Pursuant to Section 112.3148(7)(h), Florida Statutes, and Rule 34-13.500(5), Florida Administrative Code, an invitation to play in a charitable golf tournament was an "event" that is valued based upon the cost an individual had to pay to play in the tournament. Thus, where the Executive Director of Department of Revenue was invited to play in a tournament by a company that has entered into contracts with the Department within the past 12 months, he received a gift valued at $225. Since the company which invited the Executive Director to play in the tournament does business with the Department and has entered into at least one contract with the Department within the preceding 12 months, the Executive Director received a prohibited gift unless, within 90 days of receipt, he pays down the value of the gift pursuant to Section 112.3148(7)(b), Florida Statutes, so that its value does not exceed $100.
How would a round of golf in a charitable golf tournament be valued, where you, the Executive Director of the Florida Department of Revenue, were invited to play in the tournament by a company which contracts with the Department and where the company paid a fee to the charitable organization to sponsor the tournament?
Your question is answered as follows.
From your letter of inquiry as well as written information provided to our staff, we are advised that you are the Executive Director of the Florida Department of Revenue and that you were invited by an employee of a company doing business with your agency to play in a golf tournament benefiting the United Way. The company which invited you to play in the tournament paid a $5,000 sponsorship fee to the United Way and, in exchange for their sponsorship, was allowed to invite eight people (two teams of four) to play in the golf tournament. This level of sponsorship also entitled the company to advertising during the event and twenty additional tickets to the silent auction/reception held the evening before the tournament. You further indicate that all participants in the tournament were invited to the silent auction/reception and received a round of golf, including use of a cart, a complimentary lunch, eligibility for various door prizes and a complimentary "goodie bag" containing a golf shirt and tie and other tokens. Although you did not attend the silent auction/reception, you played in the tournament on May 2, 2004 and now need to determine the value of the gift so that you can, if necessary, provide reimbursement to the donor within the 90-day time frame specified by statute.
Section 112.312(12)(a), Florida Statutes, defines the term "gift" as follows:
'Gift,' for purposes of ethics in government and financial disclosure required by law, means that which is accepted by a donee or by another on the donee's behalf, or that which is paid or given to another for or on behalf of a donee, directly, indirectly, or in trust for the donee's benefit or by any other means, for which equal or greater consideration is not given within 90 days, including:
10. Entrance fees, admission fees, or tickets to events, performances, or facilities.
Unquestionably, your entry into the tournament and the activities related to it was a "gift" for purposes of Section 112.312(12)(a), Florida Statutes, as it constitutes admission to an event. Regarding the acceptance of gifts, Section 112.3148(4), Florida Statutes, provides:
A reporting individual or procurement employee or any other person on his or her behalf is prohibited from knowingly accepting, directly or indirectly, a gift from a political committee or committee of continuous existence, as defined in s. 106.011, or from a lobbyist who lobbies the reporting individual's or procurement employee's agency, or directly or indirectly on behalf of the partner, firm, employer, or principal of a lobbyist, if he or she knows or reasonably believes that the gift has a value in excess of $100; however, such a gift may be accepted by such person on behalf of a governmental entity or a charitable organization. If the gift is accepted on behalf of a governmental entity or charitable organization, the person receiving the gift shall not maintain custody of the gift for any period of time beyond that reasonably necessary to arrange for the transfer of custody and ownership of the gift.
Section 112.3148(4) prohibits you from knowingly accepting, directly or indirectly, a gift from a lobbyist who lobbies the Department of Revenue or from the partner, firm, employer or principal of a lobbyist if you know or reasonably believe that the gift has a value in excess of $100.
You have advised that the person who invited you to play in the tournament is an employee of a company with which the Department has a number of contracts. You further advise that the Department has entered into at least one contract with the company within the past 12 months, although you did not personally participate in the contract procurement process. You further relate that, to the best of your knowledge, the person who invited you to play was also not involved in that particular matter on behalf of the company. You describe a multi-stage procurement process for this one particular contract where the Department was represented by fifteen people, twelve people with the company attended or participated in the vendor orals, seven people represented the company during negotiations, and six people represented it in the contract discussions.
The statutory definition of "lobbyist" in Section 112.3148(1)(b)1 means
any natural person who, for compensation, seeks, or sought during the preceding 12 months, to influence the governmental decisionmaking of a reporting individual or procurement employee or his or her agency or seeks, or sought during the preceding 12 months, to encourage the passage, defeat, or modification of any proposal or recommendation by the reporting individual or procurement employee or his or her agency.
Here, where the company has obtained at least one contract from the Department within the last 12 months through the process described above, we view the company as the employer of a "lobbyist" who has sought to influence procurement decisions of the Department, whether or not the employee who invited you to play in the tournament participated in the contract procurement or was registered as an executive branch lobbyist. Because of the language in Section 112.3148, Florida Statutes, the prohibition against accepting gifts with a value in excess of $100 extends to gifts from a company that has attempted to influence the Department in procurement matters within the preceding 12 months. Therefore, since your participation in the tournament meets the definition of "gift," and since the donor of the gift has attempted to influence the governmental decisionmaking of the Department within the preceding 12 months, the valuation of the gift will determine whether you need to reimburse the company for any amount which exceeded $100.
With regard to valuation, Section 112.3148(7), Florida Statutes, provides in relevant part:
(a) The value of a gift provided to a reporting individual or procurement employee shall be determined using actual cost to the donor, less taxes and gratuities, except as otherwise provided in this subsection, and, with respect to personal services provided by the donor, the reasonable and customary charge regularly charged for such service in the community in which the service is provided shall be used. If additional expenses are required as a condition precedent to eligibility of the donor to purchase or provide a gift and such expenses are primarily for the benefit of the donor or are of a charitable nature, such expenses shall not be included in determining the value of the gift.
(b) Compensation provided by the donee to the donor, if provided within 90 days after receipt of the gift, shall be deducted from the value of the gift in determining the value of the gift.
(c) If the actual gift value attributable to individual participants at an event cannot be determined, the total costs shall be prorated among all invited persons, whether or not they are reporting individuals or procurement employees.
(h) Entrance fees, admission fees, or tickets shall be valued on the face value of the ticket or fee, or on a daily or per event basis, whichever is greater.
(j) The value of a gift provided to several individuals may be attributed on a pro rata basis among all of the individuals. If the gift is food, beverage, entertainment, or similar items, provided at a function for more than 10 people, the value of the gift to each individual shall be the total value of the items provided divided by the number of persons invited to the function, unless the items are purchased on a per person basis, in which case the value of the gift to each person is the per person cost.
(k) The value of a gift of an admission ticket shall not include that portion of the cost which represents a charitable contribution, if the gift is provided by the charitable organization.
In CEO 95-36, we noted that Section 112.3148(7)(a)contained the general principle that gifts are to be valued according to the "actual cost to the donor." The remaining provisions in Section 112.3148(7) then provide specific valuation rules governing specific circumstances or specific types of gifts. We further observed that according to the usual principles of statutory construction, where a specific statute is applicable in determining the value of a gift, that statute will control over the more general statute and, rather than a gift being valued based on the cost to the donor, the value will more closely approximate fair market value. Thus, in CEO 95-36, we concluded that the value of the basketball tickets the legislator received was the cost of admission to persons with similar tickets.
In this situation, as an "event sponsor," the company paid $5,000 to the charitable organization, and that level of sponsorship entitled the company to two foursomes in the tournament, advertising, and twenty additional tickets (each having a face value of $50) to the silent auction/reception held the night before the tournament. You represent that an individual could pay $225 to play in the tournament and note that one pays substantially less—$30 greens fees and $15 for a cart—to play a week-day round of golf at the same private country club.
In Chapter 34-13, Florida Administrative Code, we have promulgated rules to further elucidate the valuation principles expressed in Section 112.3148(7).Rule 34-13.500(5) states:
A ticket, entrance fee, or admission fee, such as a golf greens fee, which admits the donee to an event, function, or activity, is valued on the face value of the ticket or fee, or on a daily or per event basis, whichever is greater.
Based upon this rule and in conjunction with the other valuation principles contained in Section 112.3148(7), Florida Statutes, we believe that it is most appropriate to value the invitation to play in the tournament as an "event." For this reason, it is not appropriate to "back-out" the cost of items that were included in the event but of which you did not partake or to itemize the cost of only those items you accepted. All of the items were part of the "event," and since an individual could pay $225 to play in the tournament, we believe that $225 is the value of the gift you received.
Because the situation you describe - playing in a charitable golf tournament - is not unique, we would like to take this opportunity to make additional observations about the valuation principles in Section 112.3148(7) in this context. Even though the golf tournament benefited a charitable organization, Section 112.3148(7)(k) is not applicable because the gift was not given to you by the charitable organization; it was given to you by the company doing business with your agency. Only when the donor of the gift is a charitable organization can the recipient deduct that portion of the gift that represents a charitable contribution. Therefore, Section 112.3148(7)(k) is not applicable.
Section 112.3148(7)(c) allows for the proration of costs among all invited persons, whether or not they are reporting individuals or procurement employees, if the actual gift value attributable to individual participants cannot be determined. Similarly, Section 112.3148(7)(j) allows proration at events where more than 10 people are invited, unless the items are purchased on a per-person basis, in which case the value of the gift to each person is the per-person cost. We construe these provisions as applicable only in those situations where the total costs of the event are paid for by the donor.Here, the company did not pay for the entire tournament and its related functions. Therefore, it would not be appropriate to prorate the $5,000 sponsorship fee among the eight golfers who played on the company's two teams.
In light of the foregoing, the value of your participation in the tournament would be the same as what an individual could have paid to play in the tournament - $225. Since the company that invited you to play has entered into contracts with your agency within the preceding 12 months, we believe that you are prohibited from accepting gifts from the company where the value of the gift exceeds $100. Therefore, in accordance with Section 112.3148(7)(b), Florida Statutes, you would be required to reimburse the company at least $125 ($225 – 100 = $125) within 90 days of the date you played in the golf tournament.
Your question is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on July 22, 2004 and RENDERED this 27th day of July, 2004.
Joel K. Gustafson