GAIL HALLAS, HARRIET E. SCOTT, ) LLOYD CARPENTER, EVE TAMBLE and ) MARILLA HAYDEN, et al., )
vs. ) CASE NO. 81-1023RX
) STATE OF FLORIDA, DEPARTMENT OF ) PROFESSIONAL REGULATION, BOARD ) OF NURSING, )
Respondent. )
Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings. The hearing was conducted at the Division of Administrative Hearings, The Oakland Building, Tallahassee, Florida, commencing at 10:00 A.M., on July 16, 1981. This order is being entered after receipt of proposed orders on August 27, 1981.
For Petitioner: Douglas L. Stowell, Esquire
For Respondent: Frank A. Vickory, Esquire
Assistant Attorney General Department of Legal Affairs The Capitol, Suite 1601 Tallahassee, Florida 32301
Petitioners have brought this action pursuant to Section 120.56, Florida Statutes, challenging the validity of a rule of Respondent, Department of Professional Regulation, Board of Nursing (also referred to herein as the "Board"). Petitioners challenge a recent ammendment to Rule 21O-15.01, Florida Administrative Code, which increased the license renewal fees for nurses regulated by the Board. Petitioners contend that the rule is an invalid exercise of delegated legislative authority and that Respondent failed to comply with the notice provisions of Section 120.54(1), Florida Statutes, prior to the adoption of the amendments to the rule.
The Petitioners are nurses regulated and licensed by the Board of Nursing and are subject to the increased license fees as required by the amendment to the rule now challenged.
The Respondent, Department of Professional Regulation, Board of Nursing, has adopted an amendment to Rule 21O-15.01, Florida Administrative Code, which amendment increases the fee for the renewal of licenses for nurses from twelve dollars ($12.00) to twenty-two dollars ($22.00) biennially.
The amendment to Rule 210-15.01, Florida Administrative Code, substantially affects the Petitioners in that each Petitioner is subject to the provisions of said rule and each Petitioner is required to pay the increased license renewal fee in order that each may continue to be licensed and may continue employment as nurses.
Petitioners, Gail Hallas, Harriett Scott and Eve Tamble, were aware of the proposed rule change and attended and/or participated in the public hearing held on January 2, 1981, regarding the proposed fee increase. The other Petitioners were not aware of the proposed rule change and did not attend the hearing on January 2, 1981, and remained unaware of the proposed rule change increasing the fees for renewal of licenses until after the rule had become effective.
Evidential Stipulations
The following Exhibits were introduced into evidence pursuant to the Stipulation of the parties:
EXHIBIT 1: The entire record submitted to the First District Court of Appeal, Case No. AC-314, involving the same parties hereto and substantially the same issues as are presented herein. These materials include the transcripts of a public hearing held on January 2, 1981, a meeting of the Board held on February 5, 1981, as well as the Notice of Hearing and Meeting published in the Florida Administrative Weekly (F.A.W.), the Department of Professional Regulation (herein also referred to as the "Department") Newsletter, and information used by the Board in determining the fee increase.
EXHIBIT 2: A document titled "Department of Professional Regulation, Board of Nursing, General Information, January 2, 1981," comprised of fiscal information used by the Respondent in determining the license renewal fee increase.
EXHIBIT 3: A document titled "Pro-Ration Bases for 1979-80, Indirect Cost-Annual Report," indicating how expenditures of the Department were prorated to the individual professional boards within the Department.
Witnesses Witnesses
The following persons testified at the hearing held in this cause:
Helen P. Keefe, Executive Director of the Board of Nursing;
Charles Barner, Assistant Secretary of the Department of professional Regulation; and
Louis H. Ritter, Past Secretary of the Department of Professional Regulation.
Further Material Facts
This cause arose from a recent amendment to Rule 21O-15.01, Florida Administrative Code, by the Board of Nursing. As stated before, the amendment increased the biennial license renewal fee of nurses from twelve dollars ($12.00) to twenty-two dollars ($22.00). The twelve dollar ($12.00) biennial fee had been in effect since 1976.
The fee arrangement has its basis per Section 464.013, Florida Statutes. This provision requires that nurses renew their licenses every two years, by application. It is the responsibility of the Department to notify each licensee at least sixty (60) days prior to the end of the biennium so that they may apply for renewal. It was shown in the hearing, that the most recent renewal date established by the Department was April 1, 1981, and that renewal notices were to be mailed out at the end of January, 1981. (In this instance, the Board was unable to reach a final decision by the prescribed date, and the Department, by emergency rule amendment, extended the time by one month in which fees could be paid.)
When the fee was increased, it affected all active and inactive practitioners.
To effectuate the fee increase, exhibits introduced into evidence show that the Board gave notice in the December 12, 1980, volume of the Florida Administrative Weekly of its intent to amend the challenged rule. The notice provided that a hearing would be held on January 2, 1981, upon request. That notice indicated the intention to raise fees set by the Board to meet revenue demands, including renewal of license fees. See p. 50, Petitioner's Exhibit No. 1.
A similar notice was also published on the last page of the Department's December, 1900, issue of its Newsletter. The Newsletter was mailed on or about December 15, 1980, to approximately 1,450 persons. The persons receiving the Newsletter were generally hospital administrators, health care administrators and other employers of nurses. The employers are requested to post the Newsletter, for the benefit of their employee nurses, but Ms. Keefe testified that not all do so and that the Board had no way of knowing how many nurses actually received notice of the Newsletter.
The Florida Nurses Association was also notified of the proposed rule amendments. The F.N.A. is comprised of approximately 5,000 registered nurses only and does not include licensed practical nurses.
No specific attempt was made to notify the class of licensed practical nurses or registered nurses not members of the F.N.A.
The fact that a nursing license fee increase might become necessary had its roots in a document prepared by the Department's staff entitled "State of Florida, Department of Professional Regulation, Annual Report, Board of Nursing," dated September 15, 1980. This document alone was inconclusive, as it
only summarized the Board's fiscal picture for the fiscal year 1979-80, and concluded that the Board would have $400,000.00 of revenues available to begin the 1980-81 fiscal year. However, sometime in October, 1980, when the Department finalized its budget request to be submitted to the Governor, it became clear that the Board's predicted revenues combined with its carry-over revenues would be insufficient to meet the expenditures predicted and requested in the Department's budget request.
Helen P. Keefe, the Board's Executive Director, first became aware of the Department's financial forecasts on November 9, 1980, when she received a copy of the Department's "Financial Package" with a cover memorandum from the Department's Secretary, Nancy Kelley Wittenberg, dated November 7, 1980. That package contained the above-referenced Annual Report of the Board of Nursing, the Department's 1981-83 Legislative Budget Request, and the Projected Cash Balances for fiscal years 1980-81, 1981-82 and 1982-83. This last document indicated that the Board would be into deficit spending by the end of the 1981-
82 fiscal year.
To enable the Board to formally discuss its financial outlook and the possibility of a fee increase, notice was given in the November 21, 1990, edition of the Florida Administrative Weekly that a rules workshop was being scheduled for December 3, 1980, at the Board's headquarters. The purpose of the workshop was stated as being to discuss the possible revision of Rule Chapter 21O-15, Florida Administrative Code. While the notice did reference the specific rule chapter to be discussed, the title and subject matter of the rule chapter were not expressly mentioned, although the notice did state that a copy of the agenda was available upon request.
At the December 3, 1980, workshop, the Board received and discussed the above-referenced Financial Package of the Department. This was followed by the December 12, 1980, notice of amendment in the Florida Administrative Weekly.
Following the notice published in the December Florida Administrative Weekly, a hearing was requested by several nurses and held on January 2, 1981, in Tampa, Florida. Approximately 40 to 50 persons attended, as stated before, including Petitioners Hallas, Scott and Tamble. At the time of the hearing, the Board was proposing an increase in the renewal fees from the then current fee of twelve dollars ($12.00) to thirty dollars ($30.00) biennially. Following considerable discussion, the Board decided not to take any action at that time, deferring further consideration until its regularly scheduled meetings to be held February 4-6, 1981, in Tallahassee. At the conclusion of the January 2, 1981, hearing, the Board made a "general announcement" to those present that the fee increases would be considered again in the February, 1981, meeting.
At the January, 1981, session, in addition to listening to the testimony and comments from the audience, the Board was presented testimony from Mr. Charles Barner, the Department's financial analyst. His testimony before the Board, as well as his testimony in this administrative hearing, indicates that the data on which the Department was basing its financial predictions was dynamic in that it was constantly changing and being upgraded. There were apparently several reasons for this state of affairs. First, the relationship between the Department and the regulatory boards under its control was dramatically altered as a result of reorganization in 1979. The alteration meant that many of the services and functions carried out by the individual boards prior to reorganization are now performed by the Department. Second, as was expected with reorganization of the regulatory agencies, disciplinary complaints and proceedings have increased. Testimony was given at the hearing
that disciplinary hearings involving nurses have increased at least 100 percent since reorganization and that those proceedings currently comprise 50 to 67 percent of each Board meeting. Third, the number of foreign nurses paying to take the examination in Florida was and is expected to decrease as a result of a change in Federal immigration policy and the Board's income from this source will be reduced by an unpredictable amount. Fourth, and most significantly, it was impossible to predict the number of licensed nurses who would renew their licenses. In this respect, renewal fees comprise the largest source of Board income. Prior to 1981 renewal, testimony indicated that there were approximately 110,000 nurses licensed in Florida. During the preceding biennium, however, a requirement that nurses participate in continuing education was imposed as a prerequisite to renewal, and it was felt that a substantial portion of non-working licensed nurses would not meet this requirement and consequently that number of renewals would drop. The Department was unable to accurately predict the number of renewals and was in a position of having to estimate that number with no past performance standards to go on. Information available to the Department on January 2, 1981, caused it to predict 81,000 renewals. As time went by and more current data became available, the Department was able to revise its estimates upwards.
The data presented at the January 2, 1981, rule hearing apparently suggested that a $30.00 biennial renewal fee would be necessary to meet the Board's expenditure predictions during the succeeding biennium. However, because of the concerns expressed by the numerous nurses and nurse representatives who spoke at the rule enactment hearing, as well as the "softness" of the Department's financial predictions, the Board voted to defer any action on the proposed amendment until its next meeting which was scheduled for February 5 and 6, 1981, in Tallahassee. The Board also recommended at that time that the Department extend the license renewal period by 30 days.
Between the January 2, 1981, rule hearing and the February 4, 1981, Board meeting, the Department was constantly involved in revising its financial predictions based on new information that became available.
The Board subsequently noticed the February, 1981, meeting in the January 23, 1981, issue of the Florida Administrative Week1y. The Board did not notice the meeting in Section II, Florida Administrative Weekly, under Proposed Rules. Additionally, the notice of the meeting contained no reference to the proposed rule amendments or that further consideration would be given to the fee increases. It did state that an agenda would be made available upon request.
The agenda for the February, 1981, meeting included reference to adoption of the subject rule amendment by rule number, but made no specific reference to the substance of the rules or fee increases. No other notice of the proposed fee increases was given other than the "general announcement" given at the January 2, 1981, hearing.
The Board took up the proposed amendment to Rule 21O-15.01, Florida Administrative Code, on February 5, 1981. The updated financial predictions were received from the Department which included a series of options based on raising license renewal fees to $14.00, $18.00, $20.00, $22.00 and $24.00.
These predictions wore based on an estimate that 91,000 nurses would renew their licenses. Mr. Barner explained the figures and indicated his belief that the
$22.00 renewal fee was the least that would not result in a deficit at proposed expenditure levels. The Board then voted to adopt the proposed rule amendment insofar as it called for a $22.00 renewal fee. The rule amendment was filed with the Department of State on February 13, 1981.
Following rule adoption, approximately 96,000 nurses had renewed their licenses by June 30, 1981.
In addition to the information already discussed, historical data presented indicates that the number of renewals for nurses has grown each year from 61,980 in 1973, to 91,373 in 1979. Data provided by the Department to the Board of Nursing at its January 2, 1981, meeting (Petitioner's Exhibit No. 2), also established that during the period 1973 - 1979, the average annual expenditure increase of the Board of Nursing was $143,802.00 or a 20 percent average annual increase in expenditures through fiscal year 1978-79. For fiscal year 1979-80, the Board of Nursing spent $1,945,437.00, after reorganization wherein the Department acquired central control over the Board's trust funds and expenditures. Expenditures charged to the Board of Nursing in the first year in which those expenditures were controlled by the Department, showed an annual increase in excess of 50 percent. This increase in expenditures charged to the Board of Nursing is a result of formulas developed by the Department to charge expenditures against individual revenue accounts of its several constituent boards.
In adopting the subject rule, the Board used information in which the Department categorized charges to the Board of Nursing in two ways: direct and indirect. Direct charges are any charges which can be identified to services performed directly for the Board of Nursing or expenses incurred by the Board of Nursing. Direct costs include salaries of 22 employees located in the Board office in Jacksonville, Board members' compensation, purchase of national examinations, travel directly associated with the Board's activities, rent at the Jacksonville office, postage, telecommunications, etc. Indirect costs include all those overhead expenses which cannot be identified to any individual board which are expended by the Department generally. Indirect costs are allocated based upon pro rata formulas for various work centers of functions within the Department. Seven different formulas are used for allocating various categories of indirect costs. An entire breakdown of how the formulas are applied to each board is provided in Petitioner's Exhibit No. 3.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.
The Petitioner has challenged Rule 21O-15.01, Florida Administrative Code, based upon alleged failure to comply with the procedural requirements of Section 120.54, Florida Statutes, and as being an invalid exercise of delegated legislative authority within the meaning of Section 120.56, Florida Statutes.
The publication in the Florida Administrative Weekly on December 12, 1980, noticing the January 2, 1981, meeting of the Board of Nursing on the subject of an amendment to the rule was sufficient to comply with Section 120.54, Florida Statutes. It set forth in plain terms the purpose and effect of the proposed rule amendment. It summarized the Board's intention, gave specific legal authority and sufficiently established the economic impact of the rule. This notification process was further supplemented by publication in the December 19, 1980, issue of the Department of Professional Regulation's Newsletter and by the Newsletter of the Florida Nurses Association which preceded the January 2, 1981, meeting.
Those persons affected by the increase in fees were allowed to participate in the January 2, 1981, meeting and the agency was in compliance with the notice provisions established by the decision in Agrico Chemical Co. v. State Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1973) cert. denied, 376 So.2d 74 (Fla. 1979).
The action of the agency in considering the question of rule amendment at the January 2, 1981, meeting complied with all other terms and conditions set forth in Section 120.54, Florida Statutes.
No decision was reached on the question of amendment to the rule in the January 2, 1981, session and an announcement was made that the matter would be continued over to the February, 1981, meeting of the Florida Nursing Board. In the January 23, 1981, issue of the Florida Administrative Weekly, there was a notification of the February, 1981, meeting of the Florida Board of Nursing, and it further stated that an agenda of that meeting could be obtained from that board. The agenda made reference to consideration of Rule 21O-15.01, Florida Administrative Code, but did not make reference to the substance of that rule or of the pendency of fee increases. Nonetheless, the continuation of the January 2, 1981, hearing and ultimate decision in the February, 1981, meeting to increase the fees from twelve dollars ($12.00) to twenty-two dollars ($22.00), as opposed to an increase to thirty dollars ($30.00) as contemplated in the January 2, 1981, meeting dealing with the subject of license renewal and fee collection, satisfied the provisions of Section 120.54, Florida Statutes, and the dictates of Agrico, supra.
The Petitioners in this cause have also challenged the sufficiency of Rule 21O-15.01, Florida Administrative Code, on the basis that the rule does not comply with Section 120.56, Florida Statutes, in that it is an invalid exercise of delegated legislative authority. The Board of Nursing in this instance was authorized to determine the amount of licensing fees, in keeping with the provisions of Section 455.219, Florida Statutes. Further, the Board of Nursing was to make this determination on the basis of estimates provided by the Department of Professional Regulation relating to revenues required to implement the laws regarding the regulation of nurses. In view of the responsibility of the Department of Professional Regulation, vis a vis, the Board of Nursing and other boards within that Department, certain formulas were devised to promote a pro rata responsibility for the various boards to provide the necessary funding. This information, together with the estimated number of practitioners who would renew their nurses license, formed the basis for the adoption of Rule 21O-15.01, Florida Administrative Code. In responding to the attack set forth herein, whether or not the formula utilized by the Department of Professional Regulation was the most efficient formula, is not controlling. The controlling question is whether the Nursing Board utilized that information provided on the subject of the formula and estimated numbers of nurse practitioners renewing their licenses, in keeping with the enabling legislation and in a way that was not arbitrary and capricious, the Nursing Board, having only the powers of persuasion related to the pro rata method for collecting revenues for the overall operation of the Department, as opposed to authority in establishing that formula. The Board of Nursing, in its decision to increase the biennial fees for license renewal from twelve dollars ($12.00) to twenty-two dollars ($22.00) validly exercised legislative authority and did not act in an arbitrary or capricious way.
In summary, the Petitioners have failed in their procedural Section 120.54, Florida Statutes, and substantive Section 120.56, Florida Statutes, attack on wile 21O-15.01, Florida Administrative Code, and it is, therefore,
ORDERED that the Petition to determine the invalidity of the existing Rule 21O-15.01, Florida Administrative Code, is DENIED. 1/
DONE and ENTERED this 15th day of September, 1981, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The Oakland Building
Filed with the Clerk of the Division of Administrative Hearings this 15th day of September, 1981.
1/ The parties, in the person of counsel, have submitted proposed recommended orders in this action. Those recommended orders have been reviewed prior to the entry of this Final Order. To the extent that the recommended orders are consistent with this Final Order, they have been utilized. To the extent that the recommended orders are inconsistent with this Final Order, they are hereby rejected.
Douglas L. Stowell, Esquire STOWELL AND MANG
Percy W. Mallison, Jr., Esquire Assistant Attorney General Department of Legal Affairs The Capitol
Ms. Liz Cloud Department of State Room 1802, The Capitol
