98-003063 Division Of Pari-Mutuel Wagering vs. Florida Gaming Centers, Inc., D/B/A Tampa Jai Alai Status: Closed Recommended Order on Thursday, January 28, 1999.

Summary: Department is not authorized to assess and collect interest from person who fails to remit funds representing the value of outs tickets within the time prescribed by statute.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, DIVISION )

OF PARI-MUTUEL WAGERING, )

)

Petitioner, )

)

vs. ) Case No. 98-3063

)

FLORIDA GAMING CENTERS, INC., )

d/b/a TAMPA JAI ALAI, )

)

Respondent. )

___________________________________)

RECOMMENDED ORDER

Pursuant to the stipulation of the parties filed on

October 16, 1998, this matter was submitted to the Division of

Administrative Hearings and its duly designated Administrative

Law Judge, Carolyn S. Holifield, on the Stipulated Facts without

further evidentiary hearing.

APPEARANCES

For Petitioner: Eric H. Miller

Chief Assistant General Counsel

Department of Business

and Professional Regulation

Division of Pari-Mutuel Wagering

1940 North Monroe Street

Tallahassee, Florida 32399

For Respondent: William P. Cagney, III, Esquire

3400 Financial Center

200 South Biscayne Boulevard

Miami, Florida 33131

STATEMENT OF THE ISSUE

Whether Petitioner, the Department of Business and

Professional Regulation, Division of Pari-Mutuel Wagering, is

authorized to charge and collect interest from Respondent,

Florida Gaming Centers, Inc., on the unpaid value of the outsbook

for the 1995-1996 meet from August 29, 1997, the date payment of

the value of the outsbook was due, to September 8, 1998, the date

payment was received by Petitioner.

PRELIMINARY STATEMENT

On or about June 2, 1998, Petitioner, the Department of

Business and Professional Regulation, Division of Pari-Mutuel

Wagering (Department), filed an Administrative Complaint against

Respondent, Florida Gaming Centers, Inc., d/b/a Tampa Jai Alai

(Respondent). The Administrative Complaint alleged that

Respondent failed to timely submit the value of its outsbook to

the Department and notified Respondent of its intention to impose

an "appropriate penalty of revocation or suspension of the permit

or license, recovery of the unpaid outs balance and attributable

interest, collection of civil penalties, and such other

additional penalties as may be provided by law or rule of the

Division." Respondent timely challenged the allegations and

requested a formal hearing. On July 14, 1998, the matter was

forwarded to the Division of Administrative Hearings for

assignment of an Administrative Law Judge to conduct the final

hearing.

Prior to the hearing, the parties filed a Prehearing

Stipulation, Joint Request to Submit Case on Stipulated Facts,

and Request to Cancel Scheduled Hearing. Pursuant to the Order

of the Administrative Law Judge dated October 20, 1998, the

scheduled hearing was canceled and the Joint Request to Submit

the Case on Stipulated Facts was granted. The Order further

directed the parties to file proposed recommended orders no later

than November 6, 1998. The parties requested and were given

until November 16, 1998, to file responses to the legal arguments

raised in the opponent's proposed recommended order. Both the

Department and Respondent submitted proposed recommended orders

and written legal arguments. Thereafter, each party filed a

response to the opposing party's legal argument.

FINDINGS OF FACT

1. At all times relevant hereto, the Respondent held a

permit to conduct jai alai pari-mutuel wagering, under License

No. 2909-D Amended, issued by the Department.

2. Between July 1, 1995, and June 30, 1996, inclusive,

Respondent held jai alai games for the purpose of conducting

pari-mutuel wagering on those games. Respondent's meet for the

relevant time period ended on June 30, 1996.

3. One year and sixty days after the end of the State of

Florida's (State) fiscal year of June 30, 1996, any "out" tickets

that remained uncashed escheated to the State pursuant to Section

550.1645(2), Florida Statutes. Once these tickets or the value

thereof escheated to the State, Respondent was required to pay

the value of such tickets, as reflected on its outsbook, to the

Department no later than August 29, 1997.

4. Pursuant to the outsbook prepared by Respondent, the

value of the outs for the 1995-1996 meet was $108,221.20.

Nonetheless, Respondent failed to submit to the Department the

value of the balance of the outsbook within the prescribed time

frame and instead held these funds.

5. On June 2, 1998, the Department served an

Administrative Complaint on Respondent, alleging that Respondent

had failed to timely submit the value of the outsbook to

Petitioner.

6. By letter dated September 4, 1998, Respondent submitted

to the Department a check for $109,128.60 as payment for the

unpaid value of Respondent's outsbook for the 1995-1996 meet.

The Department received Respondent's payment on September 8,

1998. Of the total amount Respondent paid over to the

Department, $108,221.20 was credited against the unpaid value of

the outsbook for the 1995-1996 meet, resulting in full payment of

the outstanding outsbook value. The remaining $907.40 paid by

Respondent to Petitioner was an overpayment.

7. Petitioner alleges that Respondent is responsible for

interest accrued on the unpaid value of the outsbook for the

period of time that amount remained unpaid.

8. According to the Department, the interest owed by

Respondent as a result of its failure to timely remit the value

of the outsbook, "shall be determined at a rate per annum . . .

equal to the State's average investment rate for the preceding

month to the month for which interest is being calculated." The

average interest rate earned on the investment of State funds as

determined by the State Treasurer and/or Comptroller" for the

time period of August 1997 through August 1998, was 6.73 percent.

The Department determined that the interest "shall accrue on the

unpaid aggregate principal amount due the State for the month(s)

from the respective due date." Based on its calculations and

after deducting Respondent's overpayment of $907.40, the

Department asserts that Respondent owes the Department

approximately $6,573.85 in accrued interest.

9. Respondent disputes that the Department has authority

to collect interest on the unpaid amount of the outsbook and

alleges the powers of the Department under Section 550.0251,

Florida Statutes, do not include such authority.

CONCLUSIONS OF LAW

10. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of the

proceeding. Section 120.57(1), Florida Statutes.

11. Chapter 550, Florida Statutes, governs the regulation

of pari-mutuel wagering establishments in Florida. The

Department is charged with the administration, supervision,

regulation, and enforcement of that chapter and the rules adopted

pursuant thereto. Section 550.0251, Florida Statutes.

12. The provisions of Chapter 550, Florida Statutes, and

Chapter 61D, Florida Administrative Code, relevant to this

proceeding are set forth below.

13. Rule 61D-7.001, Florida Adminis trative Code, defines

terms used in Chapter 550, Florida Statutes. Terms relevant in

the proceeding are defined in that rule as follows:

(25) "Meet" is:

(a) For the purposes of accounting or

taxation, a performance or a series of

performances conducted under a single

operating license issued by the Division.

(b) For the purpose of determining racing

dates, the conduct of live racing or jai alai

for any stake, purse, prize, or premium.

(34) "Outs or Outs Ticket" is a winning or

refundable pari-mutuel ticket which is not

redeemed.

(35) "Outs Account" is the computer file

listing all outstanding pari-mutuel tickets

for a particular meet and permitholder.

(36) "Outsbook" is the hard copy report of

the outs account.

Rule 61D-7.001(25), (34), (35) and (36), Florida Administrative

Code.

14. Section 550.1645(2), Florida Statutes, provides that:

All money or other property represented by

any unclaimed, uncashed, or abandoned pari-

mutuel ticket which has remained in the

custody of or under the control of any

licensee authorized to conduct pari-mutuel

pools in this state for a period of 1 year

after the date the pari-mutuel ticket was

issued if the rightful owner or owners

thereof have made no claim or demand for such

money or other property within the aforesaid

period of time, is hereby declared to have

escheated to or to escheat to, and to have

become the property of, the state.

15. Section 550.1645(3), Florida Statutes, requires all

escheated outs to be paid by the licensee within 60 days of the

close of the licensee's meet:

All money or other property that has

escheated to and become the property of the

state as provided herein, and which is held

by such licensee authorized to conduct pari-

mutuel pools in this state, shall be paid by

such licensee to the Treasurer annually

within 60 days after the close of the race

meeting of the licensee. Such moneys so paid

by the licensee to the Treasurer shall be

deposited in the State School Fund to be used

for the support and maintenance of public

free schools as required by s. 6, Art. IX of

the State Constitution.

16. Rule 61D-7.022(6), Florida Administrative Code, which

implements Section 550.1645, Florida Statutes, states:

Where the value of the outs is payable to the

state, the value of the balance of the

outsbook shall be remitted to the Department

of Business and Professional Regulation,

Office of Finance and Accounting, within 1

year and 60 days after the end of the meet

and shall be payable to the Treasurer, State

of Florida.

17. As a pari-mutuel licensee, Resp ondent was authorized to

hold the money or other property represented by unclaimed,

uncashed, or abandoned pari-mutuel ticket for a period of one

year after the pari-mutuel tickets were issued. Section

550.1645(2), Florida Statutes. However, if after one year, no

claim for payment had been made by the rightful owner, the value

of such pari-mutuel tickets escheated to the State by operation

of law. Section 550.1645(2), Florida Statutes. After the one-

year period ended and the value of the outs tickets escheated to

the State, Respondent then had 60 days to pay to the Treasurer

the value of all such tickets as reflected in the outsbook.

Section 550.1645(3), Florida Statutes.

18. The stipulated facts provide competent and substantial

evidence that Respondent violated Section 550.1645, Florida

Statutes, by failing to turn over, within the prescribed time,

the value of outs tickets which had escheated to the State.

19. The penalties for any violation of Chapter 550, Florida

Statutes, that may be imposed by the Department are delineated in

Section 550.0251(10), Florida Statutes. That section states:

The division may impose an administrative

fine for a violation under this chapter of

not more than $1,000 for each count or

separate offense, except as otherwise

provided in this chapter, and may suspend or

revoke a permit, a pari-mutuel license, or an

occupational license for a violation under

this chapter. All fines imposed and

collected under this subsection must be

deposited with the Treasurer to the credit of

the General Revenue Fund.

20. Based on the above-quoted provision, for violations of

Chapter 550, Florida Statutes, the Department may impose

administrative fines of not more than $1,000 for each count or

separate offense and may suspend or revoke a permit, a pari-

mutuel license, or occupational license. Section 550.0251,

Florida Statutes.

21. In the instant case, the Department seeks to impose

against Respondent an administrative fine of $1,000 for the

violation of Section 550.1645, Florida Statutes. This penalty is

a permissible one because it comes within the statutory framework

established in Section 550.0251(10), Florida Statutes. However,

the Department seeks to not only impose an administrative fine

against Respondent, but also seeks to assess and collect accrued

interest on the unpaid value of the "outsbook" for the period of

time Respondent retained that value.

22. It is well established that an administrative agency

has only those powers granted to it by the legislature.

Schiffman vs. Department of Professional Regulation, Board of

Pharmacy , 581 So. 2d 1375 (Fla. 1st DCA 1991). Moreover, any

reasonable doubt as to the lawful existence of a particular power

must be resolved against the exercise thereof. Schiffman , 581

So. 2d 1375, at 1379 citing Florida Bridge Company vs. Bevis , 363

So. 2d 799, 802 (Fla. 1978).

23. As an administrative agency, the Department's duties

and responsibilities are limited to those prescribed by statute.

Accordingly, while the Department is authorized by statute to

impose penalties against persons guilty of violating provisions

of Chapter 550, Florida Statutes, it may impose only statutorily

prescribed penalties. The only penalties expressly provided for

in Chapter 550, Florida Statutes, are the imposition of

administrative fines and the revocation or suspension of licenses

or permits. Section 550.0251(10), Florida Statutes.

Conspicuously absent from Section 550.0251(10), Florida Statutes,

or any other relevant provision of that chapter is language that

expressly or impliedly authorizes Petitioner to assess or collect

accrued interest from persons who violate Chapter 550, Florida

Statutes.

24. The Department's authority to impose penalties, as well

as the scope of that authority, is defined and restricted by

legislative enactments related thereto. A review of Chapter 550,

Florida Statutes, reveals that there is no authority for the

Department's assessing and collecting accrued interest on funds

not timely remitted to the Department. In absence of statutory

authority that allows the Department to assess interest, it is

improper for the Department to do so and any action by the

Department to assess interest changes constitutes an

impermissible enlargement of the Department's legislative powers.

25. If the legislature had intended for the Department to

assess and collect interest on funds not timely remitted to the

State, it would have done so expressly. A review of Chapter 717,

Florida Statutes, which addresses the disposition of unclaimed

intangible property, supports this conclusion. Pertinent

sections of that chapter provide that (1) if property remains

unclaimed for more than 5 years, it is presumed abandoned and,

(2) persons holding abandoned property are required to submit a

verified report regarding such property on May 1 of each year and

to simultaneously pay or deliver to the Department of Banking and

Finance all abandoned property required to be reported or

delivered. Sections 717.102, 717.117(1) and (4), and 717.119,

Florida Statutes.

26. Pursuant to pro visions of Chapter 717, Florida

Statutes, the Department of Banking and Finance, is authorized to

impose various penalties and fines on persons who violate any

provision of that chapter. These include the imposition and

collection of administrative fines not to exceed $2,000.00; a

$10.00 per day penalty for each day the verified report is

delinquent; and, the imposition of a penalty of $500.00 per day

and 25 percent of the value of property not reported, paid, or

delivered, if such action was willful. See Sections 717.132(3),

717.117(4), and 717.134(1) and (2), Florida Statutes.

27. In addition to the aforementioned penalties and fines

that may be assessed by the Department of Banking and Finance,

Section 717.134(4), Florida Statutes, mandates that persons

liable for such penalties shall also pay interest from the date

the unclaimed property should have been paid or delivered. That

section, which expressly provides for interest payments and the

terms and conditions of such payment, states:

In addition to any damages, penalties, or

fines for which a person may be liable under

any other provision of law, any person who

fails to report or pay or deliver unclaimed

property within the time prescribed by this

chapter shall pay to the department interest

at the rate of 12 percent per annum on such

property, or value thereof , from the date

such property shall have been paid or

delivered. The department may waive any

penalty due under this subsection with

appropriate justification. (emphasis

supplied)

28. In ligh t of the above-quoted provision, there is no

doubt that accrued interest payments are prescribed by statute

and may be assessed and collected from persons who fail to timely

comply with the requirements of Chapter 717, Florida Statutes.

Conversely, no similar provision exists in Chapter 515, Florida

Statutes. It, therefore, follows that in absence of express

language in Chapter 550, Florida Statutes, authorizing the

Department to assess and collect accrued interest from violators

of that chapter, no such authority exists.

29. The Legislature has not conferred upon the Department

the authority to assess and collect accrued interest from persons

who fail to remit funds representing the value of outs tickets.

Had the Legislature intended for the Department to assess and

collect interest from violators of Chapter 550, Florida Statutes,

it would have done so expressly as it did in the statutory scheme

set forth in Chapter 717, Florida Statutes, and discussed above

in paragraphs 25-28.

30. Any penalties imposed by the Department are limited or

restricted to those prescribed by statute. Thus, in the instant

case, the Department may impose an administrative fine against

Respondent for violating Section 550.1645, Florida Statutes, but

it is not authorized to assess and collect accrued interest for

that violation.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that (1) an administrative fine of $1,000.00 be

imposed against the Respondent for the violation Section

550.1645, Florida Statutes; and, (2) Respondent shall receive a

credit of $907.40 toward payment of the administrative fine.

RECOMMENDED this 28th day of January, 1999, in Tallahassee,

Leon County, Florida.

___________________________________

CAROLYN S. HOLIFIELD

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 28th day of January, 1999.

COPIES FURNISHED:

Deborah R. Miller, Director

Division of Pari-Mutuel Wagering

Department of Business and

Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

William P. Cagney, III, Esquire

3400 Financial Center

200 South Biscayne Boulevard

Miami, Florida 33131

Eric H. Miller, Esquire

Chief Assistant General Counsel

Department of Business

and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

William Woodyard

Acting General Counsel

Department of Business

and Professional Regulation

1940 North Monroe Street

Tallahassee, Florida 32399-0792

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days from the date of the Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

issue the final order in this case.