STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LEE ANN FLAGG, )

)

Petitioner, )

)

vs. ) CASE NO. 93-2297RU

) DEPARTMENT OF HEALTH AND ) REHABILITATIVE SERVICES, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Errol H. Powell, held a formal hearing in this case on June 21, 1993, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Cindy Huddleston, Esquire

Anne Swerlick, Esquire Florida Legal Services, Inc. 2121 Delta Boulevard

Tallahassee, Florida 32303

For Respondent: Katrina M. Saggio, Esquire

Department of Health and Rehabilitative Services

Building 6, Room 466

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700 STATEMENT OF THE ISSUES

The issues are (1) whether Respondent's Rule 10C-32.002(4), caseload prioritization rule, constitutes an invalid exercise of delegated legislative authority and (2) whether Respondent has violated Section 120.535, Florida Statutes, by adoption of a child care freeze policy, which meets the definition of a rule under Section 120.52(16), Florida Statutes, without complying with the rulemaking procedures established by Section 120.54, Florida Statutes.

PRELIMINARY STATEMENT

This proceeding is a rule challenge (1) brought under the provisions of Section 120.56, Florida Statutes, to challenge the validity of Respondent's Rule 10C-32.002(4), Florida Administrative Code, a caseload prioritization rule which allows Respondent's districts, under specified guidelines, to prioritize their Project Independence (PI) caseload for providing services before turning away AFDC receipts who volunteer to participate in the PI program in situations where the PI staff/client ratio exceeds 1:150; and (2) brought under the provisions of

Section 120.535, Florida Statutes, seeking an administrative determination that Respondent has violated the provisions of Section 120.535(1), Florida Statutes, by adopting a policy, i.e., child care freeze policy, which meets the definition of a rule, without complying with the rulemaking procedures established by law. The challenged child care freeze policy purports to be as follows:

Due to the large over annualization we are projecting for FY 92-93 in Service I, Ser- vice II and Family Support Act child care services, I am directing you to immediately freeze new enrollments except for entitled groups (TCC and AFDC Employed) and the high- est at-risk group (Priority 1 in Service I). We will closely monitor utilization and let you know as soon as spending is within budget limits.

This freeze applies to new enrollments only. Children currently in care should continue to receive services as appropriate.

At the hearing the parties filed a prehearing stipulation, and without objection from Respondent, Petitioner filed an amended petition, changing her position only to the extent that the caseload prioritization rule was not unpromulgated. Petitioner presented no witnesses and entered 11 exhibits into evidence without objection. Respondent presented the testimony of four witnesses. Further, Respondent offered seven exhibits, five of which were received into evidence.

The transcript was filed on June 29, 1993, and the parties filed proposed final orders on July 15, 1993, which have been addressed in the appendix to this final order.

FINDINGS OF FACT

Petitioner

1. Petitioner, Lee Ann Flagg, is a 22-year-old resident of Tallahassee, Leon County, Florida. Since 1991, she has received Aid to Families with Dependent Children (AFDC) benefits for her 22-month-old son.

   
   

2. Petitioner wants to learn a marketable skill, so she can obtain a job and stop receiving AFDC. Based on the information in Petitioner's AFDC case file, her total income was her AFDC grant of $241 per month.

   
   

3. Petitioner is exempt from Job Opportunities and Basic Skills (JOBS) program due to the age of her child.

   
   

4. On May 26, 1992, Petitioner volunteered for Project Independence (PI). On June 5, 1992, Petitioner attended PI orientation at which she stated her desire to attend school in the fall of 1992.

   
   

5. At all times material hereto, Petitioner met PI target group criteria in that she is under the age of 24 and had not been employed for the past 12 months.

6. On July 28, 1992, Petitioner requested child care assistance from Respondent. She advised her PI case manager that the lack of child care was a barrier to her being self-sufficient and that she needed child care to attend school in the fall of 1992.

   
   

7. In July 1992, Petitioner's case manager informed Petitioner that, due to the child care freeze, Respondent could not provide her with child care and placed Petitioner in "limited contact." During the time in "limited contact," Petitioner provided monthly attendance verification to her PI worker until February 1993.

   
   

8. In August 1992, Petitioner enrolled in business classes at Lively Area Vocational Technical School (Lively) in Tallahassee, Leon County, Florida. Needing child care assistance, Petitioner's parents assisted her with child care temporarily.

   
   

9. In February 1993, because Respondent could not provide Petitioner with child care, she requested disenrollment from the PI program. However, Petitioner can re-enroll in the PI program at any time.

   
   

10. Petitioner continues to attend classes at Lively. But, due to her inability to obtain child care services from Respondent, she has been forced to reduce her classes. Additionally, Petitioner has taken a part-time clerical job at below poverty wages, for which she receives child care.

    
    

11. Because of the child care freeze, Petitioner cannot receive child care assistance from Respondent for education and training activities.

    
    

    Background

    
    

12. The Aid to Families with Dependent Children (AFDC) Program is a joint federal-state assistance program authorized by Title IV-A of the Social Security Act, 42 U.S.C. Section 602. The AFDC program is administered by states under the supervision of the Federal Department of Health and Human Services.

    
    

13. A "Job Opportunities and Basic Skills" (JOBS) program must be developed by each state participating in the AFDC program. The purpose of the JOBS program is to provide training, education and work opportunities for AFDC recipients, pursuant to the Family Support Act of 1988, that will help avoid long-term public assistance dependency.

    
    

14. Supervision of the JOBS program and contracting for the provision of support services, such as child care, is the responsibility of the state agency administering the AFDC program (referred to as the IV-A agency).

    
    

15. In Florida, Respondent is the IV-A agency, and the Department of Labor and Employment Security administers the JOBS program.

    
    

16. Florida's JOBS program is called Project Independence (PI). The criteria governing PI is found in Section 409.029, Florida Statutes, the Florida Employment Opportunity Act.

    
    

17. For PI purposes, all AFDC recipients are either exempt or nonexempt from participating in PI and are either target group or non-target group members.

18. Exempt recipients are persons who have barriers to participating in PI, such as having young children or being disabled, based on federally defined exemption criteria. These recipients are not required to participate in PI, but may volunteer to participate.

    
    

19. Nonexempt recipients are persons who do not meet the federal exemption criteria and are referred to as mandatory. These recipients may be referred to PI by their Respondent caseworker, and if referred, they are required to participate in PI as a condition of receiving AFDC, so long as resources are available. Conversely, if resources are not available, a nonexempt referred recipient is not required to participate in PI, but may volunteer to participate in PI. Furthermore, even if a nonexempt recipient is not referred to PI, such recipient may volunteer to participate in PI.

    
    

20. Target group members are AFDC recipients who, based on certain characteristics such as work history or number of years already on AFDC, are likely to become long-term public assistance recipients.

    
    

21. Non-target group members are AFDC recipients who do not meet target group criteria.

    
    

22. Both target group members and non-target group members may be either exempt or nonexempt.

    
    

    Caseload Prioritization Rule

    
    

23. Participation requirements for AFDC recipients in PI is set forth in Section 409.029, Florida Statutes, the Florida Employment Opportunity Act.

    
    

24. In April 1992, Respondent promulgated Rule 10C-32.002 AFDC Employment and Training Program, Florida Administrative Code, implementing Section 409.029, Florida Statutes. Section (4) of Rule 10C-32.002, referred to as the caseload prioritization rule, sets forth Respondent's PI caseload prioritization procedures, implementing Subsection 409.029(9)(c), Florida Statutes. Subsection 409.029(9)(c) states:

    
    

    (9) PARTICIPATION REQUIREMENTS

    
    

    (c) All exempt and nonexempt AFDC recipients who do not meet target group criteria shall be permitted to volunteer. Nonexempt AFDC recipients who meet target group criteria shall be required to participate in the pro- gram. Exempt AFDC recipients who meet target group criteria shall be permitted to volun- teer. If the department lacks resources to provide the services necessary for participa-

    tion under this section, nonexempt AFDC recip- ients who do not meet the target group crit- eria shall be required to participate in in- itial job search if they are approved for ini- tial job search, but shall be deferred from further participation after completing up to

    3 weeks of job search activities. If the department continues to lack resources to pro- vide the services necessary for participation under this section, nonexempt recipients who

    do not meet target group criteria and who are not approved for initial job search shall also be deferred from further participation after completing orientation. If deferring such recipients from mandatory participation does not alleviate budget constraints on ser- vices, the department shall defer nonexempt AFDC recipients who do not meet target group criteria from mandatory participation and may also defer participants who meet target group criteria from mandatory participation so long

    as the department is meeting federal particip- ation rates and target group expenditure re- quirements. If the department cannot, after making a good faith effort, meet federal part- icipation rates and target group expenditure requirements by deferring nonexempt target group AFDC recipients from participation, the department may limit service to AFDC recip- ients who meet target group criteria and may mandate the participation of those target group members who are non-target-group volun- teers only after the department has attempted to conserve its resources under the proce- dures established in this section.

    (Emphasis added.) Rule 10C-32.002(4) states:

    1. Effective October 1, 1991, the Florida Employment Opportunity Act, F.S. 409.029, was revised to allow the department to prioritize and disenroll participants based on target groups and assessment status where funds are insufficient to serve all partici-

       pants. Caseloads may be reduced to allow for sufficient case management when they exceed a staff/client ratio of 1:150. Staff/client ratios for the teen parent caseload should not exceed 1:100. Each district will init- iate case load disenrollment procedures as needed.

       1. Case managers must identify three cate- gories of participants in their caseloads: Priority One, exempt volunteers; Priority Two, mandatory target group participants; and Priority Three, mandatory non-target group participants.

       2. When caseloads exceed a staff/client ratio of 1:150, all Priority Three cases, mandatory non-target participants, will be offered an opportunity to continue partici- pation or disenroll.

          1. Priority Three participants who wish to continue in the program must be allowed to do so and will be placed in Priority One category.

          2. Priority Three participants who do not wish to continue in the program should be disenrolled after Orientation, and Job Search if the participant meets the criteria for Initial Job Search. To reach or main- tain the 1:150 staff/client ratio, new mand- atory non-target referrals may be disen- rolled after Orientation, and Job Search, if applicable, if they do not wish to continue to participate.

       3. If the staff/client ratio remains above 1:150 after disenrollment of Priority Three cases, then all Priority Two, mandatory tar- get groups may be allowed the opportunity to disenroll from the program after Orientation, and Job Search, if applicable.

       4. Information about disenrollment and re- entry into the program must be provided, verbally and in writing, to each participant being given these opportunities. This infor- mation must include:

          1. A participant who is given the opport- unity to disenroll will not be sanctioned, nor will disenrollment affect the AFDC grant amount.

          2. An individual who disenrolls may re- enroll in the program at a later date by con- tacting the local AFDC employment and train- ing office.

          3. An individual who disenrolls and becomes employed may be eligible for child care dur- ing the hours of employment and should con- tact the AFDC employment and training case manager.

          4. A participant who is given the opport- unity to disenroll and chooses to continue participating in the AFDC employment and training program can do so.

          5. A participant who does not meet an exemp- tion from program participation and who chooses to remain in the program although given the opportunity to disenroll can be sanctioned for failure to complete assigned activities.

          6. A participant who does not meet an exemp- tion from program participation and chooses to disenroll may be required to re-enter the program at a future date. Failure to do so without good cause will cause a sanction to

             be imposed.

          7. Support Services will be terminated for a participant who chooses to disenroll unless the individual is employed.

       5. If new referrals are not sufficient to maintain the staff/client ratio of 1:150, disenrolled cases should be identified for program re-entry. Program re-entry will be

          based on continuing eligibility for AFDC, priority group status, and length of time since disenrollment. The first individual disenrolled from the highest priority group will be re-enrolled first, etc.

       6. If the state fails to meet the feder- ally required expenditure rate for target groups, participation in the program may be limited to and required for target group members. (Emphasis added)

          
          

25. The caseload prioritization rule only applies in situations in which PI staff/client ratio exceeds 1:150; staff meaning case manager.

    
    

26. Respondent contends that Subsection 409.029(9)(c), Florida Statutes, was needed for the determination as to when PI's resources were sufficient to provide services to clients. In the caseload prioritization rule, Respondent interprets the statutory phrase "lacks resources" as the point at which the staff/client ratio exceeds 1:150. Respondent's districts meet this "limited resources" point when the staff/client ratio exceeds 1:150.

    
    

27. The factors considered in the measuring stick used by Respondent to determine the limited resources were staff allocations and staff availability to provide services. Child care was not included, since it was, and is, a support service as interpreted by Respondent from Subsection 409.029(7), Florida Statutes.

    
    

28. At the time Subsection 409.029(9)(c) was passed by the Florida Legislature, the staff/client ratio exceeded 1:400 and 1:500 in some of Respondent's districts. Respondent determined that a ratio exceeding 1:150 prevented a case manager from providing the services needed for clients, i.e., spending the amount of time needed, and that the lack of time, translating into the lack of services needed, could affect Respondent's PI federal funding.

    
    

29. Respondent contends that the caseload prioritization rule was necessary for the administration of Subsection 409.029(9)(c). The rule in Respondent's view provided and clarified the procedures to be used for the disenrollment of clients to reduce caseloads.

    
    

30. Respondent further contends that the caseload prioritization rule was necessary for the proper administration of Subsection 409.029(7), Florida Statutes, which Respondent interprets as applicable to the offering of child care services. According to Respondent, the rule gave Respondent the ability to identify specific reasons to defer individuals from participation in the PI program.

    
    

31. On July 10, 1992, Respondent's caseload prioritization procedures were issued statewide and were generally applicable to all PI participants in Respondent's districts. Notwithstanding, because the staff/client ratio did not exceed 1:150 in Respondent's District 2, the procedure was not utilized in District 2.

    
    

32. The caseload prioritization procedures were not invoked prior to instituting the child care freeze in Respondent's District 2.

    Child Care Freeze

    
    

33. For the 1992-93 fiscal year, the Florida Legislature failed to appropriate sufficient funds to meet the needs of PI child care in Respondent's District 2. Subsequently, again, for the 1993-94 fiscal year, the Legislature did not appropriate sufficient funds.

    
    

34. On July 10, 1992, Respondent issued a memorandum, effective that same date, freezing child care in Respondent's District 2 only for new enrollments of AFDC recipients who wished to participate (volunteers) in PI education and training activities and who needed child care in order to participate. The challenged child care freeze policy purports to be as follows:

    
    

    Due to the large over annualization we are projecting for FY 92-93 in Service I, Ser- vice II and Family Support Act child care services, I am directing you to immediately freeze new enrollments except for entitled groups (TCC and AFDC Employed) and the high- est at-risk group (Priority 1 in Service I). We will closely monitor utilization and let you know as soon as spending is within bud- get limits.

    
    

    This freeze applies to new enrollments only. Children currently in care should continue to receive services as appropriate.

    
    

    Respondent instituted the child care freeze because of projected annualized budget deficits; that is, Respondent annualized its current PI child care expenditures and projected a budgetary deficit if expenditures increased beyond what was currently spent.

    
    

35. The child care freeze did not affect Transitional Child Care (TCC) recipients and AFDC recipients who work. Transitional Child Care is child care for former AFDC recipients who lost their AFDC eligibility due to earned income and who meet other federal requirements. TCC and AFDC employed individuals are guaranteed child care. Also, the child care freeze did not affect those individuals who Respondent requires to participate in PI.

    
    

36. Respondent's District 2 is divided into two districts: Subdistrict 2A and Subdistrict 2B. Subdistrict 2A is comprised of Bay, Calhoun, Franklin, Gulf, Holmes, Jackson and Washington counties. Subdistrict 2B is comprised of Franklin, Gadsden, Jefferson, Leon, Liberty, Madison, Taylor and Wakulla counties.

    
    

37. Child care services are provided through contract with central agencies. Two child care provider agencies serve Respondent's District 2: Big Bend Child Care, serving Subdistrict 2B and Early Childhood Services, serving Subdistrict 2A. PI child care monies are split between the two provider agencies.

    
    

38. Due to the child care freeze, from July 10, 1992, no AFDC recipient in Subdistricts 2A and 2B, who needed child care for education and training, received it. However, on January 19, 1993, child care slots became available in Subdistrict 2A with Early Childhood Services.

39. On January 19, 1993, Early Childhood Services had 318 children of AFDC recipients on a waiting list. Only 35 slots became available. On March 15, 1993, Respondent allowed Early Childhood Services to provide child care services on a "one-in one-out" basis--equal number of child care slots filled as are vacated.

    
    

40. As of January 1993, in Respondent's District 2, 542 children of AFDC recipients were waiting to receive child care services. Approximately 70 of the children, all residing in Subdistrict 2A, have been placed since January 19, 1993.

    
    

41. For the offering of child care services, Respondent looks to both Subsection 409.029(7), Florida Statutes, and Rule 10C-32.002(10)(b)2, Florida Administrative Code, for guidance as to what action to take when child care resources are limited. Respondent contends that Subsection 409.029(7) is applicable to child care services. Subsection 409.027(7) includes child care services as a support service and provides that child care services "shall be provided according to federal law to the extent funds are available." Rule 10C- 32.002(10)(b)2 provides that a PI participant, meeting the requirements for a deferred status and not required to participate, "will be placed in limited contact status" due to the "temporary unavailability of support services."

    
    

42. In August 1992, Respondent conferred with the regional office of the federal agency overseeing the AFDC program, regarding the subject of guaranteeing child care to AFDC recipients as it relates to availability of funds. Respondent and the federal agency agreed to certain principles on the subject, which included the following:

    
    

    "To the degree resources are available" is acceptable as a factor in limiting participa- tion in a program component when child care is a determining factor (other than AFDC-emp- loyed and TCC).

    
    

    The state may determine the criteria for those required and/or allowed to participate in the program as long as the state meets the federal participation rate and target group expenditure requirements.

    
    

    [W]hen a state finds itself without sufficient resources, including child care resources, it may place individuals on a waiting list. Before placing an individual on a waiting list, the individual will be given an opportunity to make provisions for her own child care, or other services, in order to remain in the program.

    
    

    [W]ith the exception of AFDC-employed and TCC, the guarantee of child care to both JOBS and non-JOBS participants is directly tied to the conditions under which the participant is required or allowed to participate. One clear and explicit condition is the extent

    to which state resources permit such partic pation.

43. Respondent interprets Florida law, as it relates to budgeting, that the law requires Respondent not to exceed its budget. To stay within its budget, Respondent instituted the child care freeze instead of the other available options which would involve the disenrollment of children already in care, including the entitled groups. The child care freeze required Respondent to constantly be aware of the status of the child care budget (on a monthly basis) due to its constant fluctuation.

    
    

44. Also, in administering the child care freeze, Respondent interprets the federal law and Subsection 409.029(9)(c), Florida Statutes, to state that it is not required to provide child care to volunteers of the PI program. But, even with this interpretation, volunteers for the PI program are not denied participation in the PI program during child care constraints. An individual who does not need child care, or even one who does need child care but can provide it through other means can volunteer for participation in the PI program. No child care will be provided, but the participants can receive other services associated with the PI program.

    
    

45. The child care freeze was never promulgated pursuant to Section 120.54, Florida Statutes.

    
    

    CONCLUSIONS OF LAW

    
    

46. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings. Sections 120.56 and 120.535, Florida Statutes.

    
    

    Caseload Prioritization Rule

    
    

47. To prevail in this case on the caseload prioritization rule, the burden is upon Petitioner to demonstrate that the rule is an invalid exercise of delegated legislative authority. Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985), and Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978). An invalid exercise of delegated legislative authority is defined by Subsection 120.52(8), Florida Statutes, which provides in pertinent part:

    
    

    (8) "Invalid exercise of delegated legisla- tive authority" means action which goes

    beyond the powers, functions and duties dele- gated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one or more of the following apply:

    1. The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(7);

    2. The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(7);

    * * *

    
    

48. First, Petitioner contends that Rule 10C-32.002(4), Florida Administrative Code--caseload prioritization rule--is invalid because, it enlarges, modifies, or contravenes Subsection 409.029(9)(c), Florida Statutes, by limiting the application of Subsection 409.029(9)(c) only in situations where

    the staff (case manager)/client ratio exceeds 1:150. Next, Petitioner contends that the subject rule is invalid because Respondent exceeded its grant of rulemaking authority because it allows Respondent "to deny services to volunteers due to budgetary constraints without first prioritizing its caseload." Pertinent to this case, Respondent's rulemaking authority is derived from Subsection 409.026(8), Florida Statutes, which provides:

    
    

    (8) The department shall promulgate rules as necessary for the proper administration of this chapter.

    * * *

    
    

    Subsection 409.029(9)(c), Florida Statutes, requires Respondent, to allow AFDC recipients to volunteer in the Project Independence (PI) program and to prioritize the PI participants in order to "alleviate budget constraints on services."

    
    

49. Subsection 409.029(2), Florida Statutes, delineates the legislative findings and intent of Chapter 409, Florida Statutes, and, pertinent to this case, states:

    
    

    1. Applicants for, and recipients of, public assistance desire to work, and will do so if provided with the opportunity.

       * * *

       (d) Integration and coordination of current federal, state, and local programs designed

       to provide public assistance recipients with opportunities for economic self-support or productivity are essential in order to avoid a waste of tax dollars and human resources.

       (f) Public assistance applicants and recip- ients shall be provided an opportunity to be- come economically self-supporting or produc- tive members of society through a carefully planned, integrated and coordinated system of employment-related services offering a full range of employment, training and supportive services, consistent with the needs of the participants, that allows for informed choices in order to meet the employment goals of the participants.

       (i) In order to accomplish the aforement- ioned goals, these principles shall be foll- owed:

       1. The department's employment and training program for AFDC applicants and recipients shall target those who:

       * * *

       d. Are custodial parents under 24 years of age who have worked less than 4 months of the preceding 12 months or as otherwise defined by federal regulation.

       * * *

       4. Expenditures shall be targeted to parti- cipants described in subparagraph 1;

50. It is clear that the legislature intended for public assistance recipients to receive the necessary "services" to become "economically self- supporting or productive members of society."

    
    

51. Further, Subsections 409.029(6) and 409.029(7), Florida Statutes, read in pari materia, shows that "services" include employment and training program activities and support services, which includes child care.

    
    

52. Subsection 409.029(10), Florida Statutes, provides in pertinent part that case management includes:

    
    

    [T]he development, with the participant, of an employment plan; . . . providing assist- ance in obtaining support services; brokering access to job training and education and arranging for services; . . . providing

    assistance to the participant at any time during the participation; . . . and providing assis- tance in maintaining continued support

    services when the participant moves into unsub- sidized employment. Case management shall ensure that all necessary program components and services are being made available to the participant and that any difficulties are addressed at the onset to provide for the smoothest transition from assistance to selfsufficiency for the participant. . . .

    
    

    Respondent asserts that its resources in this situation are the case managers and the time that they are able to devote to each client to provide the necessary services. Petitioner counters that caseload should not be the only criteria used to trigger the prioritization set forth in Subsection 409.029(9)(c), Florida Statutes.

    
    

53. Respondent contends that, in order to provide these "services," it had to institute caseload management guidelines of staff/client ratio exceeding 1:150 because, at that point, it "lacks the resources to provide the services necessary for participation" in the PI program.

    
    

54. Generally, an agency's interpretation of statutes should be given great deference and should not be overturned unless clearly erroneous. Maclen Rehabilitation Center v. Department of Health and Rehabilitative Services, 588 So.2d 12, 13 (Fla. 1st DCA 1991); Woodley v. Department of Health and Rehabilitative Services, 505 So.2d 676, 678 (Fla. 1st DCA 1987). Moreover, an agency's interpretation needs only to be within the range of possible interpretations. Department of Professional Regulation, Board of Medicine v. Durrani, 455 So.2d 515, 517 (Fla. 1st DCA 1984).

    
    

55. Here, Respondent's interpretation of Subsection 409.029(9)(c), Florida Statutes, has been shown to be unreasonable and clearly erroneous. Subsection 409.029(9)(c), Florida Statutes, addresses the providing of services to AFDC recipients who volunteer for participation in the PI program--exempt and nonexempt recipients who do not meet the target group criteria are permitted to volunteer; and mandatory participation is only applicable to nonexempt recipients who meet the target group criteria. The said subsection contemplates that volunteers would receive, at the outset, the services necessary for participation in the PI program and directs that denial of services would occur

    only when Respondent "lacks resources to provide the services necessary for participation, providing a deferral procedure which is essentially the deferral of nonexempt AFDC recipients who do not meet the target group criteria. It is without question that implementing Subsection 409.029(9)(c) includes identifying the "resources" and determining the point at which the resources become inadequate or insufficient to provide the needed "services."

    
    

56. In order to be in concurrence with Subsection 409.029(9)(c), prioritization must occur or be effectuated at the outset. To prioritize at a later point would cause the denial of services to exempt volunteers at the outset, which is contrary to the statute. Once prioritization occurs, if and when Respondent reaches the point where it lacks the resources to provide the necessary services for participation in the PI program, deferrals of nonexempt volunteers who do not meet the target group criteria would occur initially in order to provide the services needed to the other volunteers which includes exempt volunteers who meet the target group criteria, i.e., Petitioner. However, under Respondent's caseload prioritization rule, any volunteer can be denied services (in the case sub judice support service, i.e. child care) and

    prioritization would not begin until after the staff/client ratio exceeds 1:150. Furthermore, Respondent's procedure would aid in defeating the Legislature's goal of providing public assistance recipients with the necessary "services" to become "economically self-supporting or productive members of society." Subsection 409.029(2), Florida Statutes.

    
    

57. Petitioner has met her burden to show that Respondent has exceeded its grant of rulemaking authority.

    
    

    Child Care Freeze

    
    

58. Pertinent to this case on the child care freeze policy, Section 120.535, Florida Statutes, provides:

    
    

    (1) Rulemaking is not a matter of agency discretion. Each agency statement defined as a rule under s. 120.52(16) shall be adopted by the rulemaking procedure provided by s. 120.54 as soon as feasible and practi- cable . . .

    (2)(a) Any person substantially affected by an agency statement may seek an administra- tive determination that the statement violates subsection (1). A petition for an administ- rative determination of an agency statement shall be in writing and shall state with particularity facts sufficient to show:

    * * *

    2. That the statement constitutes a rule under s. 120.52(16), in which case the peti- tion shall include the text of the statement or a description of the statement.

59. Section 120.52(16), Florida Statutes, defines "rule" to mean: [E]ach agency statement of general applica-

    bility that implements, interprets, or pres-

    cribes law or policy or describes the organi- zation, procedure, or practice requirements

    of an agency and includes any form which imposes any requirement or solicits any in- formation not required by statute or by an existing rule. The term also includes the amendment or repeal of a rule . . .

    
    

60. Petitioner is seeking an administrative determination that the following statement, contained in a memo to Respondent's District 2 providers of child care for the PI program, is an "agency statement" that violates Subsection 120.535(1), Florida Statutes:

    
    

    Due to the large over annualization we are projecting for FY 92-93 in Service I, Service II and Family Support Act child care services, I am directing you to immediately freeze new enrollments except for entitled groups (TCC and AFDC Employed) and the highest at-risk group (Priority 1 in Service I). We will closely monitor utilization and let you know as soon as spending is within budget limits.

    
    

    This freeze applies to new enrollments only. Children currently in care should continue to receive services as appropriate.

    
    

    As the challenger, the burden is upon Petitioner to demonstrate, by the preponderance of evidence, that such policy exists and that such policy constitutes a rule as defined by Subsection 120.52(16), Florida Statutes. Section 120.535, Florida Statutes; Humana, Inc. v. Department of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985); and Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759 (Fla. 1st DCA 1978).

    
    

61. Respondent contends that its action is predicated on existing statute, i.e., Subsection 409.029(7), Florida Statutes. The said Subsection applies to "support services." Subsection 409.029(7) provides in pertinent part:

    
    

    1. In addition to the employment and train- ing program components in subsection (6), support services shall be provided according

       to federal law to the extent funds are avail- able to facilitate public assistance recipient participation and movement toward self-suffi- ciency.

    2. Support services shall include, but not be limited to:

       1. Child care, which shall be guaranteed and provided in conformity with federal law and regulation.

       2. Paid child care, . . .

       3. Child care after employment, . . . .

       (Emphasis added)

       
       

62. According to the challenged statement, the child care freeze is only applicable to Respondent's District 2. Respondent contends that sufficient funds for child care were not available for District 2, so the child care freeze was instituted, discontinuing the providing of child care; therefore, based upon

    existing statute. In determining whether funds were available for child care services in District 2, Respondent's 1992-93 fiscal budget for child care was annualized. Respondent determined that, if spending continued as it had in the last fiscal year (which was used as the basis or starting point to project the funding needed for the 1992-93 fiscal year), all funds for the 1992-93 fiscal year for the delivery of child care services in District 2 would be expended before the end of the fiscal year, which meant that child care services would end for all participants before the end of the 1992-93 fiscal year. In essence, the Florida Legislature had not appropriated sufficient funds to meet the needs of PI child care in District 2, but regardless, statutorily, Respondent had to live within its budget.

    
    

63. Respondent is partially correct in its position. In order to not provide child care services, a determination had to be made that funds were not available for child care services. This process is clearly permitted by Subsection 409.029(7), Florida Statutes. Once funds are determined not to be available for support services, and child care is a support service, Respondent is not required to provide child care services.

    
    

64. However, the impact of not providing child care services--what happens after the determination and to whom it happens and to what extent--cannot be readily discerned from Subsection 409.029(7), even though Respondent's child care freeze policy does answer those issues. At this juncture, Respondent's policy fails to be predicated on existing statutory authority; it places an interpretation on the statute that is not readily apparent and has the direct and consistent effect of law. See, St. Francis Hospital, Inc. v. Department of Health and Rehabilitative Services, 553 So.2d 1351, 1354 (Fla. 1st DCA 1989), ["We recognize that an agency interpretation of a statute which simply reiterates the legislature's statutory mandate and does not place upon the statute an interpretation that is not readily apparent from its literal reading, nor in and of itself purport to create rights, or require compliance, or to otherwise have the direct and consistent effect of law, is not an unpromulgated rule, and actions based upon such an interpretation are permissible without requiring an agency to go through rulemaking."]

    
    

65. As it relates to what happens in Respondent's child care freeze policy after a determination that funds are not available and child care services will not be provided, Petitioner has met its burden and Respondent's policy is a rule as defined by Subsection 120.52(16), Florida Statutes. Hence, Respondent's child care freeze policy is in violation of Subsection 120.535(1), Florida Statutes.

    
    

66. It is not necessary to address Respondent's other arguments.

    
    

    Standing

    
    

67. Subsection 120.56(1), Florida Statutes, provides that any person substantially affected by a rule may seek an administrative determination that the rule is an invalid exercise of delegated legislative authority. Section 120.535(2)(a), Florida Statutes, provides that any person substantially affected by an agency statement may seek an administrative determination that the

    statement was not adopted pursuant to statutory rulemaking procedures. Petitioner in the case sub judice must show that she is substantially affected by (1) the caseload prioritization rule and (2) the child care freeze policy.

    
    

    [B]efore one can be considered to have a sub substantial interest in the outcome of the proceeding he must show 1) that he will suffer injury in fact which is of sufficient imme- diacy to entitle him to a section 120.57 hearing, and 2) that his substantial injury

    is of a type or nature which the proceeding is designed to protect. The first aspect of the test deals with the degree of injury.

    The second deals with the nature of the injury.

    
    

    Agrico Chemical Co. v. Department of Environmental Regulation, 406 So.2d 478,

    482 (Fla. 2d DCA 1981), rev. den., 415 So.2d 1359 (Fla. 1982); Village Park Mobile Home Ass'n, Inc. v. State, Department of Business Regulation, 506 So.2d 426, 432 (Fla. 1st DCA 1987).

    
    

68. Regarding the challenged caseload prioritization rule, Petitioner has shown that the rule will cause her to suffer injury in fact of sufficient immediacy. The challenged caseload prioritization rule--Rule 10C-32.002(4), Florida Administrative Code--implements Subsection 409.029(9)(c), Florida Statutes, which mandates the prioritizing by Respondent of PI participants and the deferring of nonexempt participants, who are required to participate, when Respondent lacks resources to provide services necessary for participation in the PI program. Petitioner is exempt from the PI program and is also a member of the target group of the PI program. Even though Petitioner is exempt, she volunteered to participate in the PI program in order to obtain child care service while she pursues an education. Petitioner is statutorily permitted to volunteer for the PI program. Subsection 409.029(9)(c), Florida Statutes.

    
    

69. Once Petitioner volunteered for the PI program and requested child care services, Respondent was obligated to provide child care services. However, what happens when there are inadequate or insufficient resources to provide child care? Subsection 409.029(9)(c) establishes what action is to be taken if Respondent determines that it lacks sufficient resources to provide services necessary for participation in the PI program, which services include child care. According to the said Subsection, in order to provide the services needed to participate, deferrals should be implemented affecting nonexempt participants, not exempt participants. Such action would provide the services needed for exempt participants on a priority basis; thereby providing Petitioner, as an exempt participant, with child care. However, Respondent's interpretation of Subsection 409.029(9)(c) through Rule 10C-32.002(4) requires the denial of child care service to Petitioner from the very beginning because

    the staff/client ratio in District 2 did not exceed 1:150, which is exactly what happened in the case at hand. Without child care service, Petitioner's schooling is jeopardized--she has had to cut back on her classes and obtain a part-time job. Furthermore, without child care, Petitioner was forced to disenroll from the PI program.

    
    

70. Petitioner is substantially affected and has standing to challenge the caseload prioritization rule.

71. Regarding the challenged child care freeze policy, Petitioner has shown that the policy will cause her to suffer injury in fact of sufficient immediacy. Effective July 10, 1992, Respondent's child care freeze policy affected PI participants only in Respondent's District 2 and affected only volunteers in the PI program who were new enrollments. Petitioner falls squarely within these parameters.

    
    

72. Because of the child care freeze, Petitioner was denied child care service. As stated previously, without child care service, Petitioner's schooling was, and is, jeopardized--she has had to cut back on her classes and obtain a part-time job. Furthermore, without child care, Petitioner was forced to disenroll from the PI program.

    
    

73. Petitioner is substantially affected and has standing to challenge the child care freeze policy. 7/

CONCLUSION

Based on the foregoing findings of fact and conclusions of law, it is ORDERED that:

1. The amended petition to declare the provisions of Rule 10C-32.002(4), Florida Administrative Code, invalid is granted.

   
   

2. The amended petition to declare the child care freeze policy in violation of Subsection 120.535(1), Florida Statutes, is granted.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 17th day of August 1993.

ERROL H. POWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of August 1993.

ENDNOTES

1/ Five of the Petitioner's exhibits were deposition testimony. 2/ Subsection 409.029(9)(c), Florida Statutes.

3/ Respondent's Exhibits 1 and 2. 4/ Subsection 409.029(9)(c), F.S.

5/ Respondent asserts that it has an existing rule addressing what happens after a determination has been made that child care is unavailable--Rule 10C- 32.002(10)(b)2, Florida Administrative Code--by placing an individual in "limited contact." This argument is not persuasive. Rule 10C-32.002(10)(b)2 addresses participants who meet "the criteria for an exemption or deferral from participation." If a participant meets the deferral criteria, the participant is placed in "limited contact," and one of the criteria for deferral is "temporary unavailability of support services," which child care is a support service. Respondent assets that this rule made provisions for a child care freeze, and placed the public on notice of the possibility of the unavailability of child care. However, in the case sub judice, Petitioner, first and foremost, meets the statutory criteria for an exemption, not a deferral. Section 409.029(9)(c), Florida Statutes. Therefore, this rule would not be applicable to her and would not put her on notice that there is a possibility that she would not received child care service.

6/ Whether rulemaking was feasible or practicable for the child care freeze was not an issue specifically addressed in the hearing; however, it was addressed in the proposed final orders. Respondent's argument that to promulgate the child care freeze in rule was infeasible or impracticable is not persuasive.

7/ Respondent places emphasis upon a case in the U.S. District Court, Northern District of Florida--Maynard v. Williams, TCA 92-40279-MMP. On August 25, 1992, the court issued an order denying a motion for a preliminary injunction.

Contrary to Respondent's interpretation, the Hearing Officer does not interpret the Williams decision on the preliminary injunction to state that Respondent "need only provide child care to those individuals it requires to be in the program."

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-2297RU

Findings of fact proposed by Petitioner:

1. Proposed findings of fact numbered 1-44 and 46-66 have been adopted either verbatim or in substance in this Final Order.

2. Proposed finding of fact numbered 45 is generally adopted in this Final Order, except for the statement regarding documents relating to the Legislature which is rejected as being subordinate to the issues herein.

3. Proposed finding of fact numbered 67 is rejected as being subordinate to the issues herein.

Findings of fact proposed by Respondent:

1. Proposed findings of fact numbered 1, 3-10, 12, 14-19 and 21 have been adopted either verbatim or in substance in this Final Order.

2. Proposed finding of fact numbered 2 is rejected as contrary to the evidence presented. The relationship shown between child care and the caseload prioritization procedure is that the caseload prioritization rule allows child care to be denied to exempt volunteers at the outset before prioritization occurs, instead of prioritizing first as required by Section 409.029(9)(c), Florida Statutes.

3. Proposed finding of fact numbered 11 is rejected as being subordinate to the issues herein.

4. Proposed finding of fact numbered 13 is generally adopted in finding of fact numbered 29, but not to the point that the exhibits "established" anything. The exhibits allowed Respondent to take certain positions with confidence.

5. Proposed finding of fact numbered 20 is rejected as being irrelevant to the determination of the issues herein.

COPIES FURNISHED:

Cindy Huddleston, Esquire Anne Swerlick, Esquire Florida Legal Services, Inc. 2121 Delta Boulevard

Tallahassee, Florida 32303

Katrina M. Saggio, Esquire Department of Health and

Rehabilitative Services Building 6, Room 466

1317 Winewood Boulevard

Tallahassee, Florida 32399-0700

Robert Powell, Clerk Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

John Slye, Esquire General Counsel Department of Health and

Rehabilitative Services 1323 Winewood Boulevard

Tallahassee, Florida 32399-0700

Carroll Webb, Executive Director Administrative Procedures Committee

120 Holland Building Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code Room 1802, The Capitol 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: 93-002297RU

Orders for Case No: 93-002297RU