STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ADAM M. HARDEN, )

)

Petitioner, )

)

vs. )

) DEPARTMENT OF BUSINESS AND ) PROFESSIONAL REGULATION, ) CONSTRUCTION INDUSTRY LICENSING ) BOARD, )

)

Respondent. )

Case No. 06-3912RU

)

FINAL ORDER

On November 13, 2006, a formal administrative hearing in this case was held in Tallahassee, Florida, before William F. Quattlebaum, Administrative Law Judge, Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Adam M. Harden, pro se

1611 1/2 North Howard Tampa, Florida 33607

For Respondent: Diane L. Guillemette, Esquire

Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050

STATEMENT OF THE ISSUES

The issues in the case are as follows:

1. Whether Florida Administrative Code Rule 61G4-12.017 is an invalid exercise of delegated legislative authority; and

2. Whether the committee procedure used by the Construction Industry Licensing Board to review applications for licensure is invalid as an unadopted rule.

PRELIMINARY STATEMENT

On October 10, 2006, Adam M. Harden (Petitioner) filed a rule challenge petition directed to a specific rule and to certain procedures of the Department of Business and Professional Regulation, Construction Industry Licensing Board (Respondent), which the Petitioner asserted were invalid as an unadopted rule. On October 11, 2006, the case was assigned to the undersigned Administrative Law Judge. By Notice of Hearing dated October 12, 2006, the hearing was scheduled to commence on November 13, 2006.

The parties filed separate Pre-hearing Statements on November 8, 2006. Joint stipulations of fact identified at the hearing are adopted and included within the findings of fact set forth below.

The Petitioner's Pre-hearing Statement referenced an amended petition that was filed at the same time as the Pre- hearing Statement. No motion was made to amend the petition until at the commencement of the hearing, at which time the Respondent objected to the motion. The objection was sustained, and the hearing proceeding on the issues identified in the original petition.

At the hearing, the Petitioner testified on his own behalf, and had Exhibits numbered 1 through 5 and 7 admitted into evidence. The Respondent presented the testimony of one witness and had Exhibit A admitted into evidence.

No transcript of the hearing was filed. The parties filed Proposed Final Orders on November 27, 2006, which were considered in the preparation of this Final Order.

FINDINGS OF FACT

1. The Petitioner is an applicant for licensure as a general contractor by the Respondent.

2. By operation of Subsection 489.107(4), Florida Statutes (2006),1 the Construction Industry Licensing Board (CILB) is divided into two Divisions. Division I has jurisdiction over the regulation of general contractors, building contractors, and residential contractors. Division II has jurisdiction over the regulation of all other contractors.

3. Subsection 489.107(5), Florida Statutes, provides as follows:

   Five members of Division I constitute a quorum, and five members of Division II constitute a quorum. The combined divisions shall meet together at such times as the board deems necessary, but neither division, nor any committee thereof, shall take action on any matter under the jurisdiction of the other division. However, if either division is unable to obtain a quorum for the purpose of conducting disciplinary proceedings, it may request members of the other division,

   who are otherwise qualified to serve on the division unable to obtain a quorum, to join in its deliberations. Such additional members shall vote and count toward a quorum only during those disciplinary proceedings. (emphasis supplied)

   
   

4. After the Petitioner's application was deemed complete, the application was referred to an "application committee" appointed by the CILB chairperson and assigned the responsibility of reviewing pending applications. There is no specific reference in either statute or rule codifying the application committee process.

5. The application committee generally meets one day prior to the regularly scheduled meeting of the full CILB.

   Application materials are provided to members of the application committee. An applicant receives a letter signed by an employee of the CILB providing notice of the application review committee meeting at which the pending application will be considered.

   The notice includes the following statement:

   
   

   Statute or rule does not require attendance; however, it is in your best interest to attend so those questions that may arise during the committee's review can be answered. Failure to attend may result in denial of your application as a result of

   unanswered questions.

   
   

   Applications are commonly referred to the Board for review when an applicant or the business has a criminal history, liens or judgments on their credit report, bankruptcies, complaints or unlicensed activity cases against them. If you are

   unsure why your application has been referred to the board please contact me at the number listed below. (emphasis in letter)

   
   

6. The letter clearly indicates that not all applications are reviewed by the full CILB, and accordingly, it is reasonable to presume that there are applications being approved without review by the full CILB.

7. The Petitioner's application was reviewed by an application committee on two occasions. The parties stipulated that the application committee that considered the Petitioner's application was not composed of either five Division I or five Division II Board members.

8. At the committee meeting of July 13, 2006, the Petitioner was granted a continuance apparently to obtain additional information for CILB consideration. The Order of Continuance issued by the CILB and dated August 7, 2006, stated that the Petitioner "agreed to waive the statutory 90 day requirement and appear before the Board in August, 2006."

9. On August 10, 2006, the application committee made a recommendation to the full CILB that the Petitioner's application be denied.

10. On August 11, 2006, the CILB unanimously voted to approve the committee recommendation. The parties stipulated

    that the full CILB (composed of at least five Division I and five Division II Board members) voted on August 11, 2006.

11. The extent to which the application was reviewed by the full CILB prior to the vote is unclear, as is whether all application materials were provided to the full CILB prior to consideration of the Petitioner's application. Although the Petitioner has sought to obtain a transcript of the meeting, it has not been made available by the CILB.

12. By Notice of Intent to Deny, dated August 30, 2006, the Petitioner set forth the grounds for the denial as follows:

    Applicant failed to provide proof of restitution associated with a prior order, which constitutes a basis for denial under Section 489.129(7) F.S.

    
    

13. The prior order being referenced in the August 30 letter is a Final Order of the Hillsborough County Building Board of Adjustment dated June 21, 1997, wherein the Petitioner was directed to make restitution to a former client.

    CONCLUSIONS OF LAW

    
    

14. The Division of Administrative Hearings has jurisdiction over the parties to and subject matter of this proceeding. § 120.56, Fla. Stat. (2006).

15. Section 120.52, Florida Statutes (2006), provides the following relevant definitions:

    1. "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 materially failed to follow the applicable rulemaking procedures or requirements set forth in this chapter;

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

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

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

       5. The rule is arbitrary or capricious. A rule is arbitrary if it is not supported by logic or the necessary facts; a rule is capricious if it is adopted without thought or reason or is irrational; or

       6. The rule imposes regulatory costs on the regulated person, county, or city which could be reduced by the adoption of less costly alternatives that substantially accomplish the statutory objectives.

          
          

          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 or interpret the specific 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 or is within the agency's class of powers and duties, 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 implementing or interpreting the specific powers and duties conferred by the same statute.

          
          

          * * *

          
          

          (15) "Rule" means each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule. The term also includes the amendment or repeal of a rule. The term does not include:

          1. Internal management memoranda which do not affect either the private interests of any person or any plan or procedure important to the public and which have no application outside the agency issuing the memorandum.

          2. Legal memoranda or opinions issued to an agency by the Attorney General or agency legal opinions prior to their use in connection with an agency action.

          3. The preparation or modification of:

          1. Agency budgets.

          2. Statements, memoranda, or instructions to state agencies issued by the Chief Financial Officer or Comptroller as chief fiscal officer of the state and relating or pertaining to claims for payment submitted by state agencies to the Chief Financial Officer or Comptroller.

          3. Contractual provisions reached as a result of collective bargaining.

          4. Memoranda issued by the Executive Office of the Governor relating to information resources management.

          
          

16. The Petitioner asserts that Florida Administrative Code Rule 61G4-12.0017 is an invalid exercise of delegated legislative authority because it enlarges or contravenes the

    specific law implemented. The Petitioner has the burden of establishing by a preponderance of evidence that the rule is an invalid exercise of delegated legislative authority as to the objections raised. § 120.56(3), Fla. Stat. The Petitioner has met the burden. Florida Administrative Code Rule 61G4-12.0017 expands the legislative authority provided by Section 489.129, Florida Statutes, and is therefore an invalid exercise of delegated legislative authority

17. In relevant part, Florida Administrative Code Rule 61G4-12.0017 provides as follows:

    61G4-12.017 Reinstatement and Relicensure.

    
    

    1. The Board may deny certification or registration to a contractor who has violated any of the provisions of Section 489.129(1), F.S.

       
       

    2. The Board will not reinstate the certification or registration, nor issue a new certificate or registration, of a contractor whose license has been suspended unless proof is shown that all requirements (including fines) imposed in any final order against the contractor have been met.

    
    

    (3)(a) The Board will not relicense a contractor whose certification or registration has been revoked or voluntarily relinquished until appropriate rehabilitation (to include restitution if suitable) has been shown. All provisions of any final orders entered against the contractor must be complied with.

    
    

18. The cited rule identifies Sections 489.108, 489.111, 489.113, 489.115, 489.117, and 489.129, Florida Statutes, as

    providing authority for the rule. Section 489.108, Florida Statutes, is a general grant of rulemaking authority and is insufficient to form the basis for rulemaking. Sections 489.111, 489.113, 489.115, and 489.117, Florida Statutes, are not material to this dispute.

19. As identified in the rule challenge petition and upon review of the cited statutory authority for the rule, Section 489.129, Florida Statutes, is the relevant citation. Subsection 489.129(7), Florida Statutes, is specifically cited by the Respondent as grounds for the denial of the Petitioner's application and provides as follows:

    489.129 Disciplinary proceedings.--

    
    

    (7) The board shall not issue or renew a certificate, registration, or certificate of authority to any person or business organization that has been assessed a fine, interest, or costs associated with investigation and prosecution, or has been ordered to pay restitution, until such fine, interest, or costs associated with investigation and prosecution or restitution are paid in full or until all terms and conditions of the final order have been satisfied. (emphasis supplied)

    
    

20. Review of Section 489.129, Florida Statutes, clearly indicates that the final order being addressed in Subsection (7) is a final order issued by the Construction Industry Licensing Board. The Respondent asserts that the statute and the rule are "in harmony"; however, nothing in the statute suggests that the

    reference to "the final order" would be applicable to "any final order" issued by a regulatory agency other than the CILB.

21. It should be noted that the CILB appears to have the discretionary authority to deny the application based on grounds set forth elsewhere in Section 489.129, Florida Statutes, but has not chosen to proceed on those grounds.

22. The Petitioner further asserts that the Respondent's routine referral of licensure applications to a review committee is a "rule" and is invalid because the Respondent has not codified the procedure through rule making. The Petitioner has the burden of establishing by a preponderance of evidence that the cited procedure constitutes an unadopted rule. Dravo Basic Materials Co., Inc., v. Department of Transportation, 602 So. 2d 632 (Fla. 2d DCA 1992); Florida Department of Transportation v.

    J.W.C. Company, 396 So. 2d 778 (Fla. 1st DCA 1981). The Petitioner has met the burden.

23. Section 120.60, Florida Statutes, sets forth the procedure by which applications for licensure are reviewed and either approved or denied. The statute clearly requires that the "agency" make the licensing determination. In this case, the notice provided to applicants of the committee meetings, clearly indicates that not all applications are "referred to the Board for review" and establishes that at least in some cases, the application review committee makes licensure determinations.

24. The committee procedure by which the Petitioner's application was reviewed meets the definition of a "rule" set forth at Subsection 120.52(15), Florida Statutes, because it is an agency statement of general applicability that implements Section 120.60, Florida Statutes, and describes the application approval procedure of the CILB.

25. An agency statement that is the equivalent of a rule must be adopted according to the rulemaking procedures in the Florida Administrative Procedure Act, Chapter 120, Florida Statutes. Environmental Trust, Inc. v. State Department of

    Environmental Protection, 714 So. 2d 493 (Fla. 1st DCA 1998); Christo v. State Department of Banking & Finance, 649 So. 2d 318 (Fla. 1st DCA 1995).

26. Pursuant to Subsection 120.56(4)(b), Florida Statutes, once the Petitioner establishes that the cited statement constitutes a rule, the burden then shifts to the agency to establish that rulemaking is not feasible and practicable under Subsection 120.54(1)(a), Florida Statutes, which provides as

follows:

120.54 Rulemaking.--

1. GENERAL PROVISIONS APPLICABLE TO ALL RULES OTHER THAN EMERGENCY RULES.--

   
   

   1. Rulemaking is not a matter of agency discretion. Each agency statement defined as a rule by s. 120.52 shall be adopted by the

      rulemaking procedure provided by this section as soon as feasible and practicable.

      1. Rulemaking shall be presumed feasible unless the agency proves that:

         1. The agency has not had sufficient time to acquire the knowledge and experience reasonably necessary to address a statement by rulemaking;

         2. Related matters are not sufficiently resolved to enable the agency to address a statement by rulemaking; or

         3. The agency is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address the statement.

      2. Rulemaking shall be presumed practicable to the extent necessary to provide fair notice to affected persons of relevant agency procedures and applicable principles, criteria, or standards for agency decisions unless the agency proves that:

         1. Detail or precision in the establishment of principles, criteria, or standards for agency decisions is not reasonable under the circumstances; or

         2. The particular questions addressed are of such a narrow scope that more specific resolution of the matter is impractical outside of an adjudication to determine the substantial interests of a party based on individual circumstances.

1. The Respondent presented no evidence at the hearing to establish that rulemaking is not feasible or practicable.

2. The Respondent asserts that because the Petitioner is unlicensed, the provisions of Subsection 489.107(4), Florida Statutes, are inapplicable, and that the Petitioner is not entitled to have his application addressed by a committee of Division I Board members. The assertion by the Respondent is illogical and is rejected. It is reasonable to presume that the

   Legislature intended that applications for contractor licensure would be considered by persons with appropriate credentials to make a determination as to whether or not an application should be approved. The Respondent's assertion essentially would permit an application for licensure in one contracting specialty to be reviewed by a committee that contained no one with experience or knowledge relevant to the pending application.

3. The Petitioner asserts that he is entitled to challenge the Final Order of the Hillsborough County Building Board of Adjustment upon which the Respondent has relied in denying the Petitioner's application. The Petitioner further asserts that the Respondent's apparent refusal to refer the denial of his application to the Division of Administrative Hearings for a formal administrative hearing is a violation of Subsection 120.60(7), Florida Statutes, which provides as follows:

   No agency shall include as a condition of approval of any license any provision that is based upon a statement, policy, or guideline of another agency unless the statement, policy, or guideline is within the jurisdiction of the other agency. The other agency shall identify for the licensing agency the specific legal authority for each such statement, policy, or guideline. The licensing agency must provide the licensee with an opportunity to challenge the condition as invalid. If the licensing agency bases a condition of approval or denial of the license upon the statement, policy, or guideline of the other

   agency, any party to an administrative proceeding that arises from the approval with conditions or denial of the license may require the other agency to join as a party in determining the validity of the condition.

   
   

4. The Petitioner has requested that DOAH should assume jurisdiction of the alleged factual dispute and conduct a formal administrative hearing. DOAH is without authority to assume jurisdiction over an alleged factual dispute absent a referral from the Respondent, and the Petitioner's challenge to the Hillsborough County Building Board of Adjustment order is outside the scope of this proceeding.

5. Finally, in the petition filed on October 8, 2006, the Petitioner requested an award "of reasonable fees and costs in the amount actually paid to his attorney," apparently for advice during this dispute.

6. There is no legal authority for the award of attorney's fees and costs in this case. At no point during this proceeding has the Petitioner been represented by legal counsel. The Petitioner's request for an award of fees and costs is

denied.

FINAL ORDER

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

ORDERED that:

1. Florida Administrative Code Rule 61G4-12.0017 expands the legislative authority provided by Section 489.129, Florida Statutes, and is an invalid exercise of delegated legislative authority;

2. The committee procedure by which licensure applications are reviewed and, in some cases, approved is an unadopted rule and is therefore invalid.

DONE AND ORDERED this 15th day of December, 2006, in Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 15th of December, 2006.

ENDNOTE

1/ Unless otherwise indicated, all references to the Florida Statutes shall be to the 2006 version.

COPIES FURNISHED:

Adam M. Harden

1611 1/2 North Howard Tampa, Florida 33607

Diane L. Guillemette, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050

Scott Boyd, Executive Director and General Counsel

Joint Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32399-1300

Liz Cloud, Program Administrator Administrative Code

Department of State

R. A. Gray Building, Suite 101 Tallahassee, Florida 32399

G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and

Professional Regulation Northwood Centre

1940 North Monroe Street Tallahassee, Florida 32399-0792

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 the original Notice of Appeal with the agency clerk of the Division of Administrative Hearings and a 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: 06-003912RU

Orders for Case No: 06-003912RU