CEO 95-36 -- December 1, 1995
GIFT ACCEPTANCE AND DISCLOSURE
VALUATION OF SEATING IN ARENA SKYBOX
To: Mr. Thomas J. Wilkes, County Attorney, Orange County (Orlando)
A gift of a ticket to attend an Orlando Magic basketball game in Orange County's "skybox" in the Orlando Arena should be valued at $105.00 for purposes of the gift law contained in Section 112.3148, Florida Statutes. As the gift involves a ticket, its valuation is controlled by Section 112.3148(7)(h), rather than the general rule of the "cost to the donor." Applying the Commission's valuation rules contained in 34-13.500(5), F.A.C., leads to the conclusion that the value of a ticket to the County's skybox is the same value as the cost of admission to persons with similar tickets, even though the cost to the donor (the County) is zero.
Under Section 112.3148, Florida Statutes, what is the valuation of a ticket to attend an Orlando Magic basketball game in Orange County's "skybox" in the Orlando Arena?
In your letter of inquiry, you advise that in March 1987 Orange County contributed fifty million dollars toward the cost of constructing the Orlando Arena. The remaining construction costs were paid by the City of Orlando, which owns and operates the Arena. In 1991, the City gave the County the use of a private suite, or "skybox," in the Arena. The County did not pay any money or other consideration for the skybox, and the skybox was not given as legal, contract consideration for the County's assistance in financing the arena. The County has no obligation to pay rent or to pay for maintenance or overhead or any other ongoing costs of the skybox, you advise.
Prior to the beginning of each National Basketball Association season, the City provides 16 tickets, free of charge, to the County for seating in the County skybox for each Orlando Magic home game. In addition to identifying the arena seat and the date and time of the Magic game the ticket is for, each of these tickets is marked "$0" in two locations. The Magic reports that tickets for other skyboxes are sold for $105.00 apiece. Thus, you note, the fair market value of a skybox ticket for a Magic game would be $105.00, although the cost to the County for each ticket is zero.
You advise that the County is free to distribute, discard, or destroy its Magic tickets as it chooses. From time to time, the County distributes its tickets to members of the Board of County Commissioners and other reporting individuals, such as Florida legislators, Orange County "constitutional" officers, commissioners from other counties, and municipal officials. A substantial number of tickets are given to other persons, including rank and file County employees, children, and private sector citizens, you note.
Under the gift law, Section 112.3148, Florida Statutes, the valuation of a gift can be of significant consequence, as in many instances the decision of whether a gift can be given to a "reporting individual" or accepted by that person, turns on whether its value exceeds $100. Section 112.3148(4) and (5), Florida Statutes. If the gift can be accepted, the decision of whether the "reporting individual" must disclose it likely will depend on whether its value exceeds $100. Section 112.3148(8).
Valuation principles appear in Section 112.3148(7), which provides in paragraph (a):
The value of a gift provided to a reporting individual or procurement employee shall be determined using actual cost to the donor, 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. . . .
This paragraph provides the general principle that gifts are to be valued according to the "actual cost to the donor," unless personal services are being provided. Paragraphs (b) through (i) then provide specific valuation rules governing specific circumstances or specific types of gifts. In our view, therefore, 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. For example, if the gift is transportation provided in a private conveyance, valuation would not be based on the general rule of paragraph (a) (cost to the donor), but rather would be based on the principle expressed in paragraph (d), which provides that "[t]ransportation provided in a private conveyance shall be given the same value as transportation provided in a comparable commercial conveyance." Therefore, in some instances, such as this, the Legislature has made it clear that the value of a gift is not the actual cost to the donor, but instead may more closely approximate fair market value.
Here, the subject is tickets for admission to sporting events, and Section 112.3148(7)(h) provides:
(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.
As the gifts here are tickets and the law provides a specific description of how to value this type of gift, their value for purposes of the gift law would be governed by the principles expressed in Section 112.3148(7)(h), rather than by the general "actual cost to the donor" principle of Section 112.3148(7)(a).
We have promulgated rules to implement these statutory provisions. Rule 34-13.500(5), Florida Administrative Code, states in relevant part:
(5) 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 consistent with the provisions contained in Section 112.3148(7)(h), F.S., notwithstanding whether food or beverages are served at the event.
(a) An "event" includes a series of related functions happening on consecutive days. If a series of tickets are given at the same time, such as a football season ticket, the value of the gift is the face value of all the tickets combined.
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(c) Where a ticket to an event involves seating in a skybox, the actual annual cost of leasing the skybox is included in the value of the ticket to the event. The annual cost of the lease shall be divided by the number of persons which can be seated in the skybox, and further divided by either:
1. the number of events held annually at the stadium, if known; or
2. the number of events held during the preceding year. The provisions of this subsection may be illustrated by the following example:
EXAMPLE: Where the cost of leasing a skybox at a football stadium is $10,000 annually, where the skybox can seat 10 persons, where the stadium hosts five football games each year, and where a ticket to an event in the stadium costs $20, the value of a ticket for seating in the skybox for the event is $10,000 divided by 10 seats, divided by 5 games, plus $20 per ticket, or $220 per person.
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(e) A ticket where no value is expressed on the face of the ticket should be valued on a daily or per event basis, whichever is greater, i.e., the cost of admission to persons with similar tickets, regardless of the cost to the donor.
Since seating in a skybox is involved here, Rule 34-13.500(5)(c) requires that we add a pro-rated amount of "the actual annual cost of leasing the skybox" to the value of the ticket to determine the value of a skybox seat to a Magic game given by the County. In this case, nothing should be added to the value of the ticket, as you have explained that the cost of the skybox to the County is zero.
Finally, Rule 34-13.500(5)(e) provides that where no value is expressed on the face of the ticket, the ticket should be valued at "the cost of admission to persons with similar tickets, regardless of the cost to the donor." Here, tickets provided by the County show no value on their face--in essence, they simply are complimentary tickets. For similar skybox seats, you have advised, the cost of admission to a Magic game is $105.00. Therefore, we conclude that, valued on the "per event basis" specified for tickets in Section 112.3148(7)(h), the value of each ticket to a Magic game in the County's skybox is $105.00.
In your letter, you argue that Section 112.3148(7) appears to require that the "actual cost to the donor" be calculated in accordance with an applicable method listed in paragraphs (b) through (i). As noted above, however, we view paragraph (a) as establishing the general valuation principle of "cost to the donor," subject to any other exception listed in paragraphs (b) through (i). In this case, although the actual cost to the donor (the County) for each ticket is zero, the value of each ticket for purposes of the gift law, applying the principles expressed in Section 112.3148(h) and Rule 34-13.500(5), for the upcoming Magic season is $105.00.
Your question is answered accordingly.
ORDERED by the State of Florida Commission on Ethics meeting in public session on November 30, 1995, and RENDERED this 1st day of December, 1995.
William J. Rish