00-004408 Rpk Associates, Ltd. vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Wednesday, February 7, 2001.

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.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LAKESMART ASSOCIATES, LTD., )

)

Petitioner, )

)

vs. ) Case No. 00-4287RU

)

FLORIDA HOUSING FINANCE )

CORPORATION, )

)

Respondent. )

)

RPK ASSOCIATES, LTD., )

)

Petitioner, )

)

vs. ) Case No. 00-4408RU

)

FLORIDA HOUSING FINANCE )

CORPORATION, )

)

Respondent. )

)

MEADOW GLEN, LTD. and CORAL )

VILLAGE II, LTD., )

)

Intervenors. )

_______________________________ )

RECOMMENDED ORDER

The parties having been provided proper notice,

Administrative Law Judge John G. Van Laningham of the Division

of Administrative Hearings convened a formal hearing of this

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

APPEARANCES

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

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

215 South Monroe Street

Tallahassee, Florida 32301

For Petitioner: Robert S. Cohen, Esquire

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

Tallahassee, Florida 32312-2938

R obert W. Turken, Esquire

Bilzin, Sumberg, Dunn, Baena,

Price & Axelrod, LLP

2500 First Union Financial Center

200 South Biscayne Boulevard

Miami, Florida 33131-2336

For Intervenors: David A. Barrett, Esquire

Barrett & Associates

111 South Monroe Street, Suite 3000

Tallahassee, Florida 32302-0930

For Respondent: Michael J. Glazer, Esquire

Ausley & McMullen

Post Office Box 391

Tallahassee, Florida 3230 2

Maureen McCarthy Daughton, Esquire

Nabors, Giblin & Nickerson, P.A.

1500 Mahan Drive, Suite 200

Tallahassee, Florida 32308

Elizabeth G. Arthur, Esquire

Florida Housing Finance Corporation

227 North Bron ough Street, Suite 5000

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

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

whether Respondent Florida Housing Finance Corporation (the

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

Administrative Code, and the corresponding provisions on the

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

Corporation’s 2000 Qualified Allocation Plan (collectively, the

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

the substantial interests of Petitioners and Intervenors.

PRELIMINARY STATEMENT

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

(“Lakesmart”) filed a petition seeking an administrative

determination that certain statements by the Corporation

constituted invalid unadopted rules, initiating Case Number 00-

4287RU. Petitioner RPK Associates, Ltd. (“RPK”) commenced Case

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

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

consolidate the two cases. An Order granting consolidation was

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

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

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

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

entered granting Intervenors leave to intervene in the

consolidated cases.

A Joint Prehearing Stipulation was filed December 8, 2000.

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

entered into and filed a separate Stipulation. In their

Stipulation, the parties agreed that this matter should go

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

Statutes, with the administrative law judge entering a

recommended order pursuant to Section 120.57(1), Florida

Statutes. The Stipulation further provided that the sole issue

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

interpretation of the Instructions was proper. The parties

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

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

determine the stipulated issue, and would require no proof by

the Corporation. The administrative law judge accepted the

parties’ Stipulation, which is hereby adopted and incorporated

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

therewith.

At the final hearing, Lakesmart presented the testimony of

Gwen Lightfoot and Lloyd Boggio. Meadow Glen and Coral Village

presented the testimony of Bowen Arnold. In addition,

Petitioners’ Exhibits 1 through 8 were received into evidence.

The Corporation presented the testimony of its Executive

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

through 12 were also admitted into evidence. Respondent’s

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

by Respondent.

Respondent’s Exhibit 8, as identified, consisted of

portions of the deposition of Lloyd Boggio that the Corporation

designated after the final hearing. In accordance with the

administrative law judge’s instructions, the Corporation filed

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

parties’ objections. Intervenors timely objected to some of the

Corporation’s deposition designations. Accordingly, the

following rulings are made regarding Respondent’s Exhibit 8.

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

designated by the Corporation that shall be received into

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

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

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

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

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

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

admitted into evidence but have been received as a proffer.

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

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

received without objection.

The parties submitted proposed recommended orders and post-

hearing memorandums that have been carefully considered by the

administrative law judge in the preparation of this Recommended

Order.

FINDINGS OF FACT

The evidence presented at final hearing established the

facts that follow.

The Corporation and Its Duty

to Allocate Federal Income Tax Credits

1. The Corporation is a public corporation that

administers governmental programs relating to the financing and

refinancing of housing and related facilities in Florida. It is

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

the governor appoints plus the Secretary of the Department of

Community Affairs, sitting ex-officio.

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

designated "housing credit agency" as defined in the Internal

Revenue Code. As such, the Corporation has the responsibility

and authority to establish procedures necessary for the

allocation and distribution of low-income housing federal tax

credits, which are created under and governed almost entirely by

federal law.

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

development of low-income housing for families, provide a

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

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

the low-income housing project for which the credits were

awarded continues to satisfy Internal Revenue Code requirements.

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

capita basis and then awarded, through state-administered

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

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

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

discount to obtain immediate cash for its project.

4. As a populous st ate, Florida receives between

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

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

eligible recipients pursuant to a Qualified Allocation Plan

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

must be approved by the governor, is incorporated by reference

in Rule 67-48.025, Florida Administrative Code.

5. In accordance with the QAP, the Corporation employs

various set-asides and special targeting goals that play a

substantial part in determining which applicants will receive

tax credits in a particular year. While targeting goals are

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

Thus, special targeting goals may be met if credits are

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

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

whose developments fall within the defined set-aside.

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

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

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

the available tax credits be awarded to applicants in each of

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

Small County. In 2000, the allocation percentages for these

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

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

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

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

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

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

special targeting goals will be ignored in the discussion that

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

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

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

credits.

The Petitioners and Intervenors

(Collectively, "Petitioners")

8. Lakesmart is a Florida limited partnership which has as

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

2000 application cycle, Lakesmart applied to the Corporation for

an award of tax credits from the Medium County allocation.

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

Profit Set-Aside.

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

application cycle, RPK applied to the Corporation for an award

of tax credits from the Large County allocation. For purposes

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

10. Meadow Glen and Coral Village are Florida limited

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

general partners. Both applied to the Corporation in the 2000

application cycle for an award of tax credits from the Medium

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

for purposes of the Non-Profit Set-Aside.

Evaluation, Ranking, and the Tentative Funding Range

11. To distribute the finite amount of tax credits

available each year, the Corporation has designed a competitive

process whereby potential recipients file applications that the

Corporation grades according to selection criteria set forth in

the QAP. Points are assigned based on compliance with these

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

that met the threshold requirements will have earned a final

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

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

projects.

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

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

Geographic Set-Asides require that the applicants be sorted and

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

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

from whose credit allocations the successful applicants will be

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

the three highest scores in the entire applicant pool were all

in the Large County group and the applicant with the fourth

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

the latter applicant would be ranked first in the Small County

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

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

to exhaust the credits allocated to that group, then the

applicant with the third highest score overall would not be

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

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

funded. 16/

13. After the Corporation has sorted the applicants by

county group and ranked them, within their respective groups,

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

draws a tentative funding line within each group. Applicants

above these lines are within the tentative funding range and

thus apparently successful. Conversely, an applicant below the

tentative funding line in its county group will not receive tax

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

targeting goal, it is moved into the funding range.

14. In the 2000 application cycle, a preliminary outcome

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

the aggregate of credits requested by the non-profit applicants

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

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

credits. Therefore, the Corporation needed to elevate as many

apparently unsuccessful non-profit applicants into the funding

range — and concomitantly to remove as many apparently

successful for-profit applicants from the funding range to make

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

fulfill the 12% quota.

An Aside on Categorical Ranking

15. The separation of applicants into three groups

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

on determining which applicants will receive credits, was

mentioned above. To better understand the parties' dispute

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

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

putatively unsuccessful non-profit applicant at the expense of a

putatively successful for-profit applicant, a second, more

detailed look at the implications of categorical ranking will be

helpful.

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

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

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

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

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

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

Finally, to repeat for emphasis, all qualified applicants,

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

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

County, Medium County, and Large County.

17. The following chart depicts the relevant

classification of applicants within the Applicant Pool:

Applicant Pool

Non-profits For-profits

Domestic Foreign

Small County Medium County Large County

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

categories, applicants may be ranked in order of their

comparative scores in a variety of combinations, depending on

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

profits, all foreign non-profits, etc.

18. Once the Corporation has drawn the tentative funding

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

preliminarily which applicants will receive funding and which

will not, two additional categories exist: applicants within

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

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

only non-profits discussed below are those outside the tentative

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

considered are those within the tentative funding range, unless

otherwise stated. 1/

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

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

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

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

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

so on. More information is needed to pinpoint a particular

entity.

20. For ease of reference, and to facilitate the

discussion and disposition of the present dispute, the following

abbreviations will be used in this Recommended Order as

shorthand descriptions of applicants’ defining characteristics:

Abbreviation Meaning

NP Non-profit applicant

FP For-profit applicant

High- highest scored

Low- lowest s cored

D domestic entity ( i.e. organized

under Florida law)

F foreign entity ( i.e. organized

under the law of a state other

than Florida)

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

respectively

! highest or lowest scored within

the indicated category; e.g. High-

NP(S!) means highest scored non-

profit within the Small County

group; Low-FP(S!) means lowest

scored for-profit in the Small

county group

x, y variables

Combining these abbreviations provides an increasingly precise

description, as more information is added. For example:

Combination Description

High-NP Highest scored non-profit in some,

unknown category

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

profit, unknown group; is not

necessarily the highest scored

non-profit in the class of non-

profits

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

unknown group; is not necessarily

the highest scored non-profit in

the class of non-profits

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

profit, located in the Small

County group; not the highest

scored non-profit within the Small

County group

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

Small County group; is a domestic

corporation but is neither the

highest scored non-profit nor

highest scored domestic non-profit

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

in the Small County group; is

neither the highest scored non-

profit, the highest scored

domestic non-profit, nor the

highest scored non-profit in the

Small County group

Low-FP! Lowest scored for-profit in

the class of for-profits

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

Medium County group; is not

necessarily the lowest scored for-

profit in the class of for-profits

The Controversy: Gored Oxen and Leapt-Over Frogs

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

application cycle when an insufficient number of non-profit

applicants wound up initially within the tentative funding range

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

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

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

provisions have the same meaning, despite their differences in

wording. The undersigned has concluded, however, that the

differences, though subtle, substantially affect the outcome of

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

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

provides in pertinent part:

To ensure that the minimum 10% is set aside,

the Corporation has determined that an

initial allocation of 12% to qualified Non-

Profits will be met. In order to achieve

the initial 12% set aside, Applications from

Applicants that qualify or whose General

Partner qualifies as a Non-Profit entity

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

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

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

organized under Chapter 617, Florida

Statutes, or organized under similar state

law if organized in a jurisdiction other

than Florida and meet scoring threshold

requirements shall be moved into the funding

range, in order of their comparative scores,

with Applicants whose Non-Profit entity is

organized under Florida law receiving

priority over Non-Profit entities of other

jurisdictions, until the set-aside is

achieved. The last Non-Profit Development

that is moved into the funding range in

order to achieve the 12% initial set-aside

shall be fully funded even though that may

result in a higher Non-Profit set-aside.

This will be accomplished by removing the

lowest scored Application of a for-profit

Applicant from the funding range and

replacing it with the highest scored Non-

Profit Application below the funding range

within the applicable Geographic Set-Aside

pursuant to the QAP. This procedure will be

used again on or after October 1, if

necessary, to ensure that the Agency

allocates at least 10% of its Allocation

Authority to qualified Non-Profit

Applicants. Any for-profit Applicant so

removed from the funding range will NOT be

entitled to any consideration or priority

for the receipt of current or future Housing

Credits other than placement on the current

ranking and scoring list in accordance with

its score. Binding Commitments for Housing

Credits from a future year will not be

issued for Applicants so displaced.

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

states:

[The Corporation] has determined that an

initial allocation of 12% to qualified Non-

Profits will ensure that the 10% requirement

will be met in the event that all

Developments included in the initial 12% do

not receive an allocation. In order to

achieve the initial 12% set-aside a

tentative funding line will be drawn. Then,

Applications from Non-Profit Applicants that

meet scoring threshold requirements shall be

moved into the tentative funding range, in

order of their scores with Applicants whose

Non-Profit entities are organized under

Chapter 617, Florida Statutes, having

priority, until the 12% set-aside is

achieved. This will be accomplished by

moving the lowest scored Application of a

for-profit Applicant in the funding range

down in ranking so it is ranked below the

lowest Non-Profit Applicant within the

funding range and moving the highest scored

Non-Profit Applicant organized under Chapter

617, Florida Statutes below the funding

range within the applicable Geographic Set-

Aside pursuant to the QAP up in ranking so

it is ranked one ranking space above the

for-profit Applicant that was moved down in

ranking. If no such Applicant exists, the

highest Non-Profit Applicant organized under

similar statutes from another state which is

below the funding range within the

applicable Geographic Set-Aside pursuant to

the QAP, will be moved into funding range in

the same manner as stated in the previous

sentence. This procedure will be used again

on or after October 1, 2000, if necessary,

to ensure that the [Corporation] allocates

at least 10% of its Allocation Authority for

2000 to qualified Non-Profit Applicants.

Any for-profit Applicant so removed from the

funding range will NOT be entitled to any

consideration or priority for the receipt of

current or future housing credits other than

placement on the current ranking and scoring

list in accordance with its score. Binding

Commitments for housing credits from a

future year will not be issued for

Applicants so displaced. The last Non-

Profit Applicant moved into the funding

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

aside or in order to meet the minimum 10%

set-aside after October 1, 2000, will be

fully funded contingent upon successful

credit underwriting even though that may

result in a higher Non-Profit set-aside.

After the full Non-Profit set-aside amount

has been allocated, remaining Applications

from Non-Profit organizations shall compete

with all other Applications in the HC

Program for remaining Allocation Authority.

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

Florida Administrative Code, and paragraph 2 of the 2000 QAP

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

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

2000 application cycle has caused considerable controversy — and

led to this proceeding. The controversial interpretation was

publicly manifested on September 15, 2000, when the Corporation

published a preliminary ranking sheet on its web site which

reflected adjustments that its staff had made to fulfill the

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

applicants were complaining that the Corporation's staff had

misinterpreted the Instructions.

25. The Corporation's staff had construed the Instructions

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

within the tentative funding range to satisfy the Non-Profit

Set-Aside, the following procedure must be followed:

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

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

profit in county group x, then replace Low-

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

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

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

might not be in county group x.

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

had settled upon operated, in the circumstances presented, to

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

tentative funding range was established, the lowest scored for-

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

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

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

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

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

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

interpretation of the Instructions, as revealed by the rankings

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

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

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

NP. (Coral Village and Meadow Glen were the second-

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

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

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

class of non-profit applicants.) 5/

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

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

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

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

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

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

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

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

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

those four putative beneficiaries had a lower final score than

Meadow Glen's.

29. Lakesmart and others who disagreed with the

Corporation’s staff advanced an alternative interpretation of

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

Set-Aside is met requires the following maneuver:

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

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

profit outside the funding range, then

replace Low-FP(x!) with High-NP.

7/

This interpretation admits the possibility that Low-FP! might

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

group x.

30. Under this interpretation, favored by all Petitioners,

Lakesmart and Coral Village would be elevated into the funding

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

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

Petitioners' interpretation would require that some other for-

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

31. These competing interpretations of the Instructions

were presented to the Corporation's board for consideration at

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

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

board voted unanimously to accept the interpretation that the

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

rankings. Later in the same meeting the board adopted final

rankings, which were prepared in accordance with the approved

interpretation, that resulted in the denial of Petitioners'

applications for tax credits.

The 1997 Awards: Precedent or Peculiarity?

32. Petitioners maintain that their interpretation of the

Instructions is supported by a supposed precedent allegedly set

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

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

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

non-profits within the preliminary funding range failed to reach

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

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

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

scored non-profits that otherwise would not have received

credits.

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

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

satisfying it:

The Agency will allocate not less than 10%

of the state’s allocation authority to

projects involving qualified, non-profit

Applicants, provided they are non-profits

organized under Chapter 617, Florida

Statutes, and as set forth in Section

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

amended, and Rule Chapter 9I-48, Florida

Administrative Code.

Respondent's Exhibit 2, page 8.

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

did contain directions for carrying out the required

substitution. It prescribed the following procedure for

elevating non-profits:

If 10% of the total Allocation Authority is

not utilized by Projects with Non-Profit

Applicants, Applications from Non-Profit

Applicants that meet scoring threshold

requirements shall be moved into the funding

range, in order of their comparative scores,

until the 10% set-aside is achieved. This

will be accomplished by removing the lowest

scored Application of a for-profit Applicant

from the funding range and replacing it with

the highest scored Non-Profit Application

below the funding range within the

applicable Geographic Set-Aside pursuant to

section (2) above.

Petitioners' Exhibit 1. These provisions will be referred to

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

Instructions.

36. Gwen Lightfoot was the Corporation's Deputy

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

responsible for implementing the rules relating to the award of

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

Aside, Ms. Lightfoot followed the 1997 Directions as she

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

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

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

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

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

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

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

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

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

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

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

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

Non-Profit Set-Aside was met.

37. Although the Corporation presently argues that its

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

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

Profit Set-Aside, a preponderance of evidence established that

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

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

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

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

interpretation and implementation of the 1997 Directions. Ms.

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

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

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

irrespective of what any individual board member might

subjectively have understood at the time.

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

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

48.032 and amended three times, the most recent amendment

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

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

though not identical, retains the essential meaning of its

predecessor.

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

times, the version controlling the 2000 application cycle having

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

by reference in the Florida Administrative Code on February 24,

2000. Unlike the revisions to Rule 9I-48.032(3), however, the

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

significant, because the 2000 QAP sets forth a procedure for

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

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

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

CONCLUSIONS OF LAW

40. The Division of Administrative Hearings has personal

and subject matter jurisdiction in this proceeding pursuant to

Sections 120.569 and 120.57(1), Florida Statutes.

41. The parties stipulated to the standing of Petitioners

(including Intervenors) to maintain this proceeding, and the

evidence established that the substantial interests of each of

them were affected by the agency action at issue.

42. Petitioners have the burden of going forward with the

evidence as well as the ultimate burden of establishing the

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

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

1998), and therefore must demonstrate the impropriety of the

Corporation's interpretation of the Instructions.

43. Florida courts generally defer to an agency’s

interpretation of its own rules and the statutes that it

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

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

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

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

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

This deference is given to the interpretations of, and meanings

assigned to, such rules and statutes by the officials charged

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

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

1983).

44. From the general principle of deference follows the

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

the sole possible interpretation or even the most desirable one;

it need only be within the range of permissible interpretations.

State Board of Optometry v. Florida Society of Ophthalmology ,

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

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

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

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

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

193, 197 (Fla. 1st DCA 1991). Obviously, an agency cannot

implement any conceivable construction of a statute or rule no

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

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

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

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

contradicts the unambiguous language of the rule, the

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

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

676, 678 (Fla. 1st DCA 1987); see also Legal Environmental

Assistance Foundation v. Board of County Commissioners of

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

1994)(“unreasonable interpretation” will not be sustained).

46. In determining which side has advanced the proper

interpretation, it is helpful to reduce the language of the

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

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

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

that are not in dispute and abbreviating others, the structure

of the pertinent provisions becomes much clearer. Thus:

Rule 9I-48.032(3)

[NPs] shall be moved into the funding range,

in order of their comparative scores, . . .

by removing the [Low-FP] and replacing it

with the [High-NP] within the applicable

Geographic Set-Aside[.]

* * *

Rule 67-48.032(2)

[NPs] shall be moved into the funding range,

in order of their comparative scores, with

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

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

it with the [High-NP] within the applicable

Geographic Set-Aside[.]

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

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

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

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

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

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

present dispute is concerned, these two rules are identical in

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

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

the analysis would not be materially different if the earlier

rule were its subject.

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

elevating non-profits when necessary. But the 2000 version

applicable to Petitioners' applications did. Boiled down to its

operative terms, the 2000 QAP provides:

[NPs] shall be moved into the tentative

funding range, in order of their scores with

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

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

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

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

If no such Applicant exists, the [High-

NP[F]] within the applicable Geographic Set-

Aside . . . will be moved into funding range

in the same manner as stated in the previous

sentence.

Interpreting the Rule

48. Two questions naturally arise upon reading the Rule.

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

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

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

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

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

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

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

must be found in the phrase “within the applicable Geographic

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

parameter. The problem is, the phrase can be understood

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

Rule, standing alone, is ambiguous.

The "Anti-For-Profit" Construction

49. The crucial language may fairly be read as an

adjective clause, further modifying High-NP. Under this

interpretation, which probably comes more naturally to most

readers (and makes the sentence more grammatical) given the

proximity of the clause to its apparent object, the phrase

“within the applicable Geographic Set-Aside” describes the

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

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

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

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

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

group. However, because the Rule also requires that domestic

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

domestic non-profit in the applicable group would not

necessarily be the highest scored domestic non-profit in the

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

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

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

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

description, 10/ which means that the applicable group simply

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

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

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

defined, is removed.

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

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

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

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

offer no meaningful direction regarding how to proceed. Once

the decision is made that the Rule requires the removal and

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

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

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

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

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

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

NP[D](M).

52. Because this interpretation effectively places greater

emphasis on removing the for-profit with the lowest possible

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

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

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

Corporation’s interpretation.

The "Pro-Non-Profit" Construction

53. Alternatively, the phrase “within the applicable

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

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

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

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

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

moved into the funding range, in order of their comparative

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

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

actual language is perhaps a bit less grammatical, it is

nevertheless not unreasonable to construe the crucial phrase as

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

in the applicable group. As with the competing construction

discussed above, the applicable group can be deduced, as

follows.

54. Initially it can be observed that because the

replacing occurs in the funding range and adversely selects a

for-profit, under this interpretation the applicable group must

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

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

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

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

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

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

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

apparently intended to match the one in which the highest scored

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

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

be elevated — a general description that without more might

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

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

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

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

possibilities. But the Rule also requires that domestic non-

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

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

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

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

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

offer no meaningful guidance. Accordingly, the applicable

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

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

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

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

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

NP[D!](S).

56. Because this interpretation effectively places greater

emphasis on elevating the non-profit with the highest possible

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

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

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

interpretation.

Interpreting the QAP

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

differences in terminology are subtle — but the subtle

differences materially affect the interpretation.

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

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

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

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

terminology leads to an important difference in the sentence

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

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

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

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

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

Set-Aside, which shall be moved up.

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

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

ultimately the phrase "within the applicable Geographic Set-

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

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

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

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

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

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

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

an instruction regarding where to do the moving would be

contrived and unnatural, divorcing the language from its common

meaning; ordinary people attempting to communicate that thought

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

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

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

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

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

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

("[G]rammatical construction of contracts generally requires

that a relative or qualifying phrase be construed as referring

to its nearest antecedent.").

60. This plain-language understanding of the QAP is

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

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

no domestic non-profit within the applicable county group to

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

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

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

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

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

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

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

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

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

interpretation as an adverbial clause. 13/

61. Once accepted that the phrase "within the applicable

Geographic Set-Aside" is an adjective clause further describing

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

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

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

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

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

construction discussed above in connection with the

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

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

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

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

the non-profit beneficiary is determined with reference to the

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

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

non-profit.

Conflating the Rule and QAP

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

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

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

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

QAP must be construed together as a cohesive, internally

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

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

668, 671 (Fla. 1st DCA 1994).

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

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

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

one of the two permissible constructions thereof that the

parties have advanced matches precisely the unambiguous meaning

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

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

Taken together, the Instructions plainly provide that, when

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

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

from the county group corresponding with that of the unfortunate

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

which will be displaced. The Corporation correctly interpreted

the Instructions in the 2000 application cycle.

64. The Corporation’s interpretation of the 1997

Directions, with which Petitioners’ present position is in

enthusiastic accord, does not demand a different resultue,

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

followed a permissible interpretation of the ambiguous Rule 9I-

48.032(3), Florida Administrative Code (1997). 14/ And from

that premise, a plausible argument can be made that the

Corporation’s interpretation and application of the 1997

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

therefore that proof of the methodology used in 1997 should be

received and considered as extrinsic evidence of the intended

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

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

2d 817 (1995)(interpretation parties give to contract may be

best indication of their intentions); Vienneau v. Metropolitan

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

terms of contract are doubtful, court may consider

interpretation placed on contract by the parties, provided such

interpretation is not completely at variance with legal

principles of contract interpretation).

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

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

first occasion calling for its application establishes a meaning

from which the agency cannot thereafter depart except by validly

adopting a subsequent rule change, 15/ see Cleveland Clinic

Florida Hospital v. Agency for Health Care Administration , 679

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

701 (1997), the Corporation did in fact validly adopt a

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

the QAP after the 1997 awards and before the 2000 application

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

Cleveland Clinic case instructs an agency to do when it changes

its mind about an earlier established policy, practice, or

procedure. Consequently, the Corporation’s interpretation of

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

whatever precedential value it might have had upon the adoption

of the unambiguous language contained in paragraph 2 of the 2000

QAP.

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

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

48.032(2), Florida Administrative Code — the more recently

adopted language of the QAP unambiguously expresses the

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

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

45, 46 (Fla. 1994)(when two statutes are in conflict, later

promulgated statute should prevail as last expression of

legislative intent).

Conclusion

67. Both sides' interpretations can produce a result that

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

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

of another which is preferred in the service of a perceived

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

desirable to discriminate against the lowest scored for-profit

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

to give preferential treatment to the highest scored (domestic

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

would have liked, is simply a policy decision. The

Instructions, construed together as a whole, clearly convey the

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

here. The Corporation properly followed its Instructions in the

2000 Application cycle.

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

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

dismissing the petitions of Petitioner Lakesmart, Petitioner

RPK, and Intervenors Meadow Glen and Coral Village.

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

Tallahassee, Leon County, Florida.

___________________________________

JOHN G. VAN LANINGHAM

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 7th day of February, 2001.

ENDNOTES

1. To make the point without the distraction of unnecessary

details, the example in the text ignores the potential effects

of other set-asides and the special targeting goals.

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

profits below the tentative funding lines is appropriate because

none of them is affected by the disputed procedure for moving

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

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

the former are never displaced and the latter are never

elevated.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

score happened to be in the Large County group.

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

profits that were below the tentative funding line, but these

are not being considered. See paragraph 18, supra .

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

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

range and hence has been disregarded in the discussion. See

paragraph 18, supra .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

two from which to choose).

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

profits could be elevated into the funding range to satisfy the

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

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

of the 1997 process disregards the “domestic-foreign”

distinction.

10. Because the discussion considers only non-profits outside

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

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

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

that as an adjective clause the phrase “within the applicable

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

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

in practice one would first identify the applicable funding

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

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

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

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

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

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

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

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

particular technicality will not be pointed out in the text.

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

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

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

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

in its county group.

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

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

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

resides the applicable group from which to draw the domestic

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

question.

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

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

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

the way the Rule is ambiguous.

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

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

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

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

actual language of the QAP does not express this thought.

COPIES FURNISHED:

W. Douglas Moody, Jr., Esquire

Graham, Moody & Sox, P.A.

215 South Monroe Street

Tallahassee, Florida 32301

Robert S. Cohen, Esquire

1435 East Piedmont Drive, Suite 201-B

Tallahassee, Florida 32312-2938

Robert W. Turken, Esquire

Bilzin, Sumberg, Dunn, Baena,

Price & Axelrod, LLP

2500 First Union Financial Center

200 South Biscayne Boulevard

Miami, Florida 33131-2336

David A. Barrett, Esquire

Barrett & Associates

111 South Monroe Street, Suite 3000

Tallahassee, Florida 32302-0930

Michael J. Glazer, Esquire

Ausley & McMullen

Post Office Box 391

Tallahassee, Florida 32302

Maureen McCarthy Daughton, Esquire

Nabors, Giblin & Nickerson, P.A.

1500 Mahan Drive, Suite 200

Tallahassee, Florida 32308

Elizabeth G. Arthur, Esquire

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

Mark Kaplan, Executive Director

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301

Carroll Webb

Executive Director and General Counsel

Joint Administrative Procedures Committee

Holland Building, Room 120

Tallahassee, Florida 32399-1300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this R ecommended O rder. Any exceptions

to this R ecommended O rder should be filed with the agency that

will issue the F inal O rder in this case.