STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CITY OF LAKELAND, )

)

Petitioner, )

)

vs. ) CASE NO. 86-1740RX

) DEPARTMENT OF ENVIRONMENTAL ) REGULATION, )

)

Respondent. )

)

FINAL ORDER

By agreement of the parties, this case came to be considered on October 30, 1986 via telephone conference call upon Motions for Summary Final Order filed by both parties, who were represented as follows:

Petitioner: Mark N. Miller, Esquire

Timothy J. McCausland, Esquire City Hall

Lakeland, Florida 33802

Respondent: Debra A. Swim, Esquire

Department of Environmental Regulation Twin Towers Office Building

2600 Blair Stone Road Tallahassee, Florida 32301

The City of Lakeland (City) seeks an administrative determination of the invalidity of Rules 17-50.015(2)(f) and 17 50.016(2)(f), Florida Administrative Code, which have been adopted by the Department of Environmental Regulation (Department). Both parties have filed Motions for Summary Final Order which set forth certain undisputed facts, and allege that no disputed issues of material fact exist. Memoranda have been filed and oral argument on these motions and memoranda has been allowed. Following oral argument, no additional proposed findings of fact, conclusions of law or memoranda were filed. Official recognition has been taken of all applicable Florida Statutes.

FINDINGS OF FACT

1. The City has brought this action pursuant to Section 120.56, Florida Statutes, challenging Rules 17-50.015(2)(f) and 17-50.016(2)(f), Florida Administrative Code.

   
   

2. Section 120.56(1), Florida Statutes, authorizes any person substantially affected by a rule to seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority.

3. The Department has stipulated to the City's standing to maintain this action.

4. Rules 17-50.015(2)(f) and 17-50.016(2)(f) were adopted by the Department pursuant to Sections 403.061, 403.101, 403.1823, 403.1832, 403.1838 and 403.804, Florida Statutes.

1. No disputed issues of material fact exist between the parties.

   
   

   CONCLUSIONS OF LAW

   
   

2. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this cause pursuant to Section 120.56, Florida Statutes.

   
   

3. Rule 17-50.015, Florida Administrative Code, adopts by reference certain federal regulations, and subsection (2)(f) specifically adopts 40 CFR Part 30, General Regulations for Assistance Programs; it further states that sewage treatment facility construction projects involving state grants are subject to 40 CFR Part 30. See Rule 17-50.015(2)(f)1., Florida Administrative Code.

   
   

4. In pertinent part, 40 CFR 30.535 authorizes the purchase of real property with grant funds, but provides that the grantee must assure that when grants of state funds are involved that the state's "interest is adequately reflected and protected in compliance with all recordation or registration requirements of applicable local laws on real property." Further, when such real property is no longer needed for a sewage treatment facility, the grantee must get the Department's approval to use the property for other projects or programs, or must contact the Department for instructions on how to dispose of the property. At that time, the Department may:

   
   

   1. Allow the grantee to retain title

      to the property, provided the Department is compensated for its share, or

   2. Direct the grantee to sell the property and compensate the Department for its share, less the grantee's expenses, or

   3. Direct the grantee to transfer title to the State of Florida, and then compensate the grantee based on its percentage of participation in the original cost of the project, which would then be applied to

      the current fair market value of the property.

      
      

      It should be noted that Rule 17-50.015(2) provides that in interpreting 40 CFR 30.535, terminology relating to the State of Florida is to be substituted for federal terms.

      
      

5. Rule 17-50.016(2)(f), Florida Administrative Code, provides that real property for State funded sewage treatment facility design and construction projects shall be acquired in a manner which insures that title to such land is encumbered in accordance with State and local requirements in order to adequately protect the interest of the State.

   
   

6. Section 403.061(7), Florida Statutes, states that the Department has the power and duty to adopt rules to carry out the intent and purposes of

   Chapter 403, Florida Statutes, and that such rules "adopted pursuant to this act shall be consistent with the provisions of federal law, if any, relating to . .

   . effluent limitations, pretreatment requirements, or standards of performance." Sections 403.1821 - 403.1832, Florida Statutes, are known as the Florida Water Pollution Control and Sewage Treatment Plant Grant Act, and the Department is given the authority to promulgate rules to carry out the purposes of these sections in Section 403.1823(1), Florida Statutes. Section 403.1832, Florida Statutes, designates the Department as the administrative agency of the state to apply for federal water pollution control or sewage treatment plant grants, and to do such things as are necessary to obtain such federal aid. In pertinent part, Section 403.1826 provides:

   
   

   1. Grants shall be made under Sections 403.1821 - 403.1832 for projects eligible as provided in rules of the department. Only those projects to be constructed after the effective date of this act are eligible for grants pursuant to this act.

   2. No grant may be made for any project unless such project and the plans and specifications therefor are approved by the department, subject to such requirements as the department imposes. The costs for advanced waste treatment facilities,

   or portions thereof, required for discharge to surface waters or ground water protection or protection of public health are eligible for funding.

   * * *

   (6) A grant may not be made unless the local governmental agency assures the department of the proper and efficient operation and maintenance of the project after construction. Revenue sufficient to ensure that the facility will be self-supporting shall be generated

   from sources which include, but are not limited to, service charges and connection fees. The revenue generated shall provide for financing future sanitary sewerage capital improvements. The grantee shall accumulate, during the design life of the grant-funded project moneys in an amount equivalent to

   the grant amount adjusted for inflationary cost increases.

   
   

7. The City contends that the Department lacks the statutory authority for the rules here in question, and that the rules are an invalid exercise of delegated legislative authority. It argues that the rules in question transform a grant into a loan, requiring repayment on terms and conditions not authorized by statute.

   
   

8. The Department points out that Section 403.1823, Florida Statutes, is a broad grant of rulemaking authority which allows the adoption of rules to carry out the purposes of Sections 403.1821 - 403.1832, Florida Statutes. Further, Section 403.1832 authorizes the Department to "make such applications, sign such documents, give such assurances, and do such other things as are necessary to obtain such aid" from the federal government.

9. The validity of rules normally will be sustained as long as they are reasonably related to the purpose of the enabling legislation and are not arbitrary or capricious. Florida Beverage Corporation v. Wynne, 306 So.2d 200 (Fla. 1st DCA 1975); Agrico Chemical Company v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978), cert.den. 376 So.2d 74 (Fla. 1979); Jax's Liquors, Inc. v. Division of Alcoholic Beverages and Tobacco, et al., 388 So.2d 1306 (Fla. 1st DCA 1980); Grove Isle, Ltd. v. State, Department of Environmental Regulation, 454 So.2d 571 (Fla. 1st DCA 1984). As stated by the Court in Department of Professional Regulation, Board of Medical Examiners

   v. Durrani, 455 So.2d 515 (Fla. 1st DCA 1984):

   
   

   The well recognized general rule is that agencies are to be accorded wide discretion in the exercise of their lawful rulemaking authority, clearly conferred or fairly implied and consistent with the agencies' general statutory duties.

   Florida Commission on Human Relations v. Human Development Center, 413 So.2d 1251 (Fla. 1st DCA 1982). An agency's construction of the statute it administers is entitled to great weight and is not to be overturned unless clearly erroneous.

   Pan American World Airways, Inc.,

   Florida Public Service Commission, 427 So.2d 716 (Fla. 1983); Barker v. Board of

   Medical Examiners, 428 So.2d 720 (Fla. 1st DCA 1983). Where, as here, the agency's interpretation of a statute has been promulgated in rulemaking proceedings, the validity of such rule must be upheld if it is reasonably related to the purposes of the legislation interpreted and it is not arbitrary and capricious. The burden is upon petitioner in a rule challenge to

   show by a preponderance of the evidence that the rule or its requirements are arbitrary

   and capricious. Agrico Chemical Co. v. State, Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978); Florida Beverage Corp. v. Wynne, 306 So.2d 200 (Fla.

   1st DCA 1975). Moreover, the agency's interpretation of a statute need not be the sole possible interpretation or even the most desirable one; it need only be within the range of possible interpretations. Department of Health and Rehabilitative Services v.

   Wright, 439 So.2d 937 (Fla. 1st DCA 1983) (Ervin, C. J., dissenting); Department of Administration v. Nelson, 424 So.2d 852 (Fla. 1st DCA 1982); Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238 (Fla. 1st DCA 1981). (Emphasis supplied)

   See also General Telephone Co. of Florida v. Florida Public Service Commission, 446 So.2d 1063, 1067 (Fla. 1984).

   
   

10. The party contesting the validity of a rule carries the burden of proving by a preponderance of the evidence that the challenged rule is without authority, arbitrary and capricious. Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985); Department of Natural Resources v. Sailfish Club of Florida, Inc., 473 So.2d 261 (Fla. 1st DCA 1985). In this case, the City has failed to meet this burden since the rules are not, as a matter of law, arbitrary, capricious or without authority.

    
    

11. Where, as here, an agency construes the statute in its charge in a permissible way, that interpretation must be sustained though another may be possible or even, in the view of some, preferable. State, Department of Health and Rehabilitative Services v. Framat Realty, Inc., 407 So.2d 238, 241 (Fla. 1st DCA 1981); Pan American World Airways, Inc. v. Florida Public Service Commission and Florida Power and Light Co., 427 So.2d 716, 719 (Fla. 1983). The City has failed to show that the Department's interpretative rule is clearly erroneous or unauthorized. See, Department of Revenue v. Skop, 383 So.2d 678 (Fla. 5th DCA 1980); ABC Liquors, Inc. v. Department of Business Regulation, 397 So.2d 696, 697 (Fla. 1st DCA 1981).

    
    

12. The rules in question are reasonably related to the purposes of their enabling statutes, which is to fund sewage treatment facilities and to insure that grant funds are used solely for this purpose. Land may be purchased with grant funds as long as it is an "integral part of the sewage treatment process," such as a site on which to treat sewage effluent by spray irrigation. See 40 CFR Part 30, Appendix A, adopted by reference in Rule 17-50.015, Florida Administrative Code. The rules at issue provide for the disposition of such land if it is no longer used for grant purposes. The challenged rules are reasonably related to the purposes and intent of the Florida Water Pollution Control and Sewage Treatment Plant Grant Act in that they provide an effective method of insuring that lands acquired with grant funds continue to be used for grant purposes. They are not arbitrary or capricious, and a grantee knows prior to accepting any grant that it must comply with these rules.

    
    

13. Accordingly, based on the foregoing, it is, ORDERED THAT

The City's petition seeking an administrative determination of the invalidity of Rules 17-50.015(2)(f) and 17-50.016(2)(f), Florida Administrative Code, is DENIED.

DONE AND ORDERED this 24th day of November 1986 in Tallahassee, Florida.

DONALD D. CONN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 24th day of December, 1986.

COPIES FURNISHED:

Mark N. Miller, Esquire Timothy J. McCausland, Esquire City Hall

Lakeland, Florida 33802

Debra A. Swim, Esquire Department of Environmental Regulation

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

Victoria Tschinkel Secretary

Department of Environmental Regulation

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

Mary F. Smallwood, Esquire General Counsel

Department of Environmental Regulation

Twin Towers Office Building 2600 Blair Stone Road Tallahassee, Florida 32301

Liz Cloud, Chief

Bureau of Administrative Code 1802 The Capitol

Tallahassee, Florida 32301

Carroll Webb, Executive Director Administrative Procedure Committee

120 Holland Building Tallahassee, Florida 32301

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: 86-001740RX

Orders for Case No: 86-001740RX