STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SUPPORT TERMINALS OPERATING ) PARTNERSHIP, L.P.; COMMODORES ) POINT TERMINAL CORPORATION; ) OLAN B. WARD, SR.; MARTHA P. ) WARD; ANTHONY TARANTO; )

ANTOINETTE TARANTO; J.V. ) GANDER DISTRIBUTORS, INC.; )

J.V. GANDER, JR.; THREE )

RIVERS PROPERTIES, INC.; ) ANDERSON COLUMBIA COMPANY, ) INC.; and PANHANDLE LAND )

& TIMBER COMPANY, INC., )

)

Petitioners, )

)

vs. ) Case Nos. 98-1764RP

) 98-1866RP

BOARD OF TRUSTEES OF THE ) 98-2045RP

INTERNAL IMPROVEMENT TRUST ) 98-2046RP FUND, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was held in these cases on May 21, 1998, in Tallahassee, Florida, before Donald R. Alexander, the assigned Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioners: Daniel D. Richardson, Esquire

98-1764RP and 50 North Laura Street, Suite 2800 98-1866RP Jacksonville, Florida 32202-3650

For Petitioners: Thomas M. Shuler, Esquire 98-2045RP Post Office Box 850

Apalachicola, Florida 32239-0850

For Petitioners: Kenneth G. Oertel, Esquire 98-2046RP Timothy P. Atkinson, Esquire

Post Office Box 1110 Tallahassee, Florida 32302-1110

For Respondent: Suzanne B. Brantley, Esquire

David G. Pius, Esquire

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000 STATEMENT OF THE ISSUE

The issue in these cases is whether certain proposed amendments to Rule 18-21.019(1), Florida Administrative Code, are an invalid exercise of delegated legislative authority, as alleged by Petitioners.

PRELIMINARY STATEMENT

Case No. 98-1764RP began on April 15, 1998, when Petitioner, Support Terminals Operating Partnership, L.P., filed a Petition for Administrative Determination of the Invalidity of a Proposed Rule seeking to invalidate certain proposed amendments to

Rule 18-21.019(1), Florida Administrative Code. The new rules are being proposed for adoption by Respondent, Board of Trustees of the Internal Improvement Trust Fund. Case No. 98-1866RP, which involves an almost identical claim, was initiated on

April 17, 1998, by Commodores Point Terminal Corporation.

Case No. 98-2045RP, which challenges the same rule amendments, was filed on April 30, 1998, by Olan B. Ward, Sr.; Martha P. Ward; Anthony Taranto; Antoinette Taranto; J.V. Gander Distributors, Inc.; J.V. Gander, Jr.; and Three Rivers

Properties, Inc. Finally, Case No. 98-2046RP challenges the same rules and was filed on May 1, 1998, by Anderson Columbia Company, Inc. and Panhandle Land & Timber Company, Inc. The four cases were consolidated by order dated May 11, 1998.

By Notice of Hearing dated April 20, 1998, the first two cases were scheduled for final hearing on May 7, 1998, in Tallahassee, Florida. Respondent's unopposed request for a continuance was granted, and all four cases were rescheduled to May 21, 1998, at the same location.

At final hearing, Petitioner in Case No. 98-1866P offered Exhibits 1-9, which were received in evidence. Petitioners in Case No. 98-2045RP offered Exhibits 1, 2, and 6-8. All were received in evidence except Exhibit 2, upon which a ruling was reserved. Respondent presented the testimony of Percy W. Mallison, Jr., director of the Division of State Lands. Also, it offered Respondent's Exhibits 1-7, which were received in evidence.

The transcript of hearing was filed on June 5, 1998. At the request of the parties, the time for filing proposed findings of fact and conclusions of law was extended to July 7, 1998, and the same were timely filed by all parties. Their submissions have been considered by the undersigned in the preparation of this Final Order. On July 30, 1998, Respondent submitted a Notice of Filing Supplemental Authority in which it cited an appellate decision released the previous day. No responses to the Notice

have been filed.

FINDINGS OF FACT

Based upon all of the evidence, the following findings of fact are determined:

1. Background

   
   

   1. The parties

      
      

      1. Petitioner in Case No. 98-1764RP, Support Terminals Operating Partership, L.P. (Support Terminals), a Delaware limited partnership, is the fee owner of a parcel of permanently improved submerged lands lying beneath a large commercial pier on the St. Johns River located at 6531 Evergreen Avenue, Jacksonville, Florida. On May 28, 1997, Respondent, Board of Trustees of the Internal Improvement Trust Fund (Board), issued a disclaimer of title to those lands for the footprint of its pier subject, however, to the State's right to reclaim the lands in the event certain conditions occurred.

      2. Petitioner in Case No. 98-1866RP, Commodores Point Terminal Corporation (Commodores Point), owns a marine terminal at 1010 East Adams Street, Jacksonville, Florida. Commodores Point holds two disclaimers of title for submerged lands associated with the terminal which were formerly vested in the State. These disclaimers, numbered as 28042 and 28291, were issued on January 25, 1988, and January 23, 1990, respectively. The first disclaimer was for lands which were filled during the

         term of the Butler Act prior to its repeal in 1957. The second disclaimer was issued for dredged lands immediately adjacent to the bulkheaded upland. The interest asserted by the Board in its proposed rule would extend to the lands covered by the two disclaimers.

      3. Petitioners in Case No. 98-2045RP, Olan B. Ward, Sr.; Martha P. Ward; Anthony Taranto; Antoinette Taranto; J.V. Gander Distributors, Inc.; J.V. Gander, Jr.; and Three Rivers Properties, Inc., are the owners of certain permanent dock and pier improvements in Franklin County, Florida, made during the term of the Butler Act. As of February 12, 1998, all of these challengers had requests for disclaimers pending before the Board.

      4. Petitioner in Case No. 98-2046RP, Anderson Columbia Company, Inc. (Anderson Columbia), is a Florida corporation engaged in the business of building and maintaining roadways. It operates an asphalt plant on property which fronts on Pond Creek, a navigable waterway in Bagdad, Santa Rosa County, Florida. The plant is located on property owned by the other Petitioner in Case No. 98-2046RP, Panhandle Land & Timber Company, Inc., a Florida corporation which has leased the property to Anderson Columbia. Prior to 1957, the predecessor-in-title to the property made numerous improvements to the shoreline to facilitate use of the waterway as an area to receive and ship goods through waterborne commerce. The record suggests that some

         of the improvements made by the original owners may no longer exist, and thus the present owners would be directly affected by the new rules.

         
         

      5. The Board is a collegial body consisting of the Governor and the Cabinet of the State of Florida. It is charged with the responsibility of serving as trustee of all sovereign lands in the State of Florida for the citizens of the state.

   2. Standing

      
      

      1. The parties have stipulated that, for purposes of these proceedings alone, all Petitioners are substantially affected by the amendments to Rule 18-21.019(1), Florida Administrative Code, and thus they have standing to initiate these cases.

   3. Preliminary events

      
      

      1. On February 14, 1998, the Board published notice in the Florida Administrative Weekly of its intention to make certain revisions to Rule 18-21.019, Florida Administrative Code. The new rule will have the lengthy title of "Applications, Standards and Criteria, and Forms for Disclaimers, Quitclaim Deeds, or Certificates to Clear Title to Filled Formerly Sovereignty Lands and for Disclaimers for Lands Lost Due to Avulsion or Quitclaim Deeds to Reclaim Lands Lost Due to Artificial Erosion or Artificial Erosion and Avulsion." The proposed text of the rule, as slightly modified from the initial proposal, was later published on April 10, 1998, and a public hearing was held by the

         Board on May 5, 1998. The filing of the rule with the Department of State has been abated pending the outcome of these proceedings.

      2. Among other things, the proposed amendments to Subsection (1) of the rule would generally create new standards, criteria, and forms for applications by property owners for a disclaimer to confirm title of formerly submerged sovereignty lands filled in, bulkheaded, or permanently improved prior to May 29, 1951, or prior to June 11, 1957, in Dade and Palm Beach Counties, and on nontidal navigable streams.

      3. Contending that some of the proposed rule amendments and a form are an invalid exercise of delegated legislative authority on a number of statutory grounds, Petitioners filed their petitions on April 15, 17, and 30, and May 1, 1998. The petitions, as later modified slightly by the parties' stipulation, raise identical grounds and first allege that the Board has exceeded its grant of rulemaking authority by proposing to adopt new Rules 18-21.019(1)(c)1.c., 2., 3., 6., 10., and 11., and Form No. 63-035(16). They also allege that the same rules and form enlarge, modify, or contravene the specific provisions of the law being implemented, and they are arbitrary and capricious. They further contend that proposed Rules 18- 21.019(1)(c)1.c., 2., 3., 6., and 10., and Form No. 63-035(16) are invalid because they are vague, fail to contain adequate standards for agency decisions, or vest unbridled discretion in

         the Board. Finally, the challengers allege that proposed

         
         

         Rules 18-21.019(1)(c)1.c. and 3. and Form No. 63-035(16) are not supported by competent, substantial evidence. There are no assertions that the rules are unconstitutional. As a corollary to these claims and in the event they prevail on any issue, all Petitioners have requested attorney’s fees and costs under Section 120.595(2), Florida Statutes, on the theory the Board’s actions were not substantially justified and there are no special circumstances which would make an award to Petitioners unjust.

2. The Proposed Rules Generally

   
   

   1. A brief historical overview

      
      

      1. When Florida attained statehood in 1845, it became the owner of all lands beneath navigable waters. Under the public trust doctrine, the state holds these lands beneath navigable waters in trust for the benefit of the public.

      2. In order to benefit commerce, the Legislature enacted the Riparian Rights Act of 1856 by which it divested its right and interest in submerged lands to those upland owners who benefited commerce by building wharves and warehouses and filling their water lots. In 1921, for the purpose of improving navigation and commerce, and to stimulate and encourage the improvement of submerged lands, the Legislature enacted the Butler Act, which gave upland riparian owners the right to improve the shoreline adjacent to their property by bulkheading, filling in, and improving the adjacent lands. See Chapter 8537,

         Laws of Florida (1921), formerly codified as Section 271.01, Florida Statutes. The law was made retroactive to the effective date of the 1856 Act and had the effect of divesting the State of its title to the submerged lands adjacent to the upland property if the adjacent riparian owner filled in, bulkheaded, or permanently improved those lands. This divestiture of title, however, was "subject to any inalienable trust under which the State holds said lands." Ch. 8357, Section 1, at 332, Laws of Fla. (1921).

      3. In 1957, the Legislature expressly repealed the Butler Act by Chapter 57-362, Laws of Florida, which is commonly known as the Bulkhead Act. Section 9 of the Bulkhead Act has been codified as Section 253.129, Florida Statutes, and it provides that "[t]he title to all lands heretofore filled or developed is herewith confirmed in the upland owners and the trustees shall on request issue a disclaimer to each such owner." By enacting that law, the Legislature specifically confirmed the title in land to all upland owners who had performed the improvements before the repeal of the Butler Act.

   2. Disclaimers

      
      

      1. An owner of submerged lands under the Butler Act might nonetheless seek a disclaimer from the Board to confirm title to his property for at least two reasons. First, one might seek a disclaimer in order to obtain title insurance if the title company had some question about ownership of the submerged lands.

         Second, because the State charges a fee to lease submerged lands for private uses, an owner might seek a disclaimer from the State in order to establish a superior right to the land and thus avoid paying fees for a private use. The disclaimer would then be used by the titleholder as evidence of his ownership.

      2. Pursuant to the Bulkhead Act, in 1957 the Board began issuing disclaimers to those upland owners who had "filled in" or "developed [bulkheaded]" their submerged lands. Following a court case in 1985, the Board also began issuing disclaimers for submerged lands over which "permanent improvements" had been made. In all, the Board estimates it has issued "more than 100" disclaimers.

         1. Events precipitating the proposed rule changes

            
            

      3. In June 1997, the Board issued a disclaimer of title to Support Terminals for the footprint of a pier but included certain "reversionary" language in the disclaimer. The same language first appeared in an earlier disclaimer issued on May 3, 1996, to a property owner in Monroe County, Florida. In doing so, for the first time since it began issuing disclaimers, the Board attempted to assert a potential reversionary interest in Butler Act lands through a disclaimer. The language in Support Terminals' disclaimer read as follows:

         Provided, however, that because the lands subject to this disclaimer are subject to the inalienable public trust under which the Grantor acquired and holds title to sovereignty lands, if Grantee permanently

         abandons any of the improvements above and as a result of the abandonment said improvements deteriorate and wash away through a gradual, imperceptible process, all right, title and interest in the lands beneath the improvements shall automatically and immediately vest in Grantor, without notice to Grantee, and Grantee shall forfeit all right, title and interest in and to said lands.

      4. After the disclaimer was issued, Support Terminals filed a petition under Section 120.56(4), Florida Statutes, seeking to have the above statement declared invalid on the ground it constituted a rule and the Board had not adopted the statement by rulemaking procedures. See Support Terminals Operating Partnership, L.P. v. Bd. of Trustees of the Internal Improve. Trust Fund, DOAH Case No. 97-2988RU. It also filed a petition under Sections 120.569 and 120.57(1), Florida Statutes, which is docketed as DOAH Case No. 97-5903, alleging that the Board's action affected its substantial interests. The first petition prompted the Board to initiate rulemaking development in January 1998.

         1. The existing and proposed rule

         
         

      5. Existing Rule 18-21.019(1), Florida Administrative Code, which was adopted on November 1, 1995, and amended in minor respects in 1996, generally describes the application process by which owners of "filled formerly sovereignty lands" may confirm title to those lands through a disclaimer. It makes no reference to "submerged" lands, or to owners of lands that were

         "bulkheaded" or "permanently improved" prior to 1957. Subsection (1)(b) of the rule requires that an owner file an application for a disclaimer on DEP Form No. 63-031(16), which has been adopted and incorporated by reference. Neither the existing rule or form contain any standards or criteria which, if not met, would warrant denial of the application for a disclaimer.

      6. The proposed amendments generally add two classes of landowners (those who have bulkheaded or permanently improved the submerged lands) who can apply for a disclaimer under the rules. This is to codify the Board's present practice of issuing disclaimers for all three types of development. However, the Board acknowledges that the new rules are primarily intended to address disclaimers for "permanent improvements," a subject not covered by the existing rule.

      7. The rules also establish eleven new criteria and standards for "submerged sovereignty lands filled in, bulkheaded, or permanently improved" prior to 1957, none of which are found in the current rule or form, which "must be met for an application for disclaimer under this subsection to be approved." These standards and criteria are codified in subparagraphs (1)(c)1.-11. and are readopted in the form; only six, however, are in issue. These six criteria, while somewhat lengthy, are repeated below:

         (c) All of the following standards and criteria for disclaimers must be met for an application for disclaimer under this

         subsection to be approved:

         
         

         (1) . . . For purposes of this rule the words

         . . . "permanently improved" are defined below:

         
         

         c. "Permanently improved" shall mean that a vertical wall or embankment, such as a sea wall, revetment, or similar structure, the purpose of which is to hold back soil or filled in lands from entering the water, was placed on sovereign submerged lands. Permanent improvements are those structures or improvements which are continuing or enduring in the same state, status, and place without fundamental or marked change, and are intended to be fixed, lasting, and stable. Dredged submerged lands adjacent to, and used as adjuncts to, piers or docks may be permanent improvements under the guidelines contained in relevant court orders which are rendered from time to time. Offshore dredging done for the sole or primary purpose of filling in other lands, not as a necessary adjunct to structures which constitute permanent improvements under this rule, shall not be considered permanent improvements under this rule.

         1. Lands below mean or ordinary high water line which were filled in, bulkheaded, or permanently improved prior to the applicable date under subsection (1)(a) above, but which are no longer filled in, bulkheaded, or permanently improved in whole or in part, when application is made, shall not qualify for a disclaimer under this rule.

            
            

         2. Title to lands which are no longer filled in, bulkheaded, or permanently improved, and therefore no longer comply with the Butler Act shall be claimed by the Board of Trustees as part of the Public Trust. This includes lands which have subsequently eroded due to natural causes. Applications for disclaimers for such lands shall be denied.

            
            

            6. The filling in, bulkheading, or permanent improvement must have been made by or on

            behalf of the owner of record of the contiguous riparian upland property or his, her, their, or its agent at the time of the filling in, bulkheading, or permanently improving. Filling in, bulkheading, or permanent improvements made by a person with no legal relationship to the owner of record, or not for the primary purpose of improving and developing the water front property, shall not be disclaimed (e.g., filling in, bulkheading, or permanent improvements made by the Florida Department of Transportation for a bridge or causeway).

            
            

            1. Applications for disclaimers for permanent improvements on or over lands which are still submerged shall be considered on a case-by-case basis. In determining whether to approve or deny such applications, the Board of Trustees shall consider such things as: whether the structure was intended to be temporary or permanent; whether the structure is similar to the types of structures stated as examples in the Butler Act (and in s. 18- 21.019(1)(c)1.c., F.A.C.); whether the structure can last indefinitely (for a reasonable length of time in the context of human life) if it is properly maintained; whether the structure is still standing and is reasonably expected to remain standing; whether and how the structure relates to the uplands and the other proximate filling, bulkheading, or permanent improvement; whether the structure is necessary to make the other filled, bulkheaded, or improved lands fully functional for the purpose for which they were intended; and such other things as are specified by the courts from time to time to be relevant.

            2. Submerged lands to be disclaimed shall be subject to the inalienable Public Trust. Such lands shall be available for the traditional public uses of fishing, swimming, and boating.

            
            

      8. In addition, proposed paragraph (1)(e) provides that "[d]isclaimers issued by the Board of Trustees shall

         substantially conform to DEP Form #63-035(16)," which has been adopted and incorporated by reference. Paragraph 5. of that form has been amended to include the "Standards and Criteria Requirements" which must be met by an applicant. They include, in a verbatim fashion, the disputed standards and criteria set forth in Finding of Fact 19. The form also includes the following language, which essentially parrots language in subparagraph (1)(c)11., considered by Petitioners to be offensive:

         All lands within the above-described area which are submerged at the time of this grant shall be subject to the inalienable public trust. Such lands shall be available for the traditional public uses of fishing, swimming, and boating.

         
         

      9. Finally, the form includes the following "Notice," which is intended to modify the language contained in the disclaimer issued to Support Terminals in Case No. 97-2988RU:

         NOTICE: If at any time or for any reason, the lands described herein are no longer bulkheaded or filled-in or permanently improved, and said lands are no longer being used or intended to be used for the purposes contemplated by the Butler Act, Grantor shall have the right to reclaim all right, title and interest in and to said lands as part of the public trust lands.

      10. As specific authority for adopting the rule amendments, the Board cites Section 253.03(7), Florida Statutes. The specific laws being implemented by the Board are identified as Sections 253.03, 253.12, 253.129, and 253.43, Florida Statutes.

3. Has the Board Exceeded its Rulemaking Authority?

   
   

   1. Petitioners collectively contend that the Board has exceeded its rulemaking authority by proposing amendments to Rules 18-21.019(1)(c)1.c., 2., 3., 6., 10., and 11., and Form No. 63-035(16).

   2. The Board has cited Section 253.03(7), Florida Statutes, as the source of its rulemaking authority. That subsection authorizes the Board to "administer all state-owned lands," to be responsible for, among other things, the "disposition of state-owned lands," and to adopt rules to "carry out the purposes of this act." The Board has also cited Section 253.129, Florida Statutes, as one of the statutes being implemented. It contends that under that statute, it has the specific authority to issue or deny "disclaimers" based upon standards and criteria contained in the new rule.

   3. For the reasons given in the Conclusions of Law portion of this Final Order, the challenged rules and form do not exceed the Board's rulemaking authority, and thus they are a valid exercise of delegated legislative authority.

4. Do the Rules and Form Contravene the Law Being Implemented?

   
   

   1. Petitioners next contend that the same rules and form enlarge, modify, or contravene the specific provisions of law being implemented. For the reasons given in the Conclusions of Law portion of this Final Order, the challenged rules and form do not enlarge, modify, or contravene Section 253.129, Florida

      Statutes, and thus they do not violate Section 120.52(8)(c), Florida Statutes, as alleged by Petitioners.

5. Are the Proposed Amendments Arbitrary and Capricious?

   
   

   1. Petitioners have also contended that the same rules and form are arbitrary and capricious, that is, they are not grounded on fact or logic, or based on a reasonable analysis. Section 18- 21.019(1)(c)1.c. provides a lengthy definition of the term "permanently improved." The first sentence of subparagraph 1.c. defines the following structures or improvements as falling within the purview of the rule:

      buildings, wharves, piers, dry docks, docks, boat houses, warehouses, dwellings, bath houses, marine railways, or other similar structures or improvements which improve or develop the riparian lands for the purposes of navigation and commerce was placed on sovereign submerged lands.

      
      

      Because some of the defined structures (wharves, warehouses, dwellings, and other buildings) are found in the Butler Act itself, and the others come from a string of judicial cases

      interpreting the Act, the first sentence is based upon a reasonable analysis and is thus not arbitrary or capricious.

   2. The second sentence provides that "[p]ermanent improvements are those structures or improvements which are continuing or enduring in the same state, status, and place without fundamental or marked change, and are intended to be fixed, lasting, and stable." This definition was drawn from the definition of the word "permanent" found in the 1979 Edition of Black's Law Dictionary. In doing so, the Board also noted that in DOAH Case No. 91-1408, CSX Realty, Inc. v. Bd. of Trustees of the Internal Improvement Trust Fund (DOAH, Recommended Order issued January 27, 1992)(no Final Order because of settlement), which involved an application for a disclaimer, the Hearing Officer relied on the same source to determine a meaning for the word "permanent." The use of a dictionary to define a word such as "permanent" is not arbitrary or capricious, and thus the rule is not invalid.

   3. The third sentence in the subparagraph addresses the issue of when dredging may be considered as a permanent improvement. It identifies one factor as being "relevant court orders which are rendered from time to time." Because of the current conflict in the law regarding dredged improvements, caused by conflicting District Court of Appeal decisions, the Board's reliance on "relevant court orders" to make this determination is based on logic and reason.

      
      

   4. The next challenged provision is paragraph (1)(c)2., which reads as follows:

      1. Lands below mean or ordinary high water line which were filled in, bulkheaded, or permanently improved prior to the applicable date under subsection (1)(a), above, but which are no longer filled in, bulkheaded, or permanently improved in whole or in part, when application is made, shall not qualify for a disclaimer under this rule.

   5. Under this criterion, an applicant would not qualify for a disclaimer if the submerged lands were "no longer filled in, bulkheaded, or permanently improved in whole or in part."

      The logic for this section is the Board's reasoning that fill and structures must be of a "permanent" nature, as the statute implies, in order to preclude public use. While this view is obviously subject to dispute by the parties, it cannot be said that it was based on whim, rather than reason. Therefore, it is not arbitrary and capricious.

   6. Paragraph (1)(c)3. essentially parrots the concept in the preceding paragraph, but also includes eroded lands. The inclusion of eroded lands was based on the Board's concept of boundary law, as it relates to water boundaries. For the same reason expressed in the previous finding of fact, the paragraph is found to be based on logic and reason.

   7. Petitioners next contend that paragraph (1)(c)6. is invalid on the same ground. It provides as follows:

      6. The filling in, bulkheading, or permanent improvement shall have been made to improve or develop the submerged lands contiguous to the riparian upland property for purposes of navigation and commerce.

   8. Because the improvement of navigation and commerce is a

      
      

      purpose of the Butler Act and the incorporated Riparian Act of 1856, and the language is not inconsistent with case law, the Board used a reasonable analysis in developing this part of the rule.

   9. Petitioners also contend that paragraph (1)(c)10. is arbitrary and capricious. This lengthy paragraph identifies a variety of standards and criteria which the Board intends to use, on a case-by-case basis, to determine whether an improvement is "permanent."

   10. Starting with the premise that structures must be "permanent" in order for an applicant to qualify for a disclaimer, the Board developed the standards and criteria from case law interpreting the Act, the Act itself, administrative decisions, and dictionary definitions. The analysis is a reasonable one and sufficient to withstand Petitioners' attack.

   11. Paragraph (1)(c)11. provides that submerged lands to be disclaimed are subject to the "inalienable Public Trust," and they shall be available for the traditional public uses of fishing, boating, and swimming. Form 63-035(16), also being challenged, contains essentially the same language.

   12. The substance of the rule is drawn from parts of the

       Butler Act itself, which provides that submerged lands to be disclaimed are subject to the "inalienable trust" and public "trust." It also rests upon the Board's logical view that if submerged lands are no longer filled in, bulkheaded, or permanently improved, the public might reasonably assume that the open waters are available for the stated public uses. The Board's choice of language is arguably consistent with a recent appellate case on the subject which implies that when submerged land is no longer "completely foreclosed by development," the public can resume its rights. City of West Palm Beach v. Bd. of Trustees of the Internal Improvement Trust Fund, 23 F.L.W. D1387, D1389 (Fla. 4th DCA, June 10, 1998). Therefore, the provision has a reasonable and logical foundation.

6. Are the Rules Vague, Standardless, and Overly Discretionary?

   
   

   1. Petitioners also assert that Rules 18-21.019(1)(c)1.c., 2., 3., 6., and 10., and Form No. 63-035(16) are vague, fail to contain adequate standards for agency decisions, or vest unbridled discretion in the Board.

   2. By stipulation only, but without specific pleading in their initial petitions, Petitioners have first contended that subparagraph (1)(c)1.c. is invalid for all of the above reasons. As noted earlier, this provision defines the term "permanently improved." Because the language in the definition is not so vague as to confuse a reasonably intelligent person, it is not unlawful. Moreover, through the use of definitions derived from

      a dictionary, the rule contains adequate standards to guide the agency's discretion. Finally, the rule does not vest unbridled discretion in the agency. Therefore, the rule is a valid exercise of delegated legislative authority.

      
      

   3. As to paragraph (1)(c)2., Petitioners claim that the rule fails to establish adequate standards for agency decisions and vests unbridled discretion in the Board by giving the Board the discretion to deny a disclaimer "for even minor changes in the improvement." In response to this objection, however, the Board has demonstrated that when the language in this paragraph is read in pari materia with the definition of "permanently improved," the Board must act under adequately defined standards using sound discretion.

   4. As to paragraph (1)(c)3., Petitioners contend that the rule is vague, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the Board. As to vagueness, they argue that "there is no suggestion of how the state shall claim said lands as part of the public trust." They further contend that there are no standards to determine when land is no longer permanently improved, or when it is sufficiently eroded to trigger the Board's claim of right. Finally, they assert that there is no "reviewable language providing procedural due process to the land owner."

   5. In many respects, paragraph (1)(c)3. parrots paragraph

      (1)(c)2., except that it includes eroded lands. It is clear and precise, and it should not be confusing to a person of common intelligence. As to a lack of standards, the Board will be required to rely upon the definition of "permanent improvements" to guide its actions, and it will do so only after a physical inspection of the property is made, and the applicant is allowed to present evidence regarding his circumstances. As to an alleged lack of standards when land is eroded, the Board has relied upon the fact that under common law, the boundary is ambulatory, and a more definitive standard is not required nor practical. Therefore, the rule is not invalid.

   6. As to paragraph (1)(c)6., which generally requires that the permanent improvements have been made "for purposes of navigation and commerce," Petitioners contend that the rule is vague, fails to establish adequate standards for agency decisions, and vests unbridled discretion in the Board. More specifically, they contend that the rule fails to state whether the owners' original intent had to be for both navigation and commerce, and it allows the Board unbridled discretion "to evaluate the initial waterfront improvement when the statute does not require that each improvement meet any criteria related to purpose."

   7. Because the terms "navigation" and "commerce" are words that have a commonly accepted meaning, they are not unreasonably vague or confusing. Further, through existing case law on the

      subject, navigation and commerce are clearly linked to one another. Finally, in each application for a disclaimer, the Board's discretion is limited by the standards contained in the definition of "permanent improvements." Therefore, the rule is not invalid, as claimed by Petitioners.

   8. As to paragraph (1)(c)10., which identifies the criteria which the Board will consider in determining whether a structure is permanent, Petitioners first claim that the rule is vague because the terms "standing" and "things" are not defined, and the relationship of the structure to other considerations is not known. They further contend that there is no standard of review for the Board's case-by-case inquiry, and thus the Board has unbridled discretion.

   9. A dock or dwelling which is "standing" is not so vague as to confuse persons of common intelligence. Likewise, given the fact that so few cases have interpreted this body of law, with one exception, the six criteria within the rule do not constitute standardless discretion. However, a reasonably intelligent person would be required to speculate as to the meaning of the word "things" in the phrase "such other things as are specified by the courts from time to time." In addition, this language has the practical effect of giving the Board unlimited discretion as to when and if the "things . . . specified by the courts" may be used as a standard in future applications. Therefore, that portion of the rule is an invalid

      exercise of delegated legislative authority on the ground it is vague and standardless.

   10. Finally, Petitioners claim that newly added language in Form No. 63-035(16) is vague because it "creates confusion in the alleged rights of the public in [Petitioners'] land." They also argue that the language creates "no discernible standard to provide guidance to the [Board] in representing the rights and

       interests of the public in the remaining and adjoining river bottoms."

   11. As noted earlier, it is logical to make the assumption that the public could reasonably believe that open waters may be used for public purposes. Second, the Notice contained in the form is precise and clear, and none of Petitioners indicated they misunderstood its intent and purpose. Finally, as to the new criteria recited in the form, for the reasons expressed above, they do not vest standardless discretion in the Board.

       Therefore, the form is not invalid for these reasons.

       
       

7. Is There Competent, Substantial Evidence?

1. Finally, Petitioners allege that there is no substantial, competent evidence to support the amendments to Rules 18-21.019(1)(c)1.c. and (1)(c)3., and Form No. 63-035(16). More specifically, they contend that there is "no evidence" to support the Board's alleged right to reclaim privately-owned land solely due to passive ownership or nonuse. They also argue that there is no evidence that the non-use or non-permanence of prior improvements has any negative impact on the Board's interest in the remaining water body.

2. As to the foregoing contentions, the record supports a finding that the challenged rules and form are based on competent, substantial evidence, and they are therefore valid.

   CONCLUSIONS OF LAW

   
   

3. The Division of Administrative Hearings has

   jurisdiction over the subject matter and the parties hereto pursuant to Sections 120.56(2) and 120.57(1), Florida Statutes (1997).

4. In a rule proceeding such as this, the proposed rule is not presumed to be valid or invalid. Section 120.56(2)(c), Florida Statutes (1997). Further, the Board "has the burden to prove that the proposed rule is not an invalid exercise of delegated legislative authority as to the objections raised." Section 120.56(2)(a), Florida Statutes (1997). While the appropriate quantum of proof is not stated in the statute, one court has recently said that in meeting this burden, "proof 'by a preponderance of the evidence' is not required." Bd. of Clinical Lab. Personnel v. Fla. Ass'n of Blood Banks, 23 Fla. L. Weekly D1851 (Fla. 1st DCA, August 3, 1998).

5. Before addressing the merits of the case, one procedural matter involving the burden of proof requires discussion. In the recent case of St. Johns River Water Mgmt. Dist. v. Consolidated-Tomoka Land Co., 23 Fla. L. Weekly D1787 (Fla. 1st DCA, July 29, 1998), the Court held that "[a] party challenging a proposed rule has the burden of establishing a factual basis for the objections to the rule, and then the agency has the ultimate burden of persuasion to show that the proposed rule is a valid exercise of delegated legislative authority."

   Id. at D1788. In the instant case, only one witness, a Board employee, testified at final hearing, and he was called by the

   Board. In a Notice of Filing Supplemental Authority filed on July 30, 1998, in which the Board cites to the St. Johns case, the Board suggests that because Petitioners did not establish a factual basis for their objections before the Board presented its case-in-chief, their petitions must necessarily fail. The order of proof used at final hearing, however, was established during a motion hearing on May 18, 1998, which was well before the parties had the benefit of the St. Johns decision. It would be highly unfair to now penalize Petitioners on this technical ground, especially where the issues were tightly drawn, only one witness was used by all parties, and the agency suffered no prejudice by producing its evidence first. Therefore, the case will be decided on its merits.

6. Citing numerous statutory grounds, Petitioners contend that the proposed rules are an "invalid exercise of delegated legislative authority" within the meaning of Section 120.52(8), Florida Statutes (1997). That term is defined in relevant part as follows:

   (8) "Invalid exercise of delegated legislative authority" means action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one of the following applies:

   
   

   1. The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(3)(a)1.;

      
      

   2. The rule enlarges, modifies, or

      contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(3)(a)1.;

      
      

   3. The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency;

      
      

   4. The rule is arbitrary or capricious;

      
      

   5. The rule is not supported by competent substantial evidence;

   
   

   A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than the particular powers and duties conferred by the same statute.

   The language found in the closing paragraph of Section 120.52(8), Florida Statutes (1997) is restated in Section 120.536(1), Florida Statutes (1997). The substance of this latter provision is that "a grant of rulemaking authority is necessary, but not alone sufficient to support the rule. The agency must also show that its rule implements a specific statute." St. Johns at D1789.

7. Petitioners first argue that Rules 18-21.019(1)(c)1.c.,

2., 3., 6., and 10., and Form 63-035(16) are invalid because they exceed the District’s grant of rulemaking authority. These rules and form establish new criteria and standards which must be met before an application for a disclaimer will be approved. In seeking to have the rules invalidated because the agency has exceeded its rulemaking authority, Petitioners concede that Section 253.03(7), Florida Statutes, provides the Board with general rulemaking authority to carry out the purposes of Chapter

253. They argue, however, that no statute being implemented gives the Board the specific authority to assert an interest in submerged lands previously conveyed to private owners.

1. In St. Johns, the court held that a rule is a valid exercise of delegated legislative authority "if it regulates the matter directly within the class of powers and duties identified in the statute to be implemented." Id. at D1790. Put another way, the test is whether the rule "falls within the range of powers the Legislature has granted to the agency for the purpose of enforcing or implementing the statutes within its jurisdiction." Id. at D1790. Thus, rulemaking authority is restricted "to subjects that are directly within the class of powers and duties identified in the enabling statute." Id. at D1789.

2. In these cases, Section 253.03(7)(a), Florida Statutes, is cited as the source of the Board's rulemaking authority. It directs the Board:

   to administer all state-owned lands and . . . be responsible for the creation of an overall and comprehensive plan of development concerning the acquisition, management, and disposition of state-owned lands so as to ensure maximum benefit and use. The Board of Trustees of the Internal Improvement Trust Fund shall adopt rules and regulations necessary to carry out the purposes of this act as set forth in this section.

   The statute being implemented is Section 253.129, Florida Statutes, which reads as follows:

   The title to all lands heretofore filled or developed is herewith confirmed in the upland owners and the trustees shall on request issue a disclaimer to each such owner.

   
   

3. Section 253.03(7)(a) authorizes the Board to adopt rules and regulations concerning the "disposition of state-owned lands so as to ensure maximum benefit and use [to the public]" and such other rules as may be "necessary to carry out the purposes of this act." Section 253.129 imposes on the Board the duty to "issue a disclaimer [to upland owners of heretofore filled or developed Butler Act lands]." Thus, the statute being implemented identifies the power to issue disclaimers, which is the subject of the proposed rules.

4. Because the new rules establish standards and criteria for issuing or denying disclaimers to upland owners who have previously filled or developed sovereignty submerged lands, which is a "matter directly within the class of powers and duties identified in the enabling statute [Section 253.129]," proposed Rules 18-21.019(1)(c)1.c., 2., 3., 6., 10., and 11., and Form 63- 035(16) do not exceed the Board's rulemaking authority. Cf. Dep't of Bus. and Prof. Reg. v. Calder Race Course, Inc., 23 Fla.

   L. Weekly D1795, D1796 (Fla. 1st DCA, July 29, 1998)(proposed rule authorizing searches of pari-mutuel wagering facilities invalid where "nothing in the [law implemented] identifies the

   power that the rule attempts to implement, i.e., to search").

   
   

5. Petitioners next contend that the same rules and form violate Section 120.52(8)(c), Florida Statutes, because they enlarge, modify, or contravene the specific provisions of law being implemented. In considering this contention, it is noted first that, contrary to Petitioners' suggestion, inherent in the power to issue disclaimers is the power to deny, or not disclaim, sovereign submerged lands. Cf. State, Bd. of Trustees of the Internal Improvement Trust Fund v. Lost Tree Village Corp., 600 So. 2d 1240, 1245 (Fla. 1st DCA 1992)("no sanction in the law for the Board's decision not to act on an application"); State Bd. of Educ. v. Nelson, 372 So. 2d 114, 116 (Fla. 1st DCA 1979)("the power to issue a certificate . . . necessarily and by fair implication includes the authority to specify the conditions under which such certificates shall be held and revoked"). Thus, the Board has the implied authority to not only grant a disclaimer, but to deny one as well.

6. In the context of the Board's power to issue disclaimers, Section 253.129 refers to "lands heretofore filled or developed." "Filled or developed" lands include those submerged lands which were "actually bulk-headed or filled in or permanently improved continuously from high water in the direction of the channel." Ch. 8537, Section 1, at 333, Laws of Florida (1921). By the proposed rules, and under the authority of Sections 120.52(8) and 120.536(1), the Board seeks to "make

   specific" the meaning of those terms, especially the words "permanently improved." As it now stands, there are no defined standards or criteria by which the Board can make that determination.

7. Petitioners argue, however, that nothing in the Butler Act authorizes the Board to deny a disclaimer if the improvement is not in existence at the time of the application. They also contend that nothing in the public trust doctrine as interpreted in Florida would mandate that result. For these reasons, they claim that the proposed rules enlarge, modify, or contravene the law being implemented. The difficulty here, of course, is that no court has squarely faced the question of whether the Board has the power to deny a disclaimer for previously conveyed lands if the improvements over the submerged land are no longer "permanent," or they are not being used for their originally intended purpose. One party's brief indicates, however, that Anderson Columbia has pending a suit to quiet title in Santa Rosa County Circuit Court raising this very issue.

8. In attempting to resolve this difficult question, it is noted that "the Butler Act is strictly construed in favor of the state." City of West Palm Beach at D1389; Trustees of the Internal Improvement Fund v. Claughton, 86 So. 2d 775, 786 (Fla. 1956). Further, the divestiture of title contemplated by the Butler Act is subject to the public trust under which the state holds submerged lands for the benefit of all citizens of the

   state. Pembroke v. Peninsular Terminal Co., 146 So. 249, 256-57 (Fla. 1933). Indeed, Section 1 of the Butler Act states that the divestment of title is "subject to any inalienable trust under which the State holds lands." Ch. 8357, Section 1, at 332, Laws of Fla. (1921). The same section later provides that the vesting of "full title" is "subject to said trust." Id. at 333. Thus, all grants of land under the Butler Act are subject to the "inalienable public trust," and once the consideration (permanent improvement) for the grant fails, the Board arguably has the authority to place parties on notice (through the denial of a disclaimer) that it may choose to reassert an interest in the lands under the public trust doctrine.

9. It is true, as Petitioners assert, that several early court decisions suggest that upon the completion of the bulkheading or filling of submerged lands, title to those lands became "absolute and equal to that of the upland," and not subject to reversion back to the state by reason of any change of events or circumstances occurring after that date. Holland v. Ft. Pierce Fin. and Constr. Co., 27 So. 2d 76, 80 (Fla. 1946); Duval Engr. and Contracting Co. v. Sales, 77 So. 2d 431 (Fla. 1955); Claughton, at 786. Those cases, however, dealt with filled lands, and not those permanently improved. Filled lands differ fundamentally from submerged lands because traditional public uses of fishing, swimming, and boating cannot be had on filled lands. Moreover, a recent appellate case suggests a

   contrary view. In City of West Palm Beach, the court held that "[t]he statute [Butler Act] contemplates that title will pass when the public's access to the submerged land has been completely foreclosed by development," and that "[l]and under open water can never be subject to divesture under the Act." Id. at D1389. These holdings imply that, once the lands are no longer "permanently improved," or they are no longer used for

   purposes intended by the Act, the grant fails, and the State may reassert on behalf of the public an interest in previously conveyed submerged lands.

10. Petitioners also contend that due process and just compensation considerations come into play in determining the validity of the rules. There were, however, no constitutional claims raised in the initial petitions or prehearing stipulation. Petitioners have further cited cases which hold that, in certain circumstances, the state may be estopped from reasserting its right to claim previously conveyed lands. They have also cited various real property law principles which might impose limitations on the state's right to reclaim the land. The doctrine of estoppel and cited principles, however, should more properly be raised when, and if, the state actually attempts to reclaim title to the submerged lands, and not in a rule proceeding. In this vein, it should be remembered that the rules do not affect the actual title of the property; rather, they simply place parties on notice that the Board may have an

    interest in the property if certain conditions are present. Any issues involving title to or boundary of the lands would be resolved in circuit court.

11. Given the foregoing considerations, it is concluded that the proposed rules do not enlarge, modify, or contravene the statute being implemented, and thus they do not violate Section 120.52(8)(c), Florida Statutes.

12. Petitioners next claim that the same rules and forms are arbitrary and capricious within the meaning of Section 120.52(8)(e), Florida Statutes (1997). An arbitrary decision "is one not supported by facts or logic," Agrico Chemical Co. v. State, Dep't of Envir. Reg., 365 So. 2d 759, 763 (Fla. 1st DCA 1979), while a capricious action is one which is taken irrationally, without thought or reason. Bd. of Trustees, Internal Improvement Fund v. Levy, 656 So. 2d 1359, 1362 (Fla. 1st DCA 1995). Another court has held that "if an administrative decision is justifiable under any analysis that a reasonable person would use to reach a decision of similar importance, it would seem that the decision is neither arbitrary or capricious." Dravo Basic Materials Co., Inc. v. State, Dep't of Trans., 602 So. 2d 632, 635, n. 3 (Fla. 2d DCA 1992). For the reasons cited in Findings of Fact 27-38, it is concluded that Rules 18- 21.019(1)(c)1.c., 2., 3., 6., 10., and 11., and Form No. 63- 035(16) have a logical and factual basis, and they are founded on a reasonable analysis. Therefore, they are not arbitrary and

capricious.

68. Petitioners next allege that Rules 18-21.019(1)(c)1.c., 2., 3., 6., and 10., and Form No. 63-035(16) are invalid on the ground they are vague, fail to establish adequate standards for agency decisions, and vest unbridled discretion in the agency as proscribed by Section 120.52(8)(d), Florida Statutes (1997).

With one exception, for the reasons given in Findings of Fact 39- 49, the rules are not vague or standardless, and they do not vest unbridled discretion in the agency. However, as to that portion of Rule 18-21.019(1)(c)10. which reads "such other things as are specified by the courts from time to time," that language is invalid on the ground it is vague and vests unbridled discretion in the agency. Cf. Hutchins v. Mayo, 197 So. 495, 498 (Fla.

1940)(agency rule adopting by reference regulations to be promulgated by the federal government in the future held to be invalid).

1. It is further contended that Rules 18C-21.019(1)(c)1.c. and 3. and Form No. 63-035(16) are not supported by competent substantial evidence, and thus they violate Section 120.52(8)(f), Florida Statutes (1997). The record suggests otherwise, and the rules and form are not invalid on this basis.

2. To summarize, by an appropriate quantum of proof, and with one exception, the Board has satisfied its statutory burden "to prove that the proposed rule is not an invalid exercise of delegated legislative authority as to the objections raised."

   Section 120.56(2)(a), Florida Statutes. Therefore, on all issues except one, the petitions should be denied.

3. Anderson Columbia's Exhibit 2 is received in evidence.

   
   

4. The parties have stipulated that, in the event Petitioners prevail on any issue, the undersigned should retain jurisdiction over these cases upon entry of a Final Order for purposes of determining the propriety and amount of attorney’s fees and costs, if any, to be awarded Petitioners. Because Petitioners have prevailed on one minor issue, jurisdiction is retained for the limited purpose of determining whether the agency was substantially justified in proposing the rules or whether special circumstances exist which would make the award unjust. See Section 120.595(2), Florida Statutes (1997).

Based on the foregoing Findings of Fact and Conclusions of Law, it is

ORDERED that the Petitions for Administrative Determination of the Invalidity of Proposed Rules are granted in part, and that portion of Rule 18-21.019(1)(c)10. which reads "such other things as are specified by the courts from time to time" is determined to be an invalid exercise of delegated legislative authority on the ground it violates Section 120.52(8)(d), Florida Statutes.

The petitions are denied in all other respects, and the remaining rules are determined to be valid.

DONE AND ORDERED this 11th day of August, 1998, in Tallahassee, Leon County, Florida.

DONALD R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(850) 488-9675, SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 11th day of August, 1998.

COPIES FURNISHED:

Daniel D. Richardson, Esquire

50 North Laura Street, Suite 2800 Jacksonville, Florida 32202-3650

Kenneth G. Oertel, Esquire Timothy P. Atkinson, Esquire Post Office Box 1110 Tallahassee, Florida 32302-1110

Thomas M. Shuler, Esquire Post Office Drawer 850

Apalachicola, Florida 32329-0850

Suzanne B. Brantley, Esquire David G. Pius, Esquire

Department of Environmental Protection 3900 Commonwealth Boulevard

Mail Station 35

Tallahassee, Florida 32399-3000

V. Carroll Webb, Executive Director

Joint Administrative Procedures Committee Room 120, Holland Building

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code The Elliott Building Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled to judicial review pursuant to Section 120.68, Florida Statutes. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings are commenced by filing one copy of a notice of appeal with the agency clerk of the Division of Administrative Hearings and a second copy, accompanied by filing fees prescribed by law, with the District Court of Appeal, First District, or with the district court of appeal in the appellate district where the party resides. The notice of appeal must be

filed within 30 days of rendition of the order to be reviewed.

Docket for Case No: 98-001764RP

Orders for Case No: 98-001764RP