STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
STATE OF FLORIDA, DEPARTMENT ) OF PROFESSIONAL REGULATION, )
)
Petitioner, )
)
vs. ) CASE NO. 80-1457RP
) STATE OF FLORIDA, DEPARTMENT ) OF PROFESSIONAL REGULATION, ) BOARD OF REAL ESTATE, )
)
Respondent. )
)
FINAL ORDER
Pursuant to notice, a hearing was held before Charles C. Adams, a Hearing Officer with the Division of Administrative Hearings, on September 18, 1980.
The hearing was conducted in Room 106, Collins Building, Tallahassee, Florida.
APPEARANCES
For Petitioner: Frederick H. Wilsen, Esquire
Department of Professional Regulation 2009 Apalachee Parkway
Tallahassee, Florida 32301
For Respondent: Randy Schwartz, Esquire
Assistant Attorney General Department of Legal Affairs The Capitol, LL04 Tallahassee, Florida 32304
ISSUE
The issue here presented concerns the challenge by the Petitioner, State of Florida, Department of Professional Regulation, to the Respondent, State of Florida, Department of Professional Regulation, Board of Real Estate's video tape course rule, i.e., Rule 21V-3.08(5), Florida Administrative Code, in that portion which states: "A licensed instructor must he in attendance to conduct each quiz and review session."
The stated authority for this rules challenge is in accordance with Section 120.54, Florida Statutes, and Section 455.211, Florida Statutes. In particular, the Petitioner has alleged that:
The proposed rule goes beyond the
statutory authority of the Board of Real Estate.
The proposed rule has not been
accompanied by adequate economic impact statements as required by Subsection 120.54(2), Florida Statutes.
The proposed rule does not protect
the public from any significant and discernible harm or damages.
The proposed rule unreasonably restricts
competition or the availability of professional services in the state.
The proposed rule unnecessarily increases
the cost of professional services by the corresponding or equivalent public benefit.
FINDINGS OF FACT
On June 26, 1980, the Respondent filed a Notice of Rule Adoption of Rule 21V-3.08, Florida Administrative Code. The general text of that rule may be found in the Petitioner's Exhibit No. 1 admitted into evidence. Within that rule is found Subsection 21V-3.08(5), which establishes the requirement that a licensed instructor must conduct the quiz and review sessions of the video tape course envisioned by the subject rule. 1/ The quiz and review sessions are held in the fourth, eighth, twelfth and sixteenth sessions, with each session being constituted of a three-hour program for a total of twelve hours of live instructor time.
Rule 21V-3.08, Florida Administrative Code, was published in the Florida Administrative Weekly on July 3, 1980, in the form shown through Petitioner's Exhibit No. 1.
The rule in question had been the subject of discussion in the Respondent's monthly meeting in June, 1980, preliminary to its adoption. Again, in the meeting of July 28, 1980, the rule was discussed and offered for public comment by those parties interested in stating their positions in support of or opposition to the rule. Petitioners Exhibit No. 4 admitted into evidence is a transcript of that meeting.
In the course of the July 28, 1980, meeting, David W. Dalton, President of the Bert Rogers School of Real Estate, Inc., an organization that would be substantially affected by the proposed rule, was allowed to state his opposition to the passage of that portion of the rule mandating twelve hours of live instructor time. In essence, Dalton, in behalf of his corporation, was opposed to any mandatory requirement of more than three hours of live instructor time based upon the belief that Chapter 80-51, Section 1, Laws of Florida (1980) which created Subsection 475.451(7) Florida Statutes, did not allow for the requirement of more than three hours of live instructor time in a video tape real estate course.
In the July, 1980, meeting the Petitioner through its legal staff was also allowed to make known its opposition to the establishment of the requirement far live instructors in excess of three hours. This opposition was made known prior to the time that the final decision was reached to implement the rule's provision in question. One of the Respondent's board members also made known her opposition to passage of the rule, that being Virginia Bishop, who stated that she was in accord with the principle of having more than three
hours of live instruction but was required to act in deference to the wishes of the Florida House of Representatives, member, Carl Ogden, Vice Chairman, Regulatory Reform Committee, who expressed his opinion that the legislation, Chapter 80-51, Section 1, Laws of Florida (1980), instituting Subsection 475.451(7), Florida Statutes, would not allow for more than three hours of live instruction to be mandated by the Board of Real Estate.
Notwithstanding Mrs. Bishop's vote against the passage, the decision of the others members of the Board of Real Estate deliberating this matter, was to go forward with Rule 21V-3.08, Florida Administrative Code, leaving intact the twelve-hour requirement for live instruction.
Rule 21V-3.08, Florida Administrative Code, as it appears in Petitioner's Exhibit No. 1 was filed with the Secretary of State Office, State of Florida, on August 4, 1980. On that same date, the Petitioner petitioned the Division of Administrative Hearings for a rules challenge hearing in accordance with the provision Section 120.54, Florida Statutes, and the further authority found in Section 455.211, Florida Statutes.
Rule 21V-3.08, Florida Administrative Code, became effective on August 24, 1980.
The rule as adopted had an economic impact statement and the statement addressed the concerns of Section 455.211, Florida Statutes, and the language of the economic impact statement may be found in Petitioner's Exhibit No. 1.
The economic impact statement was prepared by the staff of the Respondent and the Board of Real Estate relied on the staff's information in adopting the rule in question, and the overall Chapter 21V-3, Florida Administrative Code.
In addition to the comments found in the economic statement appended to the rule, testimony was elicited from certain witnesses presented by the Petitioner in the course of the hearing in its effort to attack the adequacy of the economic impact statement.
The Commissioners who testified in behalf of the Petitioner, namely, Arthur M. Hamel and Virginia Bishop, did not have an in-depth knowledge of the steps which the staff undertook in preparing the economic impact statement. Hamel did indicate that from his knowledge of the situation, that if there were any increase in cost to the course participants due to the utilization of a live instructor as opposed to a video tape monitor, that he felt this would be money well spent, intimating that there would be some higher quality presentation through live instruction. Hamel also expressed concern that some of the schools that were offering real estate courses were turning out students who might not have sufficient expertise to act as a real estate professional; instead, they might be perceived as people who were able to answer examination questions only. Hamel had a concern about how this affected the public.
Mrs. Bishop testified that she felt that a live instructor should be utilized in teaching participants in the courses.
Carlos Brian Stafford testified in the hearing. Mr. Stafford is the Executive Director of the Board of Real Estate. Although Mr. Stafford was privy to the opinions expressed by Representative Ogden on the propriety of enacting a rule which would require more than three hours of live instructor participation in the real estate courses, and, made known Mr. Ogden's opinion to the Board of
Real Estate prior to the adoption of the rule in question, he was nonetheless persuaded as Executive Director that the limitation of the number of live instructor hours would enure to the detriment of the applicants for registration. Taking the course using video tape as a primary emphasis as compared to live instruction might be cheaper in initial costs, but was outweighed in the mind of Stafford because he felt that the higher number of individuals taking a real estate salesman examination would fail, thereby requiring them to purchase and participate in a two or three day review course in addition to the general course of video instruction in order to pass the examination. The two courses in turn would cost more than a general course with greater emphasis on live instruction. In response to the Petitioner's inquiry, Stafford said that no statistical study was done to determine economic impact because there was "nothing to base the study on". The witness indicated that the decision to employ twelve hours of live instruction came about through staff discussion within the Board of Real Estate.
Charles H. Hoeck, real estate education coordinator for the Petitioner, testified as witness for the Petitioner. Mr. Hoeck was the individual most responsible for the preparation of Rule 21V-3.08, Florida Administrative Code. Hoeck acknowledges that no specific comment was offered on the question of the economic impact of Rule 21V-3.08, Florida Administrative Code; however, he goes on to say that a wide range of information was reviewed on the cost and methods of preparation of video tapes. This information revealed that the cost of professionally developing a 48-hour block of technical material could run as much as $150,000.00 as contrasted with a less sophisticated operation which might cost $5,000.00. Where the actual cost for the creation of the program might be established eventually could not be determined according to Hoeck, because the type course contemplated by the rule had not been prepared before the rule adoption. As a consequence, the cost figures were not available to make the determination. Nonetheless, Hoeck concedes that twelve hours of live instruction in the video tape course will cost more than three hours of live instruction on a unit basis. This cost could be passed on to the student in the proprietary school course; not necessarily so in the community college type course.
According to Hoeck, whatever the method of instruction, the Board of Real Estate would prescribe the course content, to include 16 three-hour sessions.
Hoeck examined other instructional experiences prior to the draft of the economic impact statement related to the overall Chapter 21V-3, Florida Administrative Code, an attempt to ascertain effectiveness of live presentations as contrasted with video tape presentations. This effort was not successful in the sense that the programs reviewed at the University of Florida and University of Central Florida indicated that a video tape technique was used by way of supplement or augmentation to the live instruction as opposed to an alternative method of instruction.
Other material which Hoeck was familiar with and looked to in making the decisions related to the rule in question convinced Hoeck that video tape was less effective than live instruction. This is particularly true of persons who have less education and are older students. In this respect, 55 percent of the applicants have a high school education or less, and approximately 45 percent of those persons are over forty years old, and the latter group typically has not been involved in the educational process for a number of years. To Hoeck those persons with the limited educational background have more difficulty with video tape instruction than they do with live instruction which
allows you question and answer periods. The above referenced percentages are as applied to 50,000 persons who took the salesman's license examination in 1979 of the 75,000 people who took the introductory course in that same year.
As the petitioner's witness, Hoeck also discussed briefly the experience that the State of Georgia had with the utilization of video tapes in lieu of the traditional live instruction. Georgia found that the percentage of those passing the real estate examination went down significantly when video tapes were used. (This information about the experience in Georgia was not personally verified by Hoeck.)
If the Georgia experience were indicative of what would occur in Florida, the applicant for registration would be required to stand examination again and this would cost more money for registration and examination and it would be expected, in Hoeck's opinion, that the applicant for re-examination would take the review course in addition to the general video tape course, which would again cost more money.
The same David W. Dalton who had testified in the public hearing prior to the adoption of the rule gave testimony in the course of the hearing in the rules challenge matter. In Dalton's opinion, the video tape instruction would not achieve the same level of quality of instruction as a live instructor of the highest caliber, but it would be considerably better than what Mr. Dalton considered to be the lowest quality of live instruction, that low range being typical of the market place. Dalton stated that video tape instruction can be offered at substantial savings because of the ability to use unskilled individuals to run the video equipment as opposed to paying live instructors. Although this cost savings could be made available to the course participant, Dalton stated that the savings would be at the option of tee cool, in that the school might elect to take the savings tit the cost of the preparation of the course in the way of additional profits. Again, Dalton expressed his opinion that the enabling legislation as found in Chapter 80-51, Section 1, Laws of Florida (1980) creating Subsection 475.451(7), Florida Statutes, restricted the Board of Real Estate to a three-hour mandatory requirement for live instruction, with additional hours of live instruction being at the option of the real estate school.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action.
The Petitioner has offered as evidence correspondence from Representative Carl Ogden of the Florida House of Representatives addressed to the Petitioner's counsel which gives Mr. Ogden's opinion of what the legislature meant when it passed Chapter 80-51, Section 1, Laws of Florida (1980), containing the language that the video tape course should have a minimum of three classroom hours of live instruction, etc.
In order to accept this correspondence as evidence, it must first be determined that the language is so unclear and ambiguous that it requires an examination of legislative intent to assist in the interpretation of that statutory provision. A review of Chapter 80-51, Laws of Florida (1980), Subsection 475.451(7), Florida Statutes, does not lead to the conclusion that the language is unclear and ambiguous and where the language is, as in this case, clear and unambiguous, there is no necessity to look to statutory construction or legislative history. See American Bankers Insurance Co. of
Florida v. U.S., 265 F. Supp 67 (S.D. Fla. 1967). That language within the subject provision which says, "Video tape course shall have a minimum of three classroom hours of live instruction by a currently licensed instructor", sets the minimum requirement which the Board must implement in passing the necessary rules to effect the purposes of this legislation. It leaves open the opportunity to require a greater number of hours of live instruction if the Board of Real Estate deems this to be appropriate. Therefore, the admission of the Petitioner's Exhibit No. 1 into evidence is denied. See, also, Marchese v. United States, 126 F. 2d 671 (5th Cir. 1942) and Board of Commissioners of State Institutions v. Tallahassee Bank and Trust Co., 108 So.2d 74 (Fla. 1st DCA 1958).
As additional reason for the denial of the admission of the letter, a document of this sort offered from a single member of the Legislature should not be allowed as evidence to establish legislative intent. See McLellan v. State Farm Mutual Automobile Insurance Company, 336 So.2d 811 (Fla. 4th DCA 1979)
Finally, the contents of the letter in question could not be the subject to cross-examination in the course of the hearing, even if the letter is deemed to be an authentic representation of Mr. Ogden's position on this subject. Therefore, the correspondence is not admissible.
As indicated in the issues statement of this order, the Petitioner has premised its attack on the stated portion of Rule 21V-3.08(4), Florida Administrative Code, on the ostensible authority found in Section 120.54, Florida Statutes, and Section 455.211, Florida Statutes. In the course of the hearing, argument was entertained on the question of whether this was indeed a Section 120.54, Florida Statutes, attack on a proposed rule or a Section 120.56, Florida Statutes, attack on an adopted rule. After considering that argument, it was determined that it was a Section 120.56, Florida Statutes, action and the case was allowed to go forward on that basis. This conclusion was reached based upon the fact that Subsection 120.54(4), Florida Statutes, requires a petitioner to file its request seeking the determination of rules validity before the Division of Administrative Hearings within fourteen days of the publication of the notice of intended action in the Florida Administrative Weekly. The publication being made on July 3, 1980, and the Petition being filed August 4, 1980, that Petition was not a timely challenge to the proposed rule; nevertheless, in keeping with the authority of Section 455.211, Florida Statutes, the Department of Professional Regulation may bring a Section 120.56, Florida Statutes, challenge to rules as adopted by the various boards over which the Department has authority. In this connection, the question of the Petitioner's ability to attack the economic impact statement of the Respondent on this occasion was also discussed, but a ruling was not made. Having considered the position of the parties and in keeping with the provision of Subsection 120.54(2)(c), Florida Statutes, the Petitioner is allowed to attack the economic impact statement since the Petition in this cause was filed within one year of the effective date of the rule, that effective date being August 24, 1980, and it may do so in the context of a Section 120.56, Florida Statutes, hearing.
In substance, the Petition as now filed attacks that aforementioned language of Rule 21V-3.08, Florida Administrative Code, as being an invalid exercise of delegated legislative authority and premised upon the alleged inadequacy of the economic impact statement and the assertion of those independent grounds found in Subsection 455.211(1), Florida Statutes. 3/
To be successful in its attack on the rules provision on the ground that the provision is an invalid exercise of delegated legislative authority, the Petitioner must demonstrate that the rule provision in question is not reasonably related to the purpose of the enabling legislation or that the rule is arbitrary and capricious in its effect. See Florida Beverage Corn., Inc. v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975).
The authority for the passage of Rule 21V-3.08(5), Florida Administrative Code, includes Chapter 80-51, Section 1, Laws of Florida (l980),adding Subsection 475.451(7), Florida Statutes. That enabling legislation contains the aforementioned reference to the requirement of a minimum of three classroom hours of live instruction by a currently licensed instructor and it is this provision which the Respondent used as a basis for requiring: "A licensed instructor must be in attendance to conduct each quiz and review session." Rule 21V-3.08(5), Florida Administrative Code, supra. When this portion of the rule is read in the context of the discussion of the 16 three-hour blocks of instruction and the review and quiz session in the fourth, eighth, twelfth and sixteenth sessions, this adds up to a total of twelve hours of live instruction which would be required by the rule. For reasons as stated in paragraph two (2) to these Conclusions of Law, the requirement of twelve hours of live instruction is not contrary to the purposes of the enabling legislation which establishes a minimum acceptable number of live instructional hours, leaving it to the discretion of the Board of Real Estate to more specifically establish the number of hours that it would feel to be necessary. The Board of Real Estate took this opportunity and it found that the creation of a twelve-hour requirement is reasonably related to the purpose of the enabling legislation. Moreover, the operation of the rule and its effect is not arbitrary and capricious.
Having decided that the provision of the rule in question is sufficiently related in principle to the enabling legislation, it must be determined whether the Petitioner can be successful in its challenge to the rule's provision based upon the alleged inadequacy of the economic impact statement.
Subsection 120.54(2)(c), Florida Statutes, states that a rule may be held invalid if the rule's authors fail to provide an adequate statement of economic impact. Following this line of reasoning, the First District Court of Appeal, in Dept. of Health and Rehab. Serv. v. Delray Hosp. Corp., 373 So.2d 75 (1st DCA 1979) held that an agency must have an economic impact statement for the rule in question to be upheld. This opinion was followed by that Court's pronouncement in School Board of Broward County v. Gramith, 375 So.2d 340 (1st DCA 1979) in which the Court referred to Subsection 120.68(8), Florida Statutes, in determining the form of relief that could be granted the party challenging a rule which did not have an economic impact statement. In looking to that section of the Administrative Procedures Act, the Court concluded that the success of a rules challenge based upon the failure to provide an economic impact statement would be determined by looking at the fairness of the rules making proceeding or the correctness of the action and decide if these matters had been impaired. In other words, the Court was advancing a harmless error form of test and if the activities involved in the passage of the rule were found to be fair and correct, then the lack of the economic impact statement would not be fatal, particularly so when the enabling legislation did not seem to suggest a viable technique for preparing the economic impact statement. In Gramith, supra, the creation of school boundaries was not deemed to be a pursuit in which the preparation of an economic impact statement was crucial to the validity of the rule.
In Florida-Texas Freight v. Hawkins, 379 So.2d 944 (Fla. 1980), a statement of the Florida Public Service Commission in one of its rules that no economic impact would result from the rule was found to be sufficient treatment of the economic impact statement requirement. The Court in that case also exposed the opinion that the challenger to a rule must show that there is economic impact from the adoption of the rule and that some prejudice will occur as a result of the rule's adoption. The Court went on to say that it was not necessary to track various subsections of the economic impact statement preparation clause found in Section 120.54, Florida Statutes, to be in compliance with its terms. It is only necessary to provide substantial compliance.
When the Petitioner's proof on the question of the economic impact statement adequacy is measured against the statutory requirements and the case law discussion, the Petitioner has failed in its burden.
While it is uncontroverted that the economic impact statement in this matter was primarily designed to speak to the overall Chapter 21V-3, Florida Administrative Code; taking into account the opportunity for the public to participate in the promulgation of the rule, the apparent parallel between the purposes of the enabling statute and the rules provision, the unavailability of meaningful data in determining the probable economic impact of the utilization of more live instructor hours as contrasted with video tape instruction hours, the expectation of higher failure rate for examinees standing the real estate salesman's examination following video tape instruction as contrasted with the former live instruction, thereby leading to additional costs for re-examination and refresher course, and the fact that these positions were advanced by those witnesses presented in behalf of the Petitioner, the economic impact statement requirement of Section 120.54, Florida Statutes, has been met.
For reasons as discussed before, the Petitioner has failed to show that the rules provision in question does not protect the public from any significant discernible harm or damages; unreasonably restricts competition or the availability of professional services in the state or a part of the state, or unnecessarily increases the cost of professional services without corresponding or equivalent benefit, as stated in Subsection 455.211, Florida Statutes.
In summary, the Petitioner has failed to successfully establish that Rule 21V-3.08, Florida Administrative Code, in that provision which states, "A licensed instructor must be in attendance to conduct each quiz and review session," is an invalid exercise of delegated legislative authority; that the economic impact statement is inadequate; or that the rule is invalid for any of the reasons as stated in Subsection 455.211(1), Florida Statutes. Therefore, that provision of the rule which is the subject of attack through this Petition is held to be VALID. 4/
DONE AND ENTERED this 7th day of November, 1980, in Tallahassee, Florida.
CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings
101 Collins Building Tallahassee, Florida 32301 (904) 488-9675
FILED with the Clerk of the Division of Administrative Hearings this 7th day of November, 1980.
ENDNOTES
1/ "21V-3.08 PRELICENSING EDUCATION FOR BROKER AND SALESMAN APPLICANTS. (5)
Course content and level of instruction of a video tape course shall be the same as that contained in the Board prescribed Course I syllabus and Instructor's Guide. This Board prescribed course is structured sequential presentation in sixteen (16) three-hour sessions. A one (1) hour quiz and session review is prescribed for each session. For video presentation, the 4th, 8th, 12th and 16th sessions are prescribed as review and quiz sessions. As an example, the 4th session shall be used to administer a quiz and review the first three sessions. A licensed instructor must be in attendance to conduct each quiz and review session. In addition, whenever the video tape is not current with the latest law or real estate practice, the tape must be corrected prior to its use in the classroom or a licensed instructor must be in attendance during the affected portion of that session."
2/ "Chapter 80-51, Section 1, Laws of Florida (1980): Any course prescribed by the board as a condition precedent to any person becoming initially licensed as a salesman may be taught in any real estate school through the use of a video tape of instruction by a currently licensed instructor from any school provided, however, that any such video tape course , shall have a minimum of three classroom hours of live instruction by a currently licensed instructor from any such school. All other prescribed courses, except the continuing education course required by 475.182, shall be taught by a currently licensed school instructor personally in attendance at such course. The continuing education course required by 475.182 may be taught by an equivalent correspondence course; provided, however, that any such course of correspondence shall be required to have a final examination, prepared and administered by the school issuing such correspondence course. The continuing education requirements provided herein or provided in any other section in this chapter shall not apply with respect to any attorney who is otherwise qualified under the provisions of this chapter."
3/ "455.211 Board rules; final agency action; challenges.--
The secretary of the department shall have standing to challenge any rule or proposed rule of a board pursuant to ss. 120.54 and 120.56. In addition to challenges for any invalid exercise of delegated legislative authority, the hearing officer, upon such a challenge by the secretary, may declare all or part of a rule or proposed rule invalid if it:
Does not protect the public from any significant and discernible harm or damages;
Unreasonably restricts competition or the availability of professional services in the state or in a
significant part of the state; or
Unnecessarily increases the cost of professional ser- vices without a corresponding or equivalent public benefit.
However, there shall not be created a presumption of the existence of any of the conditions cited in this subsection in the event that the rule or proposed rule is challenged."
4/ The Petitioner in the person of its counsel has offered Proposed Findings of Fact, Conclusions of Law and a Recommendation. These matters have been reviewed prior to the entry of this Order. To the extent that the proposals are consistent with this Order, they have been utilized. To the extent the proposals are inconsistent with this Order, they are hereby rejected.
COPIES FURNISHED:
Frederick H. Wilsen, Esquire Carroll Webb, Executive Director Department of Professional Administrative Procedures
Regulation Committee
2009 Apalachee Parkway Room 120, Holland Building Tallahassee, Florida 32301 Tallahassee, Florida 32301
Randy Schwartz, Esquire Ms. Liz Cloud Assistant Attorney General Department of State Department of Legal Affairs Room 1801, The Capitol
The Capitol, LL04 Tallahassee, Florida 32301 Tallahassee, Florida 32301
Nancy Kelley Wittenberg, Secretary Department of Professional
Regulation
2009 Apalachee Parkway
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Nov. 07, 1980 | CASE CLOSED. Final Order sent out. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 07, 1980 | DOAH Final Order | Petitioner's rule about videotaped real estate lectures for licensing is valid. |
