BUREAU OF CREDIT ADMINISTRATION, ) INC., d/b/a BUREAU OF CREDIT ) ADMINISTRATION COLLECTION SERVICE )
vs. ) CASE NO. 80-2208RP
Respondent. )
This is a proceeding for the administrative determination of the validity of the proposed rule Chapter 7B-5 of the Respondent, pursuant to Section 120.54(4), Florida Statutes.
Jane E. Heerema, Esquire Roberts & Egan, P.A.
For Respondent: James N. Watson, Jr., Esquire
The petition herein was filed by Petitioner and Florida Collectors Association wherein it was alleged that Respondent had improperly asserted rule- making authority as to consumer collection practices under Part V, Chapter 559, Florida Statutes, in the absence of a delegation to perform such function by the legislature. It further alleged that certain proposed rules within proposed Chapter 7B-5, Florida Administrative Code, were invalid because they imposed substantive requirements on collection agencies which expanded, modified, or conflicted with the pertinent statutes which they purported to implement.
The parties entered into a prehearing Joint Stipulation and Motion which was accepted by the Hearing Officer. An Order was thereafter issued wherein: (a) Florida Collector's Association was dismissed as a party to the proceeding; (b) Petitioner Bureau of Credit Administration, Inc. was determined to have standing to bring this proceeding; (c) a scheduled hearing was cancelled and (d) the case was submitted on proposed orders and memoranda of law solely on the question of Respondent's general rule-making powers under Part
V, Chapter 559, F.S. Consideration of the validity of the individual proposed rules challenged by Petitioner was deferred pending resolution of the foregoing proposition.
In view of the foregoing agreed disposition of the matter, findings of fact are unnecessary.
CONCLUSIONS OF LAW
Petitioner contends that the proposed Rule Chapter 7B-5 is invalid because there is no legislative delegation of rule-making authority to Respondent in Part V of Chapter 559, Florida Statutes, and because "No agency has inherent rule-making authority . . . ." Section 120.54(14), Florida Statutes. Respondent concedes the lack of express rule-making authority under Chapter 559, but asserts that the agency has implied authority to do so in order to carry out the intent of the legislature in the regulation of an industry of public interest through the licensing power.
The scope and extent of agency rule-making powers has been stated generally as follows:
The rule-making power which the legislature may validly delegate to administrative agencies must be and is limited by the statute conferring the power. Administrative agencies, when empowered to do so, may make and enforce regulations to carry out powers definitely conferred on them, but they are not permitted to do more. The legislature cannot cloth them with more, and neither
may they assume to do more. While an ad- ministrative agency may regulate, it may not legislate unless so authorized by the constitution. Its power to adopt rules and regulations is limited to the yard- stick laid down by the legislature.
Moreover, the rules and regulations enacted by administrative agencies must be reasonable.
Where lawful rule-making authority is clearly conferred or fairly implied, and it is consistent with the general statutory duties of the agency, a wide discretion is accorded it in the exercise of such authority.
Statutory authority to make reasonable and just rules and regulations to carry into effect a legislative purpose necessarily includes the power to make all rules and regulations needed or expedient to accomplish the general statutory purpose.
In Florida Beverage Corporation, Inc., et. al. v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975), the First District Court of Appeal stated as follows:
It is well established in Florida that the Legislature, having enacted a Statute
complete in itself which declares a legislative policy or standard and operates to limit the power delegated, may authorize an administrative agency to prescribe rules and regulations for its administration. It is equally well settled that the Legislature may expressly authorize designated public officials to provide rules and regulations for the complete operation and enforcement of the law or laws within their express general purposes. . . Where the empowering provision of a statute states simply that
an agency may "make such rules and regulations as may be necessary to carry out the provisions of this Act", the validity of regulations promulgated there- under will be sustained so long as they are reasonably related to the purposes of the enabling legislation, and are not arbitrary or capricious. (Citations omitted)
The same Court in Agrico Chemical Company v. State of Florida, Department of Environmental Regulation, et al., 365 So.2d 759 (Fla. 1st DCA 1978) stated:
Thus, in a 120.54 hearing, the hearing officer must look to the legislative authority for the rule and determine whether or not the proposed rule is encompassed within that grant. The burden is upon one who attacks the proposed rule to show that the agency, if it adopts
the rule, would exceed its authority . . . .
In both of the above cases, the state agencies concerned had been delegated general rule-making power by the Legislature.
Section 120.53, F.S., requires state agencies to adopt rules relative to their organization, rules of practice and procedure, and scheduling of meetings, hearings, and workshops. However, Section 120.54(14) provides in part that "No agency has inherent rule making authority."
Chapter 20, F.A., the "Governmental Reorganization Act of 1969" provides in Section 20.05(5) that each head of a department shall ". have
authority to promulgate rules pursuant and limited to the powers, duties, and functions enacted hereby;" Section 20.16 sets forth the organization of the Department of Business Regulation. Subsection 20.16(6) authorizes the Department to establish uniform application forms and certificates of license for use by its divisions, but provides further that "Nothing contained in this subsection shall authorize the department to vary any substantive requirements, duties, or eligibilities for licensure or certification as provided by law."
Section 559.56, Florida Statutes, provides as follows:
559.56 Powers and Duties of the division.-- The division is vested with the authority and power to issue or deny licenses to operate collection agencies and to issue or
deny certificates of qualifications, in accordance with the provisions of this part. The division is also vested with the authority and power to perform any other function or duty specifically provided in this part.
Sections 559.55-78, F.S. provide a statutory basis for the issuance or denial of licenses to operate collection agencies upon application therefor, together with payment of a license fee and posting of a surety bond. A further prerequisite to receipt of a license is the issuance of a certificate of qualification by Respondent's Division of General Regulation ("Division") to designated owners, officers and the supervisor of the proposed agency. Specific grounds for denial of a certificate of qualification are set forth in the statute. Such a denial is the sole ground for denial of a license.
The Division is required to design application forms for both licenses and certificates of qualification, and the statute spells out the precise information to be contained therein. The license and certificate of qualifications are required by statute to be in such form as may be determined by the Division and must specify certain information set forth in the statute. The Division is also required to design a form for application of a certificate holder to change the licensed name of the collection agency. Further, the Division is required to design forms for renewal applications for licenses and certificates of qualification which must include specific information as set forth in the statute. The Division is also required to design a form for a certificate of registration of new location of a collection agency which sets forth specific information required by the statute. The statute designates the counsel and legal staff of Respondent to act as attorney for the Division in the enforcement of the provisions of Part V, Chapter 559. Prohibited practices are set forth in Sections 559.72-73, and Respondent is authorized to seek judicial enforcement concerning violations of the law upon sworn complaints.
The Division is given discretionary authority in two instances. One is under Section 559.59(2)(a) which permits Respondent to deny a certificate of qualification if an applicant has been adjudicated guilty of a felony ". . . when the felony is of such a nature as to demonstrate the applicant's unfitness to direct the business activity of a collection agency." The other discretionary function is under Section 559.62(4) wherein a collection agency may change its name. "If the division is satisfied that such new name or names are not so similar to that of a public officer or agency or that used by another licensee that the public may be confused or misled thereby . . ."
Both parties to this proceeding cite various court decisions as supporting their respective contentions, but those cases relate almost exclusively to the question of the exercise by an agency of powers not delegated to it by legislation, primarily in situations where the particular agency had been granted express general rule-making authority. No case is cited which bears directly on the issue at hand, i.e., the authority of an agency to promulgate rules and regulations absent a grant of power to do so by the legislature. Respondent's argument that an agency has the implied power to establish rules based solely on the fact that it is charged with the regulation of an industry through its licensing power cannot be accepted unless the particular statute uses language which clearly demonstrates an intent to delegate such authority to the agency. For example, such an implied delegation might be found in statutory language which charges an agency to "formulate standards" for issuance or denial of licenses, or for the operation of
collection agencies. Part V of Chapter 559 evinces no such intent on the part of the legislature.
As pointed out by Petitioner in its proposed order, the only powers given expressly to Respondent are those to design certain forms and to issue or deny certificates of qualification and collection agency licenses. These functions are ministerial in nature and do not constitute authorization for rule-making in that regard since the legislature has prescribed the items to be included in each form. They therefore do not impose ". . . any requirement or solicit any information not specifically required by statute . . . ." Section
120.52(14), F.S. Although the Division is invested with discretionary authority in denying an application for a certificate of qualification when an applicant has been adjudicated guilty for the commission of a felony which demonstrates unfitness to operate a collection agency, and to determine whether an applicant's change of name is one which might confuse or mislead the public, these matters do not necessarily invest the agency with implied rule-making authority. As noted by Petitioner, those decisions are subject to the adjudicative hearing procedures of Chapter 120. During such proceedings, the agency would be free to urge the application of any policy positions or so called "interpretative rules" which constitute its construction of the statute in question. Such agency positions do not have the force of law as would substantive or "legislative" rules which have been issued pursuant to express or implied statutory authority. See K. Davis, Administrative Law Text, Section 5.03(3d Ed. 1972)
In this case, it is apparent from review of the entire statutory scheme that the legislature made a clear decision not to invest Respondent's Division of General Regulation with rule-making powers. This intent is evidenced by the manner in which the legislature has stated in exhaustive detail the requirements for licensure and certification and left little to the independent judgment of Respondent. For the most part, the agency is merely required to create forms that contain predetermined information or to exercise other ministerial functions. Under such circumstances, it is concluded that Respondent has not been delegated rule-making authority and, as a consequence, pursuant to Section 120.54(4), proposed Rule Chapter 7B-5 is determined to be an invalid exercise of delegated legislative authority.
In view of the foregoing determination that Respondent lacks general authority to promulgate rules, consideration of Petitioner's challenge to individual proposed rules is unnecessary.
DONE AND ORDERED in Tallahassee, Leon County, Florida, this 23rd day of February, 1981.
THOMAS C. OLDHAM
Filed with the Clerk of the Division of Administrative Hearings this 23rd day of February, 1981.
Michael Egan, Esquire and Jane E. Heerema, Esquire Roberts and Egan, P.A.
James N. Watson, Jr., Esquire Department of Business Regulation The Johns Building
Carroll Webb, Executive Director Administrative Procedures Committee Room 120 Holland Building Tallahassee, Florida 32301
