09-003330 Pasco Cwhip Partners, Llc vs. Florida Housing Finance Corporation Status: Closed Recommended Order on Thursday, February 18, 2010.

Summary: The decisions giving rise to this dispute, which involve the preparation or modification of the agency's budget, are not subject to quasi-judicial adjudication. It is therefore recommended that these cases be dismissed for lack of jurisdiction.

)

MDG CAPITAL CORPORATION, )

)

Petitioner, ) Case No. 09-4031

)

vs. )

)

FLORIDA HOUSING FINANCE )

CORPORATION, )

)

Respondent. )

_______________________________ )

RECOMMENDED ORDER

This case came before Administrative Law Judge John G.

Van Laningham for final hearing on October 13-14, 2009, in

Tallahassee, Florida.

APPEARANCES

For Petitioner Pasco CWHIP Partners, LLC:

Dan R. Stengle, Esquire

Katie S. Buchanan, Esquire

Hopping Green & Sams, P.A.

119 South Monroe Street, Suite 300

Tallahassee, Florida 32301

For Petitioners Legacy Pointe, Inc., Villa Capri, Inc.,

Prime Homebuilders, and MDG Capital Corp.:

Michael P. Donaldson, Esquire

Daniel Hernandez, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Suite 500

Tallahassee, Florida 32301

For Respondent: Hugh R. Brown, Deputy General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301-1329

STATEMENT OF THE ISSUES

The threshold issue in this case is whether the decisions

giving rise to the dispute, which concern the allocation and

disbursement of funds appropriated to Respondent by the

legislature and thus involve the preparation or modification of

the agency's budget, are subject to quasi-judicial adjudication

under the Administrative Procedure Act. If the Division of

Administrative Hearings were possessed of subject matter

jurisdiction, then the issues would be whether Respondent is

estopped from implementing its intended decisions to "de-

obligate" itself from preliminary commitments to provide low-

interest loans to several projects approved for funding under

the Community Workforce Housing Innovation Pilot Program; and

whether such intended decisions would constitute breaches of

contract or otherwise be erroneous, arbitrary, capricious, or

abuses of the agency's discretion.

PRELIMINARY STATEMENT

On December 31, 2007, Respondent Florida Housing Finance

Corporation solicited applications from developers of low-cost

housing who might be interested in obtaining low-interest loans

through the Community Workforce Housing Innovation Program,

which provides financial assistance to businesses that, through

construction or rehabilitation, expand the stock of affordable

housing. In response, Petitioners Pasco CWHIP Partners, LLC;

Legacy Pointe, Inc.; Villa Capri, Inc.; Prime Homebuilders; and

MDG Capital Corporation, submitted applications for financing.

Petitioners each had a project that, in due course, was selected

for potential funding, and, on or about November 12, 2008, each

of them received a preliminary commitment letter from

Respondent.

In January 2009, the Florida Legislature de-appropriated

$190 million from the funds previously allocated to Respondent,

directing Respondent to return this sum to the state treasury on

or before June 1, 2009. Respondent, in turn, modified its

budget to account for this deep cut, which significantly reduced

the amount of money that Respondent could disburse through the

various programs it administers; in the process, Respondent

decided that Petitioners' respective projects could not be

funded. On April 24, 2009, Respondent notified each of the

Petitioners that its project had been "de-obligated"——meaning

that Respondent would have no further obligations under the

preliminary commitments that had been given regarding financing

for their projects.

Petitioners timely requested hearings. On June 17, 2009,

Respondent forwarded the several cases to the Division of

Administrative Hearings, where the undersigned consolidated them

for further proceedings pursuant to Sections 120.569 and 120.57,

Florida Statutes.

The final hearing took place on October 13-14, 2009. At

the outset, the parties submitted a Pre-hearing Stipulation.

Seven Joint Exhibits, numbered 1-7, were offered and received as

well.

Petitioner Pasco CWHIP Partners, LLC, presented the

testimony of its principal, Thomas E. Smith, and offered

Exhibits 1–3, each of which was received into evidence without

objection.

Petitioners Legacy Pointe, Inc., and Villa Capri, Inc.,

called Leon J. Wolfe as a witness. Mr. Wolfe was both a fact

witness and an expert witness, offering opinions relating to

affordable housing development in the State of Florida. In

addition, these two Petitioners introduced six Exhibits apiece,

numbered 1-6, all 12 of which were admitted without objection.

James Dupre, an employee of Prime Homebuilders, testified

for this Petitioner, which also offered a total of 17 exhibits

(numbered 1-7 for Village of Portofino Meadows, 1-5 for The

Reserve at the Falls of Portofino, and 1-5 for Park Royale

Residences at Portofino Springs, each of which is a separate

housing development), all of them being received without

objection.

Petitioner MDG Capital Corporation presented the testimony

of its president, William J. Klohn, and moved its Exhibits 1-9

into evidence without objection.

In addition to the foregoing evidence, Petitioners called

Jeffrey Sharkey, Ph.D., as an expert in the areas of affordable

housing and funding of such housing under the Community

Workforce Housing Innovation Program. Dr. Sharkey's hearing

testimony was supplemented with the transcript of his

deposition, which had been taken on October 8, 2009.

Respondent's Executive Director, Stephen Auger, testified

on the agency's behalf. Respondent's Exhibits 1-9 were admitted

into evidence as well.

The two-volume final hearing transcript was filed on

October 29, 2009. The initial deadline for the parties to file

Proposed Recommended Orders was November 18, 2009. That

deadline was extended until December 3, 2009, on Petitioners'

unopposed motion. On November 30, 2009, Petitioners filed a

motion to abate this proceeding pending the outcome of a

separate, but related, rule challenge. The undersigned declined

to place the case in abeyance but further enlarged the deadline

for the parties to file their respective Proposed Recommended

Orders, to January 5, 2010. The parties timely filed their

Proposed Recommended Orders, each of which was duly considered

in the preparation of this Recommended Order.

Unless otherwise indicated, citations to the Florida

Statutes refer to the 2009 Florida Statutes.

FINDINGS OF FACT

1. Petitioners Pasco CWHIP Partners, LLC ("Pasco

Partners"); Legacy Pointe, Inc. ("Legacy"); Villa Capri, Inc.

("Villa Capri"); Prime Homebuilders ("Prime"); and MDG Capital

Corporation ("MDG") (collectively, "Petitioners"), are Florida

corporations authorized to do business in Florida. Each is a

developer whose business activities include building affordable

housing.

2. The Florida Housing Finance Corporation ("FHFC") is a

public corporation organized under Chapter 420, Florida

Statutes, to implement and administer various affordable housing

programs, including the Community Workforce Housing Innovation

Pilot Program ("CWHIP").

3. The Florida Legislature created CWHIP in 2006 to

subsidize the cost of housing for lower income workers performing

"essential services." Under CWHIP, FHFC is authorized to lend up

to $5 million to a developer for the construction or

rehabilitation of housing in an eligible area for essential

services personnel. Because construction costs for workforce

housing developments typically exceed $5 million, developers

usually must obtain additional funding from sources other than

CWHIP to cover their remaining development costs.

4. In 2007, the legislature appropriated $62.4 million for

CWHIP and authorized FHFC to allocate these funds on a

competitive basis to "public-private" partnerships seeking to

build affordable housing for essential services personnel. 1

5. On December 31, 2007, FHFC began soliciting

applications for participation in CWHIP. Petitioners submitted

their respective applications to FHFC on or around January 29,

2008. FHFC reviewed the applications and graded each of them on

a point scale under which a maximum of 200 points per application

were available; preliminary scores and comments were released on

March 4, 2008. FHFC thereafter provided applicants the

opportunity to cure any deficiencies in their applications and

thereby improve their scores. Petitioners submitted revised

applications on or around April 18, 2008.

6. FHFC evaluated the revised applications and determined

each applicant's final score. The applications were then ranked,

from highest to lowest score. The top-ranked applicant was first

in line to be offered the chance to take out a CWHIP loan,

followed by the others in descending order to the extent of

available funds. Applicants who ranked below the cut-off for

potential funding were placed on a wait list. If, as sometimes

happens, an applicant in line for funding were to withdraw from

CWHIP or fail for some other reason to complete the process

leading to the disbursement of loan proceeds, the highest-ranked

applicant on the wait list would "move up" to the "funded list."

7. FHFC issued the final scores and ranking of applicants

in early May 2006. Petitioners each had a project that made the

cut for potential CWHIP funding. 2

8. Some developers challenged the scoring of applications,

and the ensuing administrative proceedings slowed the award

process. This administrative litigation ended on or around

November 6, 2008, after the parties agreed upon a settlement of

the dispute.

9. On or about November 12, 2008, FHFC issued preliminary

commitment letters offering low-interest CWHIP loans to Pasco

Partners, Legacy, Villa Capri, Prime (for its Village at

Portofino Meadows project), and MDG. Each preliminary commitment

was contingent upon:

1. Borrower and Development meeting all

requirements of Rule Chapter 67-58, FAC, and

all other applicable state and FHFC

requirements; and

2. A positive credit underwriting

recommendation; and

3. Final approval of the credit

underwriting report by the Florida Housing

Board of Directors.

10. These commitment letters constituted the necessary

approval for each of the Petitioners to move forward in credit

underwriting, which is the process whereby underwriters whom

FHFC retains under contract verify the accuracy of the

information contained in an applicant's application and examine

such materials as market studies, engineering reports, business

records, and pro forma financial statements to determine the

project's likelihood of success.

11. Once a credit underwriter completes his analysis of an

applicant's project, the underwriter submits a draft report and

recommendation to FHFC, which, in turn, forwards a copy of the

draft report and recommendation to the applicant. Both the

applicant and FHFC then have an opportunity to submit comments

regarding the draft report and recommendation to the credit

underwriter. After that, the credit underwriter revises the

draft if he is so inclined and issues a final report and

recommendation to FHFC. Upon receipt of the credit

underwriter's final report and recommendation, FHFC forwards the

document to its Board of Directors for approval.

12. Of the approximately 1,200 projects that have

undergone credit underwriting for the purpose of receiving

funding through FHFC, all but a few have received a favorable

recommendation from the underwriter and ultimately been approved

for funding. Occasionally a developer will withdraw its

application if problems arise during underwriting, but even this

is, historically speaking, a relatively uncommon outcome. Thus,

upon receiving their respective preliminary commitment letters,

Petitioners could reasonably anticipate, based on FHFC's past

performance, that their projects, in the end, would receive

CWHIP financing, notwithstanding the contingencies that remained

to be satisfied.

13. There is no persuasive evidence, however, that FHFC

promised Petitioners, as they allege, either that the credit

underwriting process would never be interrupted, or that CWHIP

financing would necessarily be available for those developers

whose projects successfully completed underwriting. While

Petitioners, respectively, expended money and time as credit

underwriting proceeded, the reasonable inference, which the

undersigned draws, is that they incurred such costs, not in

reliance upon any false promises or material misrepresentations

allegedly made by FHFC, but rather because a favorable credit

underwriting recommendation was a necessary (though not

sufficient) condition of being awarded a firm loan commitment.

14. On January 15, 2009, the Florida Legislature, meeting

in Special Session, enacted legislation designed to close a

revenue shortfall in the budget for the 2008-2009 fiscal year.

Among the cuts that the legislature made to balance the budget

was the following:

The unexpended balance of funds appropriated

by the Legislature to the Florida Housing

Finance Corporation in the amount of

$190,000,000 shall be returned to the State

treasury for deposit into the General

Revenue Fund before June 1, 2009.

In order to implement this section, and to

the maximum extent feasible, the Florida

Housing Finance Corporation shall first

reduce unexpended funds allocated by the

corporation that increase new housing

construction.

2009 Fla. Laws ch. 2009-1 § 47. Because the legislature chose

not to make targeted cuts affecting specific programs, it fell

to FHFC would to decide which individual projects would lose

funding, and which would not.

15. The legislative mandate created a constant-sum

situation concerning FHFC's budget, meaning that, regardless of

how FHFC decided to reallocate the funds which remained at its

disposal, all of the cuts to individual programs needed to total

$190 million in the aggregate. Thus, deeper cuts to Program A

would leave more money for other programs, while sparing Program

B would require greater losses for other programs. In light of

this situation, FHFC could not make a decision regarding one

program, such as CWHIP, without considering the effect of that

decision on all the other programs in FHFC's portfolio: a cut

(or not) here affected what could be done there. The

legislative de-appropriation of funds then in FHFC's hands

required, in short, that FHFC modify its entire budget to

account for the loss.

16. To enable FHFC to return $190 million to the state

treasury, the legislature directed that FHFC adopt emergency

rules pursuant to the following grant of authority:

In order to ensure that the funds

transferred by [special appropriations

legislation] are available, the Florida

Housing Finance Corporation shall adopt

emergency rules pursuant to s. 120.54,

Florida Statutes. The Legislature finds

that emergency rules adopted pursuant to

this section meet the health, safety, and

welfare requirements of s. 120.54(4),

Florida Statutes. The Legislature finds

that such emergency rulemaking power is

necessitated by the immediate danger to the

preservation of the rights and welfare of

the people and is immediately necessary in

order to implement the action of the

Legislature to address the revenue shortfall

of the 2008-2009 fiscal year. Therefore, in

adopting such emergency rules, the

corporation need not publish the facts,

reasons, and findings required by s.

120.54(4)(a)3., Florida Statutes. Emergency

rules adopted under this section are exempt

from s. 120.54(4)(c), Florida Statutes, and

shall remain in effect for 180 days.

2009 Fla. Laws ch. 2009-2 § 12.

17. The governor signed the special appropriations bills

into law on January 27, 2009. At that time, FHFC began the

process of promulgating emergency rules. FHFC also informed its

underwriters that FHFC's board would not consider any credit

underwriting reports at its March 2009 board meeting. Although

FHFC did not instruct the underwriters to stop evaluating

Petitioners' projects, the looming reductions in allocations,

coupled with the board's decision to suspend the review of

credit reports, effectively (and not surprisingly) brought

credit underwriting to a standstill.

18. Petitioners contend that FHFC deliberately intervened

in the credit underwriting process for the purpose of preventing

Petitioners from satisfying the conditions of their preliminary

commitment letters, so that their projects, lacking firm loan

commitments, would be low-hanging fruit when the time came for

picking the deals that would not receive funding due to FHFC's

obligation to return $190 million to the state treasury. The

evidence, however, does not support a finding to this effect.

The decision of FHFC's board to postpone the review of new

credit underwriting reports while emergency rules for

drastically reducing allocations were being drafted was not

intended, the undersigned infers, to prejudice Petitioners, but

to preserve the status quo ante pending the modification of

FHFC's budget in accordance with the legislative mandate.

Indeed, given that FHFC faced the imminent prospect of

involuntarily relinquishing approximately 40 percent of the

funds then available for allocation to the various programs

under FHFC's jurisdiction, it would have been imprudent to

proceed at full speed with credit underwriting for projects in

the pipeline, as if nothing had changed.

19. At its March 13, 2009, meeting, FHFC's board adopted

Emergency Rules 67ER09-1 through 67ER09-5, Florida

Administrative Code (the "Emergency Rules"), whose stated

purpose was "to establish procedures by which [FHFC would] de-

obligate the unexpended balance of funds [previously]

appropriated by the Legislature . . . ."

20. As used in the Emergency Rules, the term "unexpended"

referred, among other things, to funds previously awarded that,

"as of January 27, 2009, [had] not been previously withdrawn or

de-obligated . . . and [for which] the Applicant [did] not have

a Valid Firm Commitment and loan closing [had] not yet

occurred." See Fla. Admin. Code R. 67ER09-2(29).

21. The term "Valid Firm Commitment" was defined in the

Emergency Rules to mean:

a commitment issued by the [FHFC] to an

Applicant following the Board's approval of

the credit underwriting report for the

Applicant's proposed Development which has

been accepted by the Applicant and

subsequent to such acceptance there have

been no material, adverse changes in the

financing, condition, structure or ownership

of the Applicant or the proposed

Development, or in any information provided

to the [FHFC] or its Credit Underwriter with

respect to the Applicant or the proposed

Development.

See Fla. Admin. Code R. 67ER09-2(33).

22. There is no dispute concerning that fact that, as of

January 27, 2009, none of the Petitioners had received a valid

firm commitment or closed a loan transaction. There is,

accordingly, no dispute regarding the fact that the funds which

FHFC had committed preliminarily to lend Petitioners in

connection with their respective developments constituted

"unexpended" funds under the pertinent (and undisputed)

provisions of the Emergency Rules, which were quoted above.

23. In the Emergency Rules, FHFC set forth its decisions

regarding the reallocation of funds at its disposal. Pertinent

to this case are the following provisions:

To facilitate the transfer and return of the

appropriated funding, as required by [the

special appropriations bills], the [FHFC]

shall:

* * *

(5) Return $190,000,000 to the Treasury of

the State of Florida, as required by [law].

. . . The [FHFC] shall de-obligate

Unexpended Funding from the following

Corporation programs, in the following

order, until such dollar amount is reached:

a) All Developments awarded CWHIP

Program funding, except for [a few projects

not at issue here.]

* * *

See Fla. Admin. Code R. 67ER09-3.

24. On April 24, 2009, FHFC gave written notice to each of

the Petitioners that FHFC was "de-obligating" itself from the

preliminary commitments that had been made concerning their

respective CWHIP developments.

25. On or about June 1, 2009, FHFC returned the de-

appropriated funds, a sum of $190 million, to the state

treasury. As a result of the required modification of FHFC's

budget, 47 deals lost funding, including 16 CWHIP developments

to which $83.6 million had been preliminarily committed for new

housing construction.

CONCLUSIONS OF LAW

26. Petitioners seek a final order directing that their

projects be funded or, alternatively, that FHFC reconsider,

pursuant to a to different methodology from that set forth in

the Emergency Rules, whether to deprive the CWHIP program of

funds that were preliminarily committed to it——directing, in

other words, that FHFC modify its budget (again). Such a remedy

is not available under the Florida Administrative Procedure Act

("APA"). For the reasons that follow, FHFC's budgetary

decisions do not constitute "agency action." The Division of

Administrative Hearings ("DOAH") therefore lacks subject matter

jurisdiction in this proceeding.

27. The rationale behind the foregoing conclusion starts

with some fundamental principles of administrative law. A

formal administrative hearing must be offered when an agency

intends to determine the substantial interests of a party. See

§ 120.569(1), Fla. Stat. Such a proceeding concludes when the

agency issues a "final order." See § 120.57(1)(l), Fla. Stat.

The final order constitutes final "agency action" and is

judicially reviewable. See § 120.68(1), Fla. Stat.

28. The term "agency action" is defined in the APA to mean

"the whole or part of a rule or order, or the equivalent

[thereof]." § 120.52(2), Fla. Stat. That which is neither a

rule nor an order is, accordingly, something other than an

agency action.

29. As used in the APA, the term "final order" means

a written final decision which results from

a proceeding under s. 120.56, s.120.565,

s. 120.569, s. 120.57, s. 120.573, or

s. 120.574 which is not a rule, and which is

not excepted from the definition of a rule ,

and which has been filed with the agency

clerk, and includes final agency actions

which are affirmative, negative, injunctive,

or declaratory in form.

§ 120.52(7), Fla. Stat. (emphasis added). Thus, a rule is not

an order, and neither is a decision that falls within an

exception to the definition of a rule. A decision that is

categorically excluded from the definition of a rule is, for

that very reason, neither a rule nor an order 3 and thus is not an

agency action under the APA (unlike a rule, which is). Such a

decision will hereafter be called an exempt decision , which, to

be clear, is not a term used in the APA.

30. Section 120.52(16), Florida Statutes, provides as

follows:

"Rule" means each agency statement of

general applicability that implements,

interprets, or prescribes law or policy or

describes the procedure or practice

requirements of an agency and includes any

form which imposes any requirement or

solicits any information not specifically

required by statute or by an existing rule.

The term also includes the amendment or

repeal of a rule. The term does not

include:

(a) Internal management memoranda which do

not affect either the private interests of

any person or any plan or procedure

important to the public and which have no

application outside the agency issuing the

memorandum.

(b) Legal memoranda or opinions issued to

an agency by the Attorney General or agency

legal opinions prior to their use in

connection with an agency action.

(c) The preparation or modification of:

1. Agency budgets.

2. Statements, memoranda, or instructions

to state agencies issued by the Chief

Financial Officer or Comptroller as chief

fiscal officer of the state and relating or

pertaining to claims for payment submitted

by state agencies to the Chief Financial

Officer or Comptroller.

3. Contractual provisions reached as a

result of collective bargaining.

4. Memoranda issued by the Executive Office

of the Governor relating to information

resources management.

(Emphasis added.) Under the plain language of this statute, a

decision respecting the preparation or modification of an

agency's budget falls within a categorical exception to the

definition of the term "rule." Such a decision therefore is an

exempt decision.

31. The purpose of a proceeding under Sections 120.569 and

120.57 is to "formulate final agency action, not to review

action taken earlier and preliminarily." McDonald v. Department

of Banking & Finance , 346 So. 2d 569, 584 (Fla. 1st DCA 1977).

Final agency action ultimately must take the form of a final

order. Mitchell v. Leon County School Bd. , 591 So. 2d 1032,

1033 (Fla. 1st DCA 1991)("[A]n agency decision which determines

the substantial interests of a party must be made through the

provisions of section 120.57, Florida Statutes, and culminate in

a final order."); McDonald , 346 So. 2d at 577 ("[A]ll agency

action, on appropriate challenge, will mature into an order

impressed with characteristics of the APA's Section 120.57.").

Because an exempt decision never ripens into a final order,

there is no administrative remedy to be had under the APA by a

person who claims that the exempt decision determines his

substantial interests.

32. In this instance, the decisions that FHFC made in

response to the de-appropriation of $190 million from its funds,

including the decisions relating to the de-obligation of

Petitioners' projects, involved the modification of the agency's

budget. Petitioners do not have an administrative remedy under

Sections 120.569 and 120.57 concerning these exempt decisions:

there is simply no agency action to be formulated here. Cf.

Hill v. Monroe County , 581 So. 2d 225, 226 (Fla. 3d DCA

1991)(The APA "only applies where a challenge is made to a State

agency action."). 4

33. The conclusion that FHFC's budgetary decisions are not

subject to quasi-judicial adjudication is consistent with, if

not compelled by, the holding in Palm Beach County Classroom

Teachers Ass'n v. School Board of Palm Beach County , 406 So. 2d

1208 (Fla. 4th DCA 1981). In that case, the legislature

recently had appropriated to various county school boards

additional funds pursuant to a Supplemental Appropriations Act

("SAA"). A proviso in the SAA instructed that priority was to

be given, when deciding how to spend the funds, to increasing

salaries for teachers. No doubt encouraged by this, the

teachers' union in one county sought to renegotiate teachers'

pay with the local school board. The school board, however,

refused to bargain. The union then requested a hearing under

Section 120.57 to determine the priority for allocation of the

funds appropriated under the SAA. The school board entered a

final order denying the union's request for hearing. Id. at

1209.

34. The court affirmed the order. Its decision comprised

two pertinent sentences:

[W]e hold that the allocation and

disbursement of the funds received through

the SAA involves the modification of the

agency's budget which entails neither rule

making nor an order within the meaning of

those terms as set forth in Section 120.52,

Florida Statutes (1980). There was,

therefore, no necessity for the Board to

provide [the union] with a hearing required

by Section 120.57.

Id. at 1210.

35. This case is, in some respects, the mirror image of

Classroom Teachers . Here, the legislative act that got the ball

rolling was a special de -appropriation, rather than a

supplemental appropriation as in Classroom Teachers , and

Petitioners seek to establish their priority in the allocation

of the limited funds remaining to the agency, whereas the union

had sought priority in the allocation of additional funds

recently received by the agency. In each case, however, the

agency decision that was alleged to be determinative of the

substantial interests of persons who sought to obtain a

financial benefit from the agency entailed the allocation and

disbursement of funds committed to the agency for expenditure.

In each case, the subject decision necessarily involved the

modification of the agency's budget——a decision that was neither

a rule nor an order in APA terms. In this case, therefore, just

as in Classroom Teachers , Sections 120.569 and 120.57, Florida

Statutes, do not afford a remedy.

36. Because the school board had denied the union's

request for hearing, the court in Classroom Teachers needed only

to decide whether the school board was required to provide a

Section 120.57 hearing. In contrast, FHFC granted Petitioners'

requests for hearing. Thus, it is necessary here to decide

whether FHFC is authorized to provide Petitioners a Section

120.57 hearing. While the Classroom Teachers court stopped

short of ruling explicitly that the school board was without

jurisdiction to afford a hearing, such a conclusion, as will be

explained, follows logically from the court's ruling that there

was no necessity for the school board to provide the hearing

that Section 120.57 requires when an agency determines a party's

substantial interests.

37. In thinking about where Classroom Teachers logically

leads, a good place to start is with this observation: the

school board was not obligated to provide a Section 120.57

hearing because modifying its budget did not entail the issuance

of a final order, which means that it was likewise under no

duty——as agencies determining substantial interests pursuant to

the APA otherwise are even when a hearing is not required ——to

take final agency action in the form of a final order. See

United Water Fla., Inc. v. Public Serv. Comm'n , 728 So. 2d 1250,

1250-51 (Fla. 1st DCA 1999)(agency must issue final order to

effectuate agency action determining substantial interests, even

where no hearing was requested). Necessarily implicit in the

court's holding that the school board did not need to give the

union a Section 120.57 hearing, therefore, was the notion that

the board's non-rule, non-order determinations regarding the

allocation and disbursement of funds were already final and

effective ——and that they had attained such finality without the

board's ever having had to expose them to an adversarial

adjudicative process. In other words, the school board had the

power to take effective, final action on its budget, regardless

of whether it had offered anyone whose substantial interests

might be determined by the budget an opportunity for a hearing

under Section 120.57.

38. This would not have been true if the school board were

determining, in a quasi-judicial capacity, the substantial

interests of persons having a stake in the allocation of the

school board's funds. See Mitchell v. Leon County School

Bd. , 591 So. 2d 1032, 1033 (Fla. 1st DCA 1991)(student whom

school board had voted to expel would not be expelled, and thus

could still attend classes, until school board properly rendered

a final order). About such determinations, the law is that

"[u]ntil proceedings are had satisfying section 120.57, or an

opportunity for them is clearly offered and waived, there can be

no agency action affecting the substantial interests of a

person." Florida League of Cities, Inc. v. State of Florida,

Administration Commission , 586 So. 2d 397, 413 (Fla. 1st DCA

1991). Indeed, an agency must give any person whose substantial

interests are being determined a clear point of entry into the

administrative process, and thereafter provide such person a

Section 120.57 hearing if he timely requests one, or else "the

agency is without power to act." Id. at 415; Capeletti Bros.,

Inc. v. State, Department of Transportation , 362 So. 2d 346, 349

(Fla. 1st DCA 1978), cert . den ., State, Department of

Transportation v. Capeletti Bros., Inc. , 368 So. 2d 1374 (Fla.

1979). Thus, because in Classroom Teachers the school board was

found to be not required to provide a hearing——and therefore

also under no duty to give a clear point of entry——the

conclusion is inescapable that the power being exercised there

was not quasi-judicial in nature.

39. This conclusion is implicitly behind the decision in

Classroom Teachers , and is, in any event, amply supported by the

plain language of the APA. By excluding decisions involving the

preparation or modification of agency budgets from the

definitions of the terms "rule" and "order" and defining "agency

action" as rules and orders (and their respective equivalents) 5 ,

the legislature deliberately removed such decisions from the

quasi-judicial administrative processes established in the APA.

Plainly, the legislature intended that budgetary decisions not

be the subject of quasi-judicial adjudication under Sections

120.569 and 120.57, Florida Statutes. Based on the statutory

language and the Classroom Teachers decision, the undersigned

concludes that an agency, in making decisions involving its

budget, is authorized to act in a quasi-legislative capacity, 6

rendering determinations that not only (a) have immediate

finality, i.e. are not preceded by preliminary or proposed

agency action; but also (b) are not judicially reviewable

(unlike final agency action) pursuant to Section 120.68, Florida

Statutes. 7

40. But, one might still ask, could not an agency afford a

Section 120.57 hearing to a disappointed seeker of the agency's

favor in regard to the disbursement of funds, not because a

hearing was necessary , and notwithstanding the absence of

"agency action," but simply because the agency felt that an

adjudicative process would be beneficial? The answer, the

undersigned concludes, is no . This is because an agency, being

a creature of statute, can do only what the legislature has

authorized it to do. E.g. , Ocampo v. Dep't of Health , 806 So.

2d 633, 634 (Fla. 1st DCA 2002). The legislature has authorized

and required agencies to conduct Section 120.57 proceedings when

they exercise quasi-judicial power in determining substantial

interests. 8 The legislature has not required or authorized

agencies to conduct Section 120.57 proceedings in connection

with the exercise of other powers. In removing budgetary

decisions from the APA's adjudicative processes, the legislature

gave agencies greater freedom to act in a quasi-legislative

capacity in this particular area; at the same time, however, the

legislature took away the agencies' power to adjudicate

budgetary matters. 9 Lacking such quasi-judicial authority over

this particular subject, an agency cannot voluntarily accede to

administrative litigation, however laudable its intentions,

where the dispute stems from the preparation or modification of

its budget. 10

41. Here is another way to look at this issue: If an

agency, on its own authority, were to provide a Section 120.57

hearing in connection with a decision that is not within the

range of agency actions subject to administrative adjudication

under the APA, then that agency would be expanding its quasi-

judicial jurisdiction and creating a new administrative remedy.

This is impermissible, as the Florida Supreme Court held in

Redford v. Department of Revenue , 478 So. 2d 808 (Fla. 1985).

There, a county property appraisal adjustment board, acting on

its own volition, held hearings to determine whether certain

properties were entitled to tax exemptions, after the appraiser

had denied such exemptions. Id. at 810. Following the

hearings, the board determined, contrary to the appraiser's

decisions, that the properties were exempt. Id.

42. The Supreme Court held that the board had acted

without authority. It explained:

Under [one statute], the board may hear

appeals from taxpayers on exemptions which

the appraiser has denied and, under [another

statute], may review on its own volition or

the motion of the appraiser any exemptions

which have been granted. However, there is

no provision in law for the board on its own

volition to review decisions of the

appraiser not to grant exemptions.

Id. The board, in sum, did not have jurisdiction to exercise

quasi-judicial power over an appraiser's decision to deny an

exemption unless the taxpayer complained, which had not happened

in that case. By electing to adjudicate a matter over which the

law gave the board no authority, the board unlawfully had

enlarged its own jurisdiction. Id.

43. For the reasons set forth above, the undersigned

concludes that FHFC does not have jurisdiction to adjudicate the

instant dispute, which is not hearable in a Section 120.57

proceeding, and therefore DOAH lacks jurisdiction as well. See

South County Mental Health Center v. Department of Health &

Rehabilitative Services , DOAH Case No. 89-6088, 1990 Fla. Div.

Adm. Hear. LEXIS 6252, *23 (Recommended Order Mar. 28,

1990)(DOAH "lacks jurisdiction over this dispute. The

preparation, modification or allocation of agency budgets are

[sic ] not reviewable in Section 120.57(1) substantial interests

proceedings. The legislative definitions of the terms 'rule'

and 'order', when read together, exempt the budgeting issues

[presented here] from administrative challenge.").

44. In reaching the foregoing conclusion, the undersigned

has not forgotten that the legislature empowered and directed

FHFC to promulgate emergency rules as a means of ensuring that

the de-appropriated funds would be available for return to the

state treasury, and that FHFC complied, adopting the Emergency

Rules. This factual wrinkle distinguishes the case at hand from

Classroom Teachers and South County Mental Health Center . It

does not, however, make a difference.

45. The legislative directive to make emergency rules had

the effect of requiring FHFC to adopt in rule form decisions

respecting the modification of its budget that otherwise would

not have been the proper subject of a rule. See §

120.52(16)(c), Fla. Stat. Thus, the Emergency Rules, which

involved or governed the preparation or modification of an

agency's budget, were not "excepted" from the definition of a

rule only because of the specific enactment authorizing and

requiring their adoption; the Emergency Rules were within the

definition of a rule, however, only as far as they went.

46. In creating this singular exception to the exception

for budgetary decisions that otherwise would have excluded

FHFC's budgetary decisions from the definition of a rule, the

substantially affected by the emergency rules an administrative

remedy, namely a rule challenge. See § 120.56(5), Fla. Stat. 11

A rule challenge was, however, the only administrative remedy

available to persons whose interests were affected by the

modification of FHFC's budget in consequence of the $190 million

de-appropriation. 12

47. This is because, to the extent FHFC's decisions

concerning the modification of its budget were set forth in the

Emergency Rules, such decisions were, obviously, rules and thus

not orders, as rules and orders are mutually exclusive items.

See § 120.52(7), Fla. Stat. The administrative remedies

associated with rules, on the one hand, and orders, on the

other, are different. A "person substantially affected by a

rule or a proposed rule may seek an administrative determination

of the invalidity of the rule on the ground that the rule is an

invalid exercise of delegated legislative authority." See §

120.56(1)(a), Fla. Stat. In contrast, proceedings under

Sections 120.569 and 120.57 are available when an agency, by

order, determines a party's substantial interests. The object

of the proceeding is not to determine the validity of a rule, as

in a proceeding brought under Section 120.56, but to adjudicate

that party's substantial interests, based on the application of

law to a specific set of facts.

48. Rule challenges, in short, are not proceedings to

determine substantial interests under Sections 120.569 and

120.57, Florida Statutes, although they are conducted in like

fashion, and substantial interests proceedings are not rule

challenges. There is no question that a person substantially

affected by the Emergency Rules could have sought an

administrative determination that the Emergency Rules, or some

provisions thereof, were invalid. That he could bring such a

rule challenge, however, does not mean that he was also entitled

to have his substantial interests determined in a Section 120.57

proceeding.

49. In this instance, to the extent FHFC's decisions

concerning the modification of its budget were not set forth in

the Emergency Rules, or were made pursuant to the rules, such

decisions were not rules (because they fell within an exception

to the definition of a rule), and they were not orders either

(because they fell within an exception to the definition of a

final order). Nothing in the legislation authorizing the

adoption of the Emergency Rules suggests that the legislature

enabled (or intended for) FHFC to issue a final order on its

budget or on any part thereof.

50. In sum, to the extent FHFC's budgetary decisions were

expressed in the Emergency Rules, such decisions constituted an

exercise of quasi-legislative authority subject to

administrative review only pursuant to Section 120.56, Florida

Statutes. To the extent FHFC's budgetary decisions were not

expressed in the Emergency Rules, such decisions constitute

exempt decisions and do not give rise to proceedings under

Sections 120.569 and 120.57, Florida Statutes, for the reasons

discussed at length above.

51. Although it is arguably improper to do so in light of

the conclusion that DOAH has no jurisdiction over this

proceeding, the undersigned will briefly summarize the

conclusions he would have reached on the merits of the principal

issues, not as alternative grounds for the disposition of this

case, but out of respect for parties, who might reasonably be

interested to know how the undersigned responded to their

respective arguments, which were ably presented on all sides.

52. In challenging FHFC's decisions to eliminate funding

for their CWHIP projects, Petitioners have not alleged that FHFC

failed to follow the Emergency Rules or misapplied them based

on, for example, a misunderstanding about the material facts.

Petitioners effectively concede, in other words, that the

Emergency Rules required FHFC to de-obligate itself from

offering financing for their CWHIP projects. Petitioners'

position is that FHFC cannot rely upon the Emergency Rules in

taking final agency action in this proceeding because the

Emergency Rules have expired.

53. The limited lifespan of the Emergency Rules does

indeed provide room for argument concerning the applicable law.

Under the enabling statute, the Emergency Rules remained in

effect for 180 days——from March 13, 2009, until September 9,

2009. 13 For purposes of this case, then, time can be divided

into three relevant periods: the period before the Emergency

Rules came into being ("Period 1"); the period during which the

Emergency Rules were effective ("Period 2"); and the period

after the Emergency Rules expired ("Period 3"). Events

underlying the instant litigation plainly took place in Periods

1 and 2 and arguably occurred (or might occur later) during

Period 3.

54. Given this state of affairs, the question which arises

is: What event triggers the reallocation procedures under the

Emergency Rules? Cf. Hemmerle v. Bramalea, Inc. , 574 So. 2d

203, 204 (Fla. 4th DCA 1989)(operative event which triggers

statutory remedy occurs when respective rights and duties of the

parties are aligned according to the statutory requirements).

If the operative event were within Period 2, then the Emergency

Rules would govern FHFC's decision not to fund Petitioners'

projects, even though such rules have since expired. 14 On the

other hand, if the operative event were within Period 1 or

Period 3, then the Emergency Rules would be inapplicable because

they can neither be given retrospective application (to an

operative event in Period 1) nor be applied beyond their

expiration date (to an operative event in Period 3).

55. Petitioners maintain that final agency action is the

operative event; that is, that the law in effect at the time the

final order is entered will control the decision to de-obligate

Petitioners' projects. Because final agency action presumably

would take place in Period 3, Petitioners argue that the

Emergency Rules, having expired, cannot be applicable, and that,

consequently, FHFC must look elsewhere for authority to de-

obligate the CWHIP projects at issue.

56. FHFC agrees that Petitioners have a point and even

concedes that Petitioners would be correct in most cases——just

not in this one, which FHFC believes is "unique," "unusual," and

"unprecedented" and merits special consideration. FHFC contends

that the operative event occurred on or about April 24, 2009, in

Period 2, when FHFC notified Petitioners of its preliminary or

intended decisions to de-obligate their respective projects,

giving each of the Petitioners a clear point of entry into

formal administrative proceedings. If the putative preliminary

agency actions constituted the operative event, then the

Emergency Rules would apply here.

57. The undersigned invited the parties to explore, in

their Proposed Recommended Orders, another possibility, namely

that the operative event was FHFC's return of $190 million to

the state treasury, which occurred on June 1, 2009, during

Period 2. The parties unanimously rejected this alternative on

the grounds that FHFC's return of the money in obedience to the

legislature's command was not an "agency action" uniquely

affecting Petitioners' substantial interests, but rather a

ministerial act unrelated to a particular person or entity.

58. Though seemingly exclusive, the three alternatives,

ironically, merge to inform what the undersigned believes is the

correct view of the operative event. FHFC is correct that this

case is unusual, though the undersigned would not call it unique

or unprecedented. The case is unusual because the dispute

arises from agency decisions that are exempt from the APA's

adjudicative processes. Thus, as in Classroom Teachers and

South County Mental Health Center , the agency here was

authorized to take effective, final action on its budget without

giving a clear point of entry or providing a Section 120.57

hearing to persons whose substantial interests would be

determined by the constituent decisions regarding which programs

to fund, and which to cut.

59. Because FHFC's decisions comprising the modification

of its budget were final when taken, the law governing those

decisions was the law in effect when they were made. This is

consistent with Petitioners' position (with which FHFC is in

general agreement) that the applicable law ordinarily should be

the law in effect at the time of the final decision. Although

Petitioners took this position on the mistaken premise that the

decisions would not be final until the entry of a final order,

the fundamental principle involved is correct. See Agency for

Health Care Administration v. Mount Sinai Medical Center of

Greater Miami , 690 So. 2d 689, 692-93 (Fla. 1st DCA

1997)(general rule is that an agency deciding how to allocate,

between competing applicants, a pool of limited resources at its

disposal must apply the law in effect at time of final

decision).

60. As far as when, exactly, FHFC's budget was modified,

that is arguably open to interpretation. The undersigned,

however, is convinced, based on the evidence, that FHFC did not

modify its budget before the Emergency Rules went into effect,

and that the modified budget was in place no later than June 1,

2009, when FHFC returned the de-appropriated funds to the state

treasury. No matter what, therefore, the operative event

occurred during Period 2, when the Emergency Rules were in

effect.

61. Consequently, the undersigned would conclude, if DOAH

had jurisdiction in this matter, that the Emergency Rules

controlled FHFC's constituent decisions regarding the

modification of its budget in response to the de-appropriation

for fiscal year 2008-2009. Because FHFC acted in accordance

with the Emergency Rules in de-obligating Petitioners' projects,

the undersigned would conclude that FHFC did not err or

otherwise act contrary to law in making the decisions under

challenge. None of the evidence presented, moreover, would

persuade the undersigned to recommend that FHFC revisit its

budget and reconsider whether to restore funding to the CWHIP

projects in question.

62. The remaining issues can be dealt with in summary

fashion. Petitioners assert that FHFC is equitably estopped

from de-obligating itself from the CWHIP loans for which

Petitioners received preliminary commitment letters. This is a

difficult claim to establish. "As a general rule, equitable

estoppel will be applied against the state only in rare

instances and under exceptional circumstances." State Dep't of

Revenue v. Anderson , 403 So. 2d 397, 400 (Fla. 1981). As one

court explained,

[t]he cases in which this doctrine [of

equitable estoppel] has been applied against

a government agency involve potentially

severe economic consequences to the person

who relied on a government agent's

misstatement of fact, or situations in which

the conduct of the government was unbearably

egregious -- "a classic example of

bureaucratic ineptitude and indifference"

coupled with a supremely adverse affect on

an innocent citizen.

Sutron Corp. v. Lake County Water Auth. , 870 So. 2d 930, 933-34

(Fla. 5th DCA 2004)(footnotes omitted).

63. In addition to exceptional circumstances, the

following elements must be proved to estop the state from

contradicting a prior position:

1) a representation as to a material fact

that is contrary to a later-asserted

position; 2) reliance on that

representation; and 3) a change in position

detrimental to the party claiming estoppel,

caused by the representation and reliance

thereon.

Anderson , 403 So. 2d at 400.

64. The undersigned would conclude that Petitioners failed

to demonstrate that FHFC ever made any representation of

material fact that is contrary to its current position in regard

to the de-obligation of the CWHIP projects. He would, in fact,

go farther: FHFC never changed its position regarding these

projects. Rather, the legislature changed its mind regarding

the amount of revenue FHFC should have at its disposal. Faced

with an unforeseen change in material circumstances, which was

beyond its control, FHFC did the best it could both to comply

with the legislature's directives and to adapt to the new fiscal

reality of a depleted budget.

65. There is, moreover, nothing exceptional about this

situation. To the contrary, what has happened here is

increasingly commonplace as governments, including the State of

Florida, struggle with the economic downturn that was underway

at the time the legislature de-appropriated $190 million from

FHFC and subsists as of this writing. While the de-obligation

no doubt has caused Petitioners economic hardship, they join the

swelling ranks of those whom the state, due to the declining

balance in the fisc, can no longer afford to pay as before.

66. It would be concluded, therefore, that FHFC is not

estopped from de-obligating Petitioners' projects.

67. Finally, Petitioners allege that FHFC has breached its

contracts with them. It is axiomatic that the only subjects

which "an agency may hear and determine [are those] within the

framework of the powers conferred upon the agency." Vincent J.

Fasano, Inc. v. School Bd. of Palm Beach, County, Fla. , 436 So.

2d 201, 203 (Fla. 4th DCA 1983). In Fasano , the court,

observing that contractual disputes are traditionally resolved

in actions at law, held that a claim for "breach of contract is

ordinarily a matter for judicial rather than administrative or

quasi-judicial consideration." Id. at 202-03. The court found

further that the agency in question, a district school board,

possessed no authority to adjudicate claims arising under

contracts for goods or services to which it was a party. Id. at

203. Thus, the court held that the final order under review——in

which the school board had refused to award damages to a

contractor seeking recovery on a construction contract——was a

"nullity" and "of no force and effect," leaving the contractor

"at liberty to pursue his cause of action in the appropriate

judicial forum." Id. ; cf. Fleischman v. Department of

Professional Regulation , 441 So. 2d 1121, 1122-23 (Fla. 3d DCA

1983)("It is well-settled . . . that, absent clear legislative

authorization to the contrary, violations of mere contractual

rights are concerns only of the courts . . . .").

68. The undersigned would conclude that Petitioners'

claims for breach of contract must be brought in the appropriate

judicial forum; they are not cognizable here.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that FHFC enter a Final Order dismissing

these consolidated cases for lack of jurisdiction.

DONE AND ENTERED this 18th day of February, 2010, 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 18th day of February, 2010.

ENDNOTES

1 / In this context, a "public-private" partnership is a business

venture in which a private sector entity, such as a developer,

joins forces with a public body such as a city, county, or

school board, for purposes of planning, promoting, and

constructing an affordable housing project.

2 / Two of Prime's proposed developments were not given

preliminary commitments but instead were placed on the wait

list, namely The Reserve at the Falls of Portofino and Park

Royale Residences at Portofino Springs.

3 / The definitional requirement that a decision, to be an order,

must be "not excepted from the definition of a rule" means that

the exceptions to the definition of a rule are also exceptions

to the definition of a final order.

4 / To be sure, FHFC's modification of its budget was an action

of the agency; it was not, however, "agency action" as the APA

defines the term.

5 / Because budgetary decisions are expressly excluded both from

the definition of a rule and from the definition of an order;

and because, therefore, such decisions are, by definition, not

rules or orders, the undersigned concludes that a decision

involving the preparation or modification of an agency's budget

cannot be considered the "equivalent" of a rule or order, for

that would seriously undermine, if not nullify, the clear

statutory exception.

6 / The power to appropriate state funds is quintessentially a

legislative function, as is the power to reduce appropriations.

Chiles v. Children , 589 So. 2d 260, 265 (Fla. 1991).

7 / If, in Classroom Teachers , the school board's budget had

constituted final agency action, the union, which claimed to be

adversely affected thereby, would have been entitled to take an

appeal from the agency's budget pursuant to § 120.68(1), Fla.

Stat. Had the court believed that the agency's budget was

directly appealable as final agency action, it likely (though

not necessarily) would have mentioned that option; notably, it

did not. In any event, the undersigned wants to make clear he

is not suggesting that judicial review of an exempt decision

would never be available. There are, of course, other vehicles

besides § 120.68, Fla. Stat., for obtaining appellate review of

state action, e.g. common law writs. Moreover, because there

are no administrative remedies to exhaust, a party aggrieved by

an exempt decision could, the undersigned supposes, immediately

bring a civil complaint in a court of competent jurisdiction,

assuming such person were able to state a cause of action.

8 / The legislature also has authorized agencies to issue

declaratory statements, a function which involves the exercise

of quasi-judicial power, pursuant to § 120.565, Fla. Stat.

9 / It is interesting to note that with regard to rules, the

making of which, like preparing or modifying a budget directing

the disbursement of public funds, is a quasi-legislative

function, the legislature likewise took away the agencies' power

of quasi-judicial adjudication, giving DOAH exclusive

administrative jurisdiction to determine the validity of rules.

See generally § 120.56, Fla. Stat. The legislature has not,

however, similarly invested DOAH with jurisdiction to adjudicate

disputes arising out of the preparation or modification of an

agency's budget.

10 / Not to belabor the point, but the legislature obviously had

its reasons for choosing to place decisions involving agency

budgets outside of the APA's adjudicative processes. It is easy

to imagine at least some of those reasons. For example, if

every person whose substantial interests were determined by the

level of funding made available in an agency's budget for one

purpose or another was entitled to a Section 120.57 hearing,

then the preparation of agency budgets likely would soon become

bogged down in a quagmire of administrative litigation; ever

present would be the threat of an adverse order tugging a thread

from a carefully crafted budget comprising numerous interwoven

decisions, causing the whole thing to unravel. Whatever

prompted the legislature to act as it did, however, the bottom

line is that an agency is not free to disregard the legislative

intent that budgetary matters not be subject to administrative

adjudication, even if, in a particular case, the agency believes

adjudication would do more good than harm; the statutory scheme

must be followed in all cases.

11 / Several of the Petitioners did, in fact, attempt to

challenge the Emergency Rules, initiating DOAH Case Nos. 09-

5115RX, 09-5116RX, 09-5117RX, and 09-5118RX. They waited too

long to avail themselves of this remedy, however, filing their

petitions with DOAH on September 18, 2009, by which time the

Emergency Rules had expired (or were about to expire). Once the

Emergency Rules ceased to exist by operation of law, the rule

challenge proceedings became moot, and DOAH lost jurisdiction. See

Department of Revenue v. Sheraton Bal Harbour Ass'n, Ltd. , 864 So.

2d 454 (Fla. 1st DCA 2003)(DOAH does not have jurisdiction to hear

a rule challenge to a rule that no longer exists). The rule

challenges were dismissed on that basis. The final orders

dismissing the rule challenge petitions were appealed; as of this

writing, the appeals remain pending.

12 / This remedy was, moreover, available only during the

existence of the Emergency Rules, which rules lasted just 180

days; then the remedy was gone. As a practical matter, given

that a challenge to an emergency rule takes about one month from

the filing of the petition to the issuance of the final order;

and because rules can be invalidated only on a prospective basis,

see , e.g. , State Bd. of Optometry v. Florida Soc. of Ophthalmology ,

538 So. 2d 878, 889 (Fla. 1st DCA 1989); and since FHFC needed to

finalize its modified budget no later than June 1, 2009, when the

money was due back in the state treasury; and recognizing that the

Emergency Rules took effect on or about March 16, 2009, the actual

window of opportunity for filing a challenge to the Emergency Rules

was open for only about 30 days.

13 / The parties disagree about the exact starting and ending

dates of the Emergency Rules' period of operation, but a few

days' difference at either end of the range does not affect the

analysis or the outcome of this case.

14 / Put another way, if the operative event occurred during the

period when the Emergency Rules were in effect, then applying

such rules in the instant case would not contravene the

prohibition against retroactive rules. See § 120.54(1)(f), Fla.

Stat.

COPIES FURNISHED :

Dan R. Stengle, Esquire

Katie S. Buchanan, Esquire

Hopping Green & Sams, P.A.

119 South Monroe Street, Suite 300

Tallahassee, Florida 32301

Michael P. Donaldson, Esquire

Daniel Hernandez, Esquire

Carlton Fields, P.A.

215 South Monroe Street, Suite 500

Tallahassee, Florida 32301

Hugh R. Brown, Deputy General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301-1329

Wellington H. Meffert, II, General Counsel

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301-1329

Della Harrell, Corporation Clerk

Florida Housing Finance Corporation

227 North Bronough Street, Suite 5000

Tallahassee, Florida 32301-1329

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.