, plainly, that if there is

7103no domestic non-profit within the applicable county group to

7112move up in ranking — then the High-NP[F] "within the applicable

7123Geographic Set-Aside . . . will be moved into the funding range

7135as stated in the previous sentence." Even if it were possible

7146(and it is not) reasonably to construe the words "such

7156applicant" to mean, simply, "domestic non-profit," rather than

7164High-NP[D](x), there is no way to read the phrase "within the

7175applicable Geographic Set-Aside," when it appears for the second

7184time in back-to-back sentences, as anything but an adjective

7193clause further modifying High-NP[F]; it is not susceptible to

7202interpretation as an adverbial clause. 13/

720861. Once accepted that the phrase "within the applicable

7217Geographic Set-Aside" is an adjective clause further describing

7225the object to be acted upon, it becomes clear that the non-

7237profit to be moved up must be the highest scored domestic non-

7249profit in the applicable group; that is, it must fit the

7260description High-NP[D](x). From that point, the analysis is

7268identical to that which informs the "anti-for-profit"

7275construction discussed above in connection with the

7282interpretation of the Rule. The end result, as we have seen

7293already, is that the applicable county group "x" from which to

7304select High-NP[D](x) is the county group matching the one in

7314which Low-FP!(x!) is situated. Under the QAP, the identity of

7324the non-profit beneficiary is determined with reference to the

7333for-profit victim, not the other way around. The mindset of the

7344QAP, in other words, is "anti" for-profit, as opposed to "pro"


7356Conflating the Rule and QAP

736162. The Rule and paragraph 2, at page 2, of the QAP, which

7374comprise the Instructions, are plainly in pari materia ; that is,

7384they pertain to the same subject and have a common goal.

7395Accordingly, to the extent reasonably possible, the Rule and the

7405QAP must be construed together as a cohesive, internally

7414consistent whole. See , e.g. , Mehl v. State , 632 So. 2d 593, 595

7426(Fla. 1993); Lincoln v. Florida Parole Commission , 643 So. 2d

7436668, 671 (Fla. 1st DCA 1994).

744263. The two components of the Instructions, as should be

7452evident, are not in conflict. Although the Rule is ambiguous,

7462in that it reasonably may be interpreted in more than one way,

7474one of the two permissible constructions thereof that the

7483parties have advanced matches precisely the unambiguous meaning

7491of the QAP. Under a unified construction, therefore, the QAP

7501resolves the Rule’s ambiguity in favor of their common ground.

7511Taken together, the Instructions plainly provide that, when

7519elevating a non-profit into the funding range to satisfy the

7529Non-Profit Set-Aside, the fortunate non-profit must be selected

7537from the county group corresponding with that of the unfortunate

7547for-profit with the lowest score in the class of for-profits,

7557which will be displaced. The Corporation correctly interpreted

7565the Instructions in the 2000 application cycle.

757264. The Corporation’s interpretation of the 1997

7579Directions, with which Petitioners’ present position is in

7587enthusiastic accord, does not demand a different resultue,

7595in satisfying the Non-Profit Set-Aside in 1997, the Corporation

7604followed a permissible interpretation of the ambiguous Rule 9I-

761348.032(3), Florida Administrative Code (1997). 14/ And from

7621that premise, a plausible argument can be made that the

7631Corporation’s interpretation and application of the 1997

7638Directions revealed the intent behind Rule 9I-48.032(3), and

7646therefore that proof of the methodology used in 1997 should be

7657received and considered as extrinsic evidence of the intended

7666meaning of Rule 67-48.032(2). Cf. Mayflower Corp. v. Davis , 655

7676So. 2d 1134, 1137 (Fla. 1st DCA 1994), rev. dismissed , 652 So.

76882d 817 (1995)(interpretation parties give to contract may be

7697best indication of their intentions); Vienneau v. Metropolitan

7705Life Ins. Co. , 548 So. 2d 856, 859 (Fla. 4th DCA 1989)(where

7717terms of contract are doubtful, court may consider

7725interpretation placed on contract by the parties, provided such

7734interpretation is not completely at variance with legal

7742principles of contract interpretation).

774665. But even if it were assumed for argument’s sake that

7757an agency’s one-time interpretation of an ambiguous rule on the

7767first occasion calling for its application establishes a meaning

7776from which the agency cannot thereafter depart except by validly

7786adopting a subsequent rule change, 15/ see Cleveland Clinic

7795Florida Hospital v. Agency for Health Care Administration , 679

7804So. 2d 1237, 1242 (Fla. 1st DCA 1996), rev. denied , 695 So. 2d

7817701 (1997), the Corporation did in fact validly adopt a

7827subsequent rule when it promulgated paragraph 2, at page 2, of

7838the QAP after the 1997 awards and before the 2000 application

7849cycle. In other words, the Corporation did that which the

7859Cleveland Clinic case instructs an agency to do when it changes

7870its mind about an earlier established policy, practice, or

7879procedure. Consequently, the Corporation’s interpretation of

7885the 1997 Directions, reasonable though it was at the time, lost

7896whatever precedential value it might have had upon the adoption

7906of the unambiguous language contained in paragraph 2 of the 2000


791866. In sum, even if it were decided that the 1997 awards

7930had fixed the meaning Rule 9I-48.032(3) — and hence Rule 67-

794148.032(2), Florida Administrative Code — the more recently

7949adopted language of the QAP unambiguously expresses the

7957Corporation’s intent and thus must prevail as against a prior

7967inconsistent interpretation. See McKendry v. State , 641 So. 2d

797645, 46 (Fla. 1994)(when two statutes are in conflict, later

7986promulgated statute should prevail as last expression of

7994legislative intent).


799767. Both sides' interpretations can produce a result that

8006seems unfair, unjust, or unreasonable. But set-asides, by their

8015nature, are not fair to the applicant that is displaced in favor

8027of another which is preferred in the service of a perceived

8038greater public good. Ultimately, therefore, whether it is more

8047desirable to discriminate against the lowest scored for-profit

8055in the class of for-profits, as the Corporation has decided, or

8066to give preferential treatment to the highest scored (domestic

8075if possible, foreign if necessary) non-profit, as Petitioners

8083would have liked, is simply a policy decision. The

8092Instructions, construed together as a whole, clearly convey the

8101Corporation’s policy choice, the wisdom of which is not at issue

8112here. The Corporation properly followed its Instructions in the

81212000 Application cycle.


8125Based on the foregoing Findings of Fact and Conclusions of

8135Law, it is RECOMMENDED that the Corporation enter a final order

8146dismissing the petitions of Petitioner Lakesmart, Petitioner

8153RPK, and Intervenors Meadow Glen and Coral Village.

8161DONE AND ENTERED this 7th day of February, 2001, in

8171Tallahassee, Leon County, Florida.



8180Administrative Law Judge

8183Division of Administrative Hearings

8187The DeSoto Building

81901230 Apalachee Parkway

8193Tallahassee, Florida 32399-3060

8196(850) 488-9675 SUNCOM 278-9675

8200Fax Filing (850) 921-6847


8205Filed with the Clerk of the

8211Division of Administrative Hearings

8215this 7th day of February, 2001.


82221. To make the point without the distraction of unnecessary

8232details, the example in the text ignores the potential effects

8242of other set-asides and the special targeting goals.

82502. Ignoring non-profits within the funding range and for-

8259profits below the tentative funding lines is appropriate because

8268none of them is affected by the disputed procedure for moving

8279non-profits into the funding range to satisfy the Non-Profit

8288Set-Aside. Under both of the competing methods for doing that,

8298the former are never displaced and the latter are never


83093. There is only one lowest scored for-profit in the class of

8321for-profits. In contrast, there may be as many as three

8331domestic non-profits that can be described as the highest scored

8341domestic non-profit in a particular county group, i.e. that fit

8351the description High-NP[D](x). Because High-NP[D](x) must be

8358drawn from the same county group as Low-FP!(x!) — no matter what

8370x is, x must equal x — the county group placement of Low-FP!(x!)

8383determines which High-NP will be moved into the funding range.

83934. If there were no non-profits in the county group in which

8405Low-FP! was located — i.e. a Low-FP!(y!) where there was no

8416High-NP(y!) — then the Corporation would remove the Low-FP(x!)

8425having the lowest score (there might be two from which to

8436choose). This happened in 2000, where Low-FP! was in the Small

8447County group, and there were no Small County non-profits to

8457elevate into the funding range. The Low-FP(x!) with the lowest

8467score happened to be in the Large County group.

84765. There were lower scored for-profits in the class of for-

8487profits that were below the tentative funding line, but these

8497are not being considered. See paragraph 18, supra .

85066. There was a Large County non-profit with a higher final

8517score than Lakesmart's, but it was within the tentative funding

8527range and hence has been disregarded in the discussion. See

8537paragraph 18, supra .

85417. There is only one highest scored domestic non-profit (if

8551there are any non-profits outside the funding range). In

8560contrast, there may be as many as three for-profits that can be

8572described as the lowest scored for-profit in a particular county

8582group, i.e. that fit the description Low-FP(x!). Because Low-

8591FP(x!) must be drawn from the same county group as High-

8602NP[D!](x), the county group placement of High-NP[D!](x)

8609determines which Low-FP will be taken out of the funding range.

86208. If there were no for-profits in the county group in which

8632High-NP[D!] (or, alternatively, High-NP![F!]) was located — e.g.

8640a High-NP[D!](y) where there was no Low-FP(y!) — then presumably

8650Petitioners would have the Corporation remove Low-FP(x!) and

8658replace it with either the High-NP[D](x) having the highest

8667score (there might be two from which to choose) or with the

8679High-NP[F](x!) having the highest score (again, there might be

8688two from which to choose).

86939. Under the QAP in effect at the time, only domestic non-

8705profits could be elevated into the funding range to satisfy the

8716Non-Profit Set-Aside, so presumably only applicants organized

8723under Florida law were ranked. For that reason, the discussion

8733of the 1997 process disregards the “domestic-foreign”


874110. Because the discussion considers only non-profits outside

8749the funding range, see paragraph 18, supra , the words “below the

8760funding range” were omitted from the abstracts of the rules and

8771QAP that preceded this analysis. It might be noted, however,

8781that as an adjective clause the phrase “within the applicable

8791Geographic Set-Aside” could be interpreted (and perhaps makes

8799better sense) as a modifier of the term “funding range,” so that

8812in practice one would first identify the applicable funding

8821range (for example, the funding range for the Small County

8831group) and then elevate the highest scored domestic (or foreign)

8841non-profit below that funding line. But, having identified this

8850nuance, it will be recognized that whether the phrase “within

8860the applicable Geographic Set-Aside” modifies “funding range” or

8868“highest scored Non-Profit Application,” the end result is

8877exactly the same; either way, the phrase describes the county

8887group from which High-NP must be drawn. Therefore, this

8896particular technicality will not be pointed out in the text.

890611. One of these, of course, would be High-NP[D!], which might

8917also (but would not necessarily) be High-NP![D!]. If a domestic

8927non-profit were the highest scored non-profit in the class of

8937non-profits, then it would also be the highest scored non-profit

8947in its county group.

895112. It cannot be assumed that the Rule requires the elevation

8962of the highest scored domestic non-profit in the subclass of

8972non-profits, making the county set-aside in which High-NP[D!]

8980resides the applicable group from which to draw the domestic

8990non-profit to be elevated, because that would be beg the


900113. If "moving" and "up" were not separated, i.e. if the QAP

9013instructed the reader to move up in ranking the High-NP[D]

9023within the applicable group, then the QAP might be ambiguous in

9034the way the Rule is ambiguous.

904014. To reach a contrary conclusion, the QAP would have needed

9051to say, in effect: If there is no domestic non-profit outside

9062the funding range, then the High-NP![F!] will be moved into the

9073funding range, within the applicable Geographic Set-Aside. The

9081actual language of the QAP does not express this thought.


9093W. Douglas Moody, Jr., Esquire

9098Graham, Moody & Sox, P.A.

9103215 South Monroe Street

9107Tallahassee, Florida 32301

9110Robert S. Cohen, Esquire

91141435 East Piedmont Drive, Suite 201-B

9120Tallahassee, Florida 32312-2938

9123Robert W. Turken, Esquire

9127Bilzin, Sumberg, Dunn, Baena,

9131Price & Axelrod, LLP

91352500 First Union Financial Center

9140200 South Biscayne Boulevard

9144Miami, Florida 33131-2336

9147David A. Barrett, Esquire

9151Barrett & Associates

9154111 South Monroe Street, Suite 3000

9160Tallahassee, Florida 32302-0930

9163Michael J. Glazer, Esquire

9167Ausley & McMullen

9170Post Office Box 391

9174Tallahassee, Florida 32302

9177Maureen McCarthy Daughton, Esquire

9181Nabors, Giblin & Nickerson, P.A.

91861500 Mahan Drive, Suite 200

9191Tallahassee, Florida 32308

9194Elizabeth G. Arthur, Esquire

9198Florida Housing Finance Corporation

9202227 North Bronough Street, Suite 5000

9208Tallahassee, Florida 32301

9211Mark Kaplan, Executive Director

9215Florida Housing Finance Corporation

9219227 North Bronough Street, Suite 5000

9225Tallahassee, Florida 32301

9228Carroll Webb

9230Executive Director and General Counsel

9235Joint Administrative Procedures Committee

9239Holland Building, Room 120

9243Tallahassee, Florida 32399-1300


9252All parties have the right to submit written exceptions within

926215 days from the date of this Recommended O rder. Any exceptions

9274to this Recommended Order should be filed with the agency that

9285will issue the Final Order in this case.

Select the PDF icon to view the document.
Date: 02/07/2001
Proceedings: Recommended Order
Date: 02/07/2001
Proceedings: Recommended Order cover letter identifying hearing record referred to the Agency sent out.
Date: 02/07/2001
Proceedings: Recommended Order issued (hearing held December 11, 2000; case proceeded under 120.57(1)(e), F.S.; rule challenge case suffix removed) CASE CLOSED.
Date: 01/19/2001
Proceedings: Notice of Filing Corrected Page; Corrected Page 19 filed by Respondent.
Date: 01/16/2001
Proceedings: Lakesmart`s Notice of Adoption of Post Trial Brief of Petitioner RPK Associates, Ltd. and Proposed Recommended Order of Intervenors (filed via facsimile).
Date: 01/16/2001
Proceedings: Proposed Recommended Order of Intervenors filed.
Date: 01/16/2001
Proceedings: Notice of Filing Proposed Recommended Order filed by Intervenors.
Date: 01/16/2001
Proceedings: Notice of Adoption of Post Trial Brief of Petitioner RPK Associates, Ltd. filed by Intervenors.
Date: 01/16/2001
Proceedings: Disk (Proposed Recommended Order RPK Associates, Ltd.) filed.
Date: 01/16/2001
Proceedings: RPK Associates, Ltd`s Post Trial Brief filed.
Date: 01/16/2001
Proceedings: Notice of Adoption (RPK Associates, Ltd.) filed.
Date: 01/16/2001
Proceedings: Florida Housing Finance Corporation`s Proposed Recommended Order filed.
Date: 01/16/2001
Proceedings: Florida Housing Finance Corporation Memorandum filed.
Date: 01/04/2001
Proceedings: Notice of Change of Address (effective January 25, 2001) filed by M. Daughton.
Date: 12/27/2000
Proceedings: Intervenor`s Objections to Respondent`s Proposed Exhibit Number 8 and Designation of Excerpted Portions of Lloyd Boggio`s Deposition of December 7, 2000 filed.
Date: 12/22/2000
Proceedings: Transcript (Volumes 1 and 2) filed.
Date: 12/22/2000
Proceedings: Notice of Filing Transcript filed.
Date: 12/19/2000
Proceedings: Stipulation filed.
Date: 12/14/2000
Proceedings: Respondent`s Exhibit Number 8 Excerpted Portions of Lloyd Boggio`s Deposition of December 7, 2000 filed.
Date: 12/11/2000
Proceedings: Stipulation filed. (parties agree that case should go forward as a proceeding under Section 120.57(1)(e), Florida Statutes)
Date: 12/08/2000
Proceedings: Petitioner Lakesmart Associates Prehearing Stipulation (filed via facsimile).
Date: 12/08/2000
Proceedings: Joint Prehearing Stipulation filed.
Date: 12/06/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Cancellation of Deposition of Priscilla Howard filed.
Date: 12/06/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Cancellation of the Deposition of Charlie Lydecker filed.
Date: 12/05/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Taking Deposition filed.
Date: 12/05/2000
Proceedings: Florida Housing Finance Corporation`s Amended Notice of Taking Deposition Duces Tecum filed.
Date: 11/29/2000
Proceedings: Notice of Filing - Responses from Florida Housing Finance Corporation to Meadow Glen, LTD.`s and Coral Village II, LTD.`s First Interrogatories; Responses from Florida Housing Finance Corporation to Meadow Glen, LTD.`s and Coral Village II, LTD.`s First Interrogatories filed.
Date: 11/28/2000
Proceedings: Subpoena Duces Tecum; Notice of Taking Deposition Duces Tecum (2); Notice of Taking Deposition (filed via facsimile).
Date: 11/28/2000
Proceedings: RPK Associates, LTD.`s Notice of Taking Deposition Duces Tecum filed.
Date: 11/27/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Taking Deposition Duces Teucm filed.
Date: 11/22/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Filing Answers to Meadow Glen, LTD. and Coral Village, II, LTD.`s First Interrogatories filed.
Date: 11/22/2000
Proceedings: Notice of Service of Intervenor`s Response to Respondent`s First Interrogatories filed.
Date: 11/22/2000
Proceedings: Intervenor`s Response to Respondent`s Request to Produce filed.
Date: 11/20/2000
Proceedings: Florida Housing Finance Corporation`s Response to Meadow Glen, LTD. and Coral Village II, LTD.`s First Request for Production of Documents filed.
Date: 11/16/2000
Proceedings: Meadow Glen, LTD.`s and Coral Village II, LTD.`s First Interrogatories to Florida Housing Finance Corporation filed.
Date: 11/16/2000
Proceedings: Meadow Glen, LTD. and Coral Village II, LTD.`s First Request for Production of Documents to Florida Housing Finance Corporation filed.
Date: 11/16/2000
Proceedings: Notice of Service of Interrogatories filed.
Date: 11/16/2000
Proceedings: Notice of Clarification (filed by Petitioner via facsimile).
Date: 11/16/2000
Proceedings: Petitioner`s Response to First Request to Produce filed.
Date: 11/16/2000
Proceedings: Lakesmart Associates, LTD., Answers to First Interrogatories filed.
Date: 11/16/2000
Proceedings: Lakesmart Asociates, LTD., Notice of Filing Answers to Florida Housing Finance Corporation First Interrogatories filed.
Date: 11/16/2000
Proceedings: RPK Associates, LTD Response to Respondent`s First Request for Production filed.
Date: 11/16/2000
Proceedings: Petitioner`s Notice of Service of Responses to Respondent`s Interrogatories filed.
Date: 11/15/2000
Proceedings: Meadow Glen, LTD`s and Coral Village II, LTD`s Petition to Intervene and Joinder in Lakesmart`s Petition to Challenge Agency Statements as Defined as Ruled filed in DOAH 00-4408RU.
Date: 11/13/2000
Proceedings: Response to Motion to Dismiss or Alternatively, to Strike (filed by Petitioner via facsimile).
Date: 11/13/2000
Proceedings: Florida Housing Finance Corporation`s First Request for Production of Documents to Meadow Glen, LTD. and Coral Village II, LTD. filed.
Date: 11/13/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Service of it`s First Interrogatories to Meadow Glen, LTD. and Coral Village II, LTD. filed.
Date: 11/13/2000
Proceedings: RPK Associates, LTD.`s Response to Motion to Dismiss or, Alternatively, to Strike filed.
Date: 11/09/2000
Proceedings: Order Allowing Intervention issued. (Meadow Glen, Ltd. and Coral Village II, Ltd.)
Date: 11/09/2000
Proceedings: Motion to Dismiss or Alternatively to Strike Meadow Glen, LTD.`s and Coral Village II, LTD.`s "Joinder" filed.
Date: 11/08/2000
Proceedings: Notice of Hearing issued (hearing set for December 11 and 12, 2000; 9:00 a.m.; Tallahassee, FL).
Date: 11/08/2000
Proceedings: Meadow Glen, LTD`s and Coral Village II, LTD`s Joinder in Petition to Challenge Agency Statements Defined as Rules filed.
Date: 11/08/2000
Proceedings: Order Granting Consolidation issued. (consolidated cases are: 00-004287RU 00-004408RU)
Date: 11/07/2000
Proceedings: Notice of Hearing - on Motion to Dismiss or Alternatively, to Strike (filed by M. Glazer via facsimile).
Date: 11/06/2000
Proceedings: Motion to Dismiss or, Alternatively, to Strike filed.
Date: 11/06/2000
Proceedings: Memorandum to Judge J. Van Laningham from M. Glazer In re: call in number for conference call hearing (filed via facsimile).
Date: 11/03/2000
Proceedings: Notice of Hearing filed by M. Glazer.
Date: 11/02/2000
Proceedings: Motion to Consolidate 00-4287 and 00-4408 filed by Respondent.
Date: 11/01/2000
Proceedings: Florida Housing Finance Corporation`s First Request for Production of Documents to Lakesmart Association, Inc. filed.
Date: 11/01/2000
Proceedings: Florida Housing Finance Corporation`s Notice of Service of it`s First Set of Interrogatories to Lakesmart Association, LTD. filed.
Date: 11/01/2000
Proceedings: Notice of Appearance (filed by M. Glazer).
Date: 10/24/2000
Proceedings: Order of Pre-hearing Instructions issued.
Date: 10/24/2000
Proceedings: Notice of Hearing issued (hearing set for November 21 and 22, 2000; 9:00 a.m.; Tallahassee, FL).
Date: 10/24/2000
Proceedings: Order of Assignment issued.
Date: 10/19/2000
Proceedings: Letter to Liz Cloud from A. Cole w/cc: Carroll Webb and Agency General Counsel sent out.
Date: 10/18/2000
Proceedings: Notice of Appearance (G. Rutberg) filed.
Date: 10/17/2000
Proceedings: Letter from Hallie I. Suber referring Petition to DOAH filed.
Date: 10/17/2000
Proceedings: Petition Challenging Agency Statements Defined as Rules filed.

Case Information

Date Filed:
Date Assignment:
Last Docket Entry:
Tallahassee, Florida
Department of Community Affairs


Related DOAH Cases(s) (2):

Related Florida Statute(s) (2):

Related Florida Rule(s) (1):

  • 67-48.025