The Issue The question presented here concerns the Petitioner, State of Florida, Department of Agriculture and Consumer Services' Stop Sale Notice placed against Respondent, Pinner Oil Company under the alleged authority of Section 525.06, Florida Statutes (1980), by the process of requiring a refundable bond in the amount of $471.34, pending the outcome of this dispute in which it is contended that the Respondent supplied gasoline for sale which failed to comply with Rule Subsection 5F-2.01(1)(j), Florida Administrative Code, dealing with the allowed lead content in gasoline.
Findings Of Fact The Petitioner, State of Florida, Department of Agriculture and Consumer Services is an agency of government which has, among other responsibilities, the requirement to establish and enforce standards related to maximum allowable lead content in unleaded gasoline offered for sale to the general public. This regulation is designed to avoid the destruction of catalytic devices found in the exhaust systems of certain cars, in which the destruction of a catalyst would bring about problems, with the exhaust system causing its replacement and more importantly, lead to adverse effects on the environment due to an increase in undesired emission from the exhaust system. The Respondent, Pinner Oil Company of Cross City, Florida, is a jobber which supplies gasoline to retail outlets who in turn sales the gasoline to members of the motoring public. The facts reveal that on October 6, 1980, an official with the Petitioner made a routine inspection of the unleaded gasoline reservoir at the B. F. Goodrich-Texaco at 210 Rogers Boulevard, Chiefland, Florida, a customer of Pinner Oil Company. This gasoline was subsequently analyzed and on October 7, 1989, a Stop Sale Notice was served based upon a determination that the unleaded gasoline found in the reservoir at that station contained more than 0.05 grams of lead per U.S. gallon. The gasoline in question was provided to the B. F. Goodrich outlet by an employee of Pinner Oil Company as a part of his duties with the Respondent. In lieu of the total confiscation of the gasoline found in the reservoir tank at the station In question, the Respondent was allowed to post a refundable bond in the amount of $471.34 which represented the price for the number of gallons sold at a retail price since the time of the prior delivery to that station. (By Stipulation entered into between the parties, it was agreed that a finding of fact would be made to the effect that the Respondent, during the course of the last two years, had not been cited for a violation of the Florida Statutes pertaining to contaminated fuels.)
The Issue The issue is whether the challenged two working day notice provision of existing Rule 5F-11.047(1), Florida Administrative Code, constitutes an invalid exercise of delegated legislative authority as defined in Section 120.52(8), Florida Statutes.
Findings Of Fact The Department is the state agency charged by law with regulation of the liquefied petroleum (LP) gas industry. Sections 570.07(16)(k), 570.07(23), 527.055, and 527.06, Florida Statutes. Petitioner bears the name "1st Propane of Bushnell," a registered fictitious name of Par-Gas, Inc. Petitioner is a Category I liquefied petroleum gas distributor, licensed and regulated by the Department. There are approximately 460 licensed LP gas dealers in Florida. Florida’s licensed LP gas dealers include one-man operations, mom and pop family-owned businesses, regional marketers and national multi-state marketers. LP gas operations in Florida are unique compared to other states, in that Florida has many small volume users. The Department issues the Category I LP gas dealer license only to entities, not to individuals. The license permits the licensee gas company to transport LP gas, fill LP gas containers, sell LP gas containers, and to service, install, or repair appliances or equipment that use LP gas. Most LP gas dealers own the LP gas tank or cylinder installed at the customer location. Accordingly, when the dealer delivers LP gas to its customer, it is filling or refilling its own container; unless the customer owns the container, then the dealer fills the customer’s container. LP is a by-product of the oil refining process. The most common LP gas in Florida is propane. LP gas has a boiling point of minus 44 degrees Fahrenheit. The very cold LP gas is stored in the container under pressure of approximately 145 pounds per square inch (PSI).1 LP gas expands approximately 270 times as it changes from a liquid to a vapor. LP gas vapor is one and one-half times heavier than air. Because LP gas is heavier than air, when released into the air, LP gas vapor drops, pools and accumulates in low areas. It will not disperse in areas where there is no wind movement. A spark from static electricity, electric motors, automobile fan motors, exhaust pipes, catalytic converters, air conditioning compressors or lit cigarettes will ignite LP gas, causing explosion or fire. LP gas is more volatile than natural gas. Unlike natural gas which is delivered to the customer by pipe, LP gas is typically stored at residential, commercial or school installations in a pressurized container. Two kinds of LP gas containers are tanks and cylinders. Other LP gas system components include the regulator, valves, interior and exterior piping, meter, and appliances. The National Fire Protection Association, Standard 58, LP Gas Code 2001 Edition, ("NFPA 58") makes the container owner responsible for ensuring his containers are suitable and qualified for service. LP gas tanks are typically horizontal and much larger than LP gas cylinders. Tanks used in residential and commercial applications, generally range in size up to 1,000 gallons. Tanks are deemed permanent installations. Cylinders are generally upright and have a specified lifetime, after which they must be re-qualified by the owner. Cylinders are deemed temporary or portable installations. LP gas cylinders and tanks are both “liquefied petroleum gas equipment” within the meaning of Chapter 527, Florida Statutes. Rule 5F-11.047, Florida Administrative Code, governs LP gas container disconnections in Florida. The genesis of Rule 5F-11.047, Florida Administrative Code, dates back to the 1940’s and 1950’s and a State Regulation2 that allowed only the LP gas tank owner, or those authorized by him, to disconnect a tank from a customer’s system. In 1958, Florida’s Attorney General, Richard Ervin, became concerned that the Regulation could be applied in an anti-competitive manner, but in 1959, the Regulation was amended to allow one gas company to disconnect another company’s tank whether or not it was authorized, provided advance notice was given to the gas company owning the tank. In the 1970’s this “advance notice” concept was continued and again adopted, this time in an administrative rule promulgated under Chapter 120, Florida Statutes. In 1990, The Department of Insurance (“DOI”) promulgated Rule 4B-1.008, Florida Administrative Code, under Chapter 120, Florida Statutes.3 In 1994, DOI’s Rule 4B-1.008, Florida Administrative Code, was properly transferred to the Department without changes. The Department properly filed Rule 5F-11.047, Florida Administrative Code, for adoption without changes as required by Chapter 120, Florida Statutes, and Chapter 1S-1, Florida Administrative Code, effective March 15, 1994. When the Rule was initially adopted in 1990, David Rogers wrote a letter4 to DOI on behalf of The Florida Propane Gas Association (“The Association”) recommending rule language which became Rule 4B-1.008, Florida Administrative Code. The same language lives on in challenged Rule 5F-11.047(1), Florida Administrative Code. The Association specifically recommended the Rule language “in the interest of safety to the propane industry and consumers” and because the Rule allowed “orderly disconnects to be made in a safe manner.” As stipulated by the parties at final hearing, Rogers’ October 31, 1990, letter is the Association’s past and present position on Rule 5F-11.047(1), Florida Administrative Code. Other states have tank disconnect rules similar to Florida’s Rule, and other states have modeled their disconnect rules after Florida’s Rule 5F-11.047(1), Florida Administrative Code. No company has ever challenged Rule 5F-11.047(1), Florida Administrative Code, except Petitioner. Petitioner challenges only the two working day notice requirement of Rule 5F-11.047(1), Florida Administrative Code, alleging it is an invalid exercise of delegated legislative authority. Section 120.52(8), Florida Statutes. Petitioner alleges that the “Department has exceeded its grant of rulemaking authority because Section 527.06, Florida Statutes, does not specifically include nor contemplate or require notice to cylinder, tank and system owners prior to a disconnection;” that the existing rule enlarges, modifies and contravenes the specific provisions of Sections 527.06 and 527.07, Florida Statutes, in that neither statutory provision requires or authorizes a 48-hour/two working day pre-disconnection notice to an LP gas tank or system owner”; that the existing rule is arbitrary and capricious in that the pre-disconnection notice requirement has no relation or connection to any health, safety or welfare concerns; and that the Rule does not promote the health, safety or welfare of the public and, therefore, cannot be supported by competent substantial evidence. Petitioner also alleges that application of the two working day notice requirement has an anti-competitive effect on the LP gas market. Rule 5F-11.047(1), Florida Administrative Code, pertains to disconnecting LP gas containers. No statute prohibits a person or gas company from disconnecting another gas company’s LP gas container. However, Section 527.07, Florida Statutes, prohibits a person or gas company from filling, refilling, using, or delivering another gas company’s LP gas container without authorization from the gas company that owns the container. Section 527.07, Florida Statutes, reads: No person, other than the owner and those authorized by the owner, shall sell, fill, refill, deliver, permit to be delivered, or use in any manner any liquefied petroleum gas container or receptacle for any gas or compound, or for any other purpose. Section 527.07, Florida Statutes, is one of the statutes implemented by Rule 5F-11.047(1), Florida Administrative Code, the other being Section 527.06, Florida Statutes. As a practical matter, when a gas customer wants to change LP gas companies, his new choice of companies cannot use his existing gas company’s LP gas container unless authorized by the existing company, which owns the installed container. So, if the customer does not own his own container5 and authorization to use the existing company’s container is not obtained, the existing container will have to be disconnected so the new company can install its own container. Section 527.07, Florida Statutes. When one gas company disconnects another gas company’s container in order to install its own container, it is called a “switch-out” or “changeover.” Rule 5F-11.047, Florida Administrative Code, determines when the disconnect notification must occur. When disconnected, a LP gas container is either empty (out-of-gas)6 or it contains LP gas. If the tank is empty, the tank owner must be notified within 24 hours after the empty tank has been disconnected. See Rule 5F-11.047(2), Florida Administrative Code. Thus, no advance notice is required when the customer is out-of-gas. However, if the existing container contains gas (hereinafter referred to as a “gas-filled container”),7 Rule 5F-11.047(1), Florida Administrative Code, requires the new, incoming gas company to give two working days advance notice to the existing gas company/tank owner that it intends to disconnect the existing container after two working days. Rule 5F-11.047(1), Florida Administrative Code, reads: No person, firm or corporation, other than the owner and those authorized by the owner, shall connect or disconnect any cylinder, tank, or system containing liquefied petroleum gas, except in an out- of-gas situation, unless due and sufficient notice has been given by any person, firm or corporation to the owners of any cylinder or tank, prior to disconnecting or connecting such cylinder, tank, or system. Due and sufficient notice shall be received by the owners at least two (2)working days prior to installing the cylinder, tank, or system of said person, firm, or corporation, and shall be evidenced by a signed receipt. Acceptable evidence of receipt of notification shall be a signed certified mail receipt, signed receipt of hand delivery or facsimile transmission receipt. If after two working days the cylinder, tank, or system has not been disconnected by the owner, the said person, firm or corporation may then disconnect downstream of the system regulator or meter. It shall be mandatory that the person, firm or corporation who so disconnects any such cylinder or tank, whether empty or full, upon the premises of a consumer, does so in a manner that renders the cylinder or tank tight with valves turned off, the cylinder or tank service valve plugged with brass or steel fittings, and all other cylinder, tank or system openings properly plugged. In addition, any cylinder, tank, or system disconnected must be done so in a manner that is in compliance with the requirements of NFPA 58. (Emphasis supplied). The advance notice requirement only applies to gas-filled containers. After receiving two working days notice, the existing company/tank owner has several options: 1) The tank owner/company can disconnect and remove its gas-filled container from the property within the two working days; 2) swap containers with the incoming company, exchanging the existing container with a similar container delivered to its storage yard by the incoming company; 3) sell the existing gas-filled container to the incoming company or the consumer; 4) coordinate a switch-out with the incoming company; or 5) if it knows and trusts the safety training of the incoming company’s personnel, it can authorize the incoming company to disconnect its tank and put it in an agreed-upon safe location at the customer property until it can be picked up in a reasonable time. Disconnecting a gas-filled container is an inherently dangerous activity even though the person doing the disconnect has been properly trained. If the existing gas-filled container is sold or swapped to the incoming gas company, the inherently dangerous disconnect is not required. By contrast, after a gas- filled container is disconnected it must be temporarily stored on the customer property if it is not immediately removed. As established by testimony of the Department’s safety expert even trained persons sometimes store gas-filled containers on customer property in an unsafe and improper manner. Even LP gas companies’ employees are known to violate the two working day notice requirement leaving another company’s gas-filled container, unplugged, unprotected hazardous, unsafe condition on the consumer’s property. The two working day notice requirement of Rule 5F-11.047(1), Florida Administrative Code, provides sufficient time for the two gas companies to work out the switch-out or terms of transfer. Less than two working days' notice would not be sufficient to promote the safe handling of LP gas and proper installation of LP gas equipment. The Department presented the testimony of a Suburban Propane (“Suburban”) employee, Tom Ross. Ross is Suburban’s Florida regional manager. Suburban is a multi-state marketer and is the third largest propane company in Florida. Suburban’s 29 Florida locations are licensed by the Department and serve 80,000 customers. Suburban has twice as many LP gas containers in the field in Florida as any other region due largely to the fact that Florida has a lot of small volume users. Ross testified that training of personnel to perform disconnect varies, some companies providing better training than others. Suburban prefers to disconnect its own gas-filled tanks primarily because it knows the training its employees have received, and has no idea what kind of training a competitor company’s personnel may have received. Ross testified that as it relates to Suburban, Rule 5F-11.047(1), Florida Administrative Code, promotes the safe handling of propane gas. The two working day notice requirement gives Suburban the opportunity to evaluate the safety/liability of the situation and the potential safety/liability involved in moving the tank. Safety/liability issues related to the disconnect and removal of the gas-filled tank may make it advantageous for the existing tank owner to negotiate a tank swap with the company taking over the account. In that circumstance, no disconnect is required. The Department presented the testimony of Mike Ivestor. Ivestor is the operations manager of Quality Propane in Havana, Florida, a small mom-and-pop, independent LP gas company. Ivestor knows his own employees have been properly trained, but he cannot be sure how well all his competitors train their employees. Ivestor has a good relationship with most, but not all, competitors in his market. There are some LP gas companies Ivestor would not want to disconnect his company’s tanks. In the past, competitor gas companies have disconnected Quality Propane tanks and left them on a customer's property in unsafe condition. Two working days allows Ivestor sufficient time to coordinate with the incoming gas company a time to disconnect his tank so as to not interfere with the new installation or disrupting service to the customer. If Ivestor knows the incoming company, he may authorize it to disconnect his gas-filled container and temporarily store it in an agreed-upon place at the customer property which Ivestor knows is safe. Ivestor is concerned about his company’s liability when he has no control over who, when, or how his gas-filled tank is disconnected and set aside. Petitioner and the Department stipulated that if one gas company disconnects another company’s gas-filled container and relocates it on the customer’s property, it creates liability for the owner of the container. Rule 5F-11.047, Florida Administrative Code, is a safety rule, not a rule that regulates competitiveness. Further, the two working days' notice promotes proper installation and transporting of LP gas equipment. Rule 5F-11.047, Florida Administrative Code, states that it implements Section 527.06, Florida Statutes. The Florida Legislature provided in Section 527.06(1), Florida Statutes, that: The department may adopt rules necessary to effectuate any of the statutory duties of the department in the interest of public health, safety, and welfare and to promote the safe handling of liquefied petroleum gas and proper installation, storing, selling, utilizing, transporting, servicing, testing, repairing, and maintaining of liquefied petroleum gas equipment and systems. The department shall adopt rules reasonably necessary to assure the competence of persons to safely engage in the business of liquefied petroleum gas, including, but not limited to, the licensure, testing, and qualifying of such persons for the protection of the health, welfare, and safety of the public and persons using such materials. These rules shall be in substantial conformity with generally accepted standards of safety concerning the same subject matter and shall not extend, modify, or conflict with any laws of this state or the reasonable implications of such laws.” The Florida Legislature also provided in Section 527.06(2), Florida Statutes that: (2) The department shall promulgate and enforce rules setting forth minimum general standards covering the design, construction, location, installation, and operation of equipment for storing; handling; transporting by tank truck, tank trailer, or pipeline; and utilizing liquefied petroleum gases and specifying the odorization of such gases and the degree thereof. The rules shall be such as are reasonably necessary for the protection of the health, welfare, and safety of the public and persons using such materials and shall be in substantial conformity with the generally accepted standards of safety concerning the same subject matter. Petitioner and the Department each presented testimony of Vicki O’Neil in their respective case-in-chief. Ms. O’Neil has been Bureau Chief of the Bureau of LP Gas Inspection since August 1994. She oversees Bureau licensing, training, investigations, examinations, and the marketing assessment program. Ms. O’Neil testified that the Department’s interpretation of Section 527.06(1), Florida Statutes, is that the Department may take reasonable steps necessary to ensure the public’s safety through the rule-making process, and that the safe handling of LP gas is in the interest of the public health, safety, and welfare. This has been the Department’s interpretation of Section 527.06, Florida Statutes, since 1994 when responsibility for LP gas regulation was transferred from the DOI to the Department, along with Ms. O’Neil. As established by Ms. O’Neil's testimony, the Department’s policy is that proper installation, storing, selling, utilizing, transporting, servicing, testing, repairing, and maintaining of LP gas equipment and systems is in the interest of the public health, safety, and welfare and that Rule 5F-11.047, Florida Administrative Code, is an exercise of the Department’s power and duty to promote those public interests. The Department’s policy is that Rule 5F-11.047(1), Florida Administrative Code, is a safety rule necessary to promote the safe handling of LP gas. Rule 5F-11.047(1), Florida Administrative Code, is a safety rule, which is in substantial conformity with the published standards of the National Fire Protection Association and is also in substantial conformity with generally accepted standards of safety. As a result of the two working day notice requirement, the incoming and outgoing LP gas companies can dialogue about the proposed disconnection, repairs, safety, or hazardous conditions that might exist. The dialogue may also result in the two companies swapping tanks; thus, the inherently dangerous process of disconnecting the tank is avoided altogether. In light of recent terrorist events in this country, law enforcement has taken a heightened interest in LP gas and gas-filled LP gas containers. Security bulletins from various federal agencies, including the U.S. Department of Transportation, show the potential for terrorist groups to target commercial LP gas tanks and hazardous material storage facilities. There is a potential for theft of even small quantities of these materials for the purpose of making weapons of mass destruction. Each Category I LP gas dealer must have one “master qualifier” at each business location. Each Category I LP gas dealer must also have one “qualifier” for each 10 employees performing LP gas work. A gas company employee does not have to be a qualifier or a master qualifier to connect or disconnect LP gas containers for the company. Any gas company employee can disconnect gas-filled containers if he or she has been trained by the gas company to do so. These employees are not required to receive training or testing from the Department. The gas company must only document employee training in their company files. The Department generally does not know if a company employee is actually performing disconnects correctly or not, nor whether the employee has ever been disciplined by the employer for safety violations. The quality of employee training varies from company to company. For this reason, some LP gas companies prefer to have their own trained employees disconnect their tanks. Even though companies train their employees, some have been known to leave disconnected gas-filled containers in unsafe, hazardous condition on a customer’s property. As established by testimony of Ernest Barany, an employee of the Department within the Department’s Bureau of LP Gas Inspection for seven years and current supervisor of the Department’s LP gas inspectors, the Rule’s two working day notice requirement applies to LP gas containers in residential and commercial locations, LP gas dispensers, and containers installed in school facilities. Further, the two working day notice requirement of the Rule promotes public safety and the safe handling of LP gas. The two working day notice requirement of the Rule promotes the proper installation, storage, selling, and transporting of LP gas equipment. A customer’s existing gas company usually has superior knowledge of safety conditions at the LP gas installation because it installed the container and/or the entire LP gas system; has been delivering LP gas into the container; has maintained and/or repaired the system; and knows about any "red-tag" situations that exist on the LP gas system. In the LP gas industry, a red tag is a warning of an unsafe or hazardous condition in a LP gas system. The red tag is a paper tag hung by a wire from the tank cover or an appliance or other system component to warn all persons who see it that there is a problem or unsafe condition in the system. A gas company/tank owner will red-tag its LP gas container, appliance, or other system component when a temporary repair has been made or when the gas company knows of a defect in the system. A common temporary repair requiring a red tag is when the on-and-off valve leaks gas that can be detected at the threads between the handle and the body of the valve. The leak can be temporarily stopped by fully opening the valve and then with hand pressure turning the valve counterclockwise a little harder. A red tag would then be put on the tank saying "don’t refill until a permanent repair is made." Next, when the tank goes empty the repair can either be made on site or by changing the container on a scheduled basis. Customers sometimes remove a red tag after it is placed on the system by the current gas company. If the red tag is removed, the new, incoming LP gas company coming to disconnect the gas-filled container would not be aware that the system has a problem, defect, or temporary repair unless the existing gas company/tank owner has informed them. Accidents have occurred because customers have removed red tags without the knowledge of the gas company. The two working day notice requirement allows the existing company to address safety matters that are unknown to the incoming company, thus promoting a safe transfer of gas service. A switch-out or changeover requires more that just safely disconnecting the gas-filled container. If a gas company does not disconnect and remove its own gas-filled container, the gas-filled container must be disconnected and temporarily stored on the consumer’s property by the new incoming company. A disconnected gas-filled container is more dangerous than a disconnected empty container. Gas-filled containers temporarily stored on the customer’s property present a variety of safety concerns. If a gas-filled cylinder is disconnected and stored on its side at the customer location, liquid propane coming into contact with the safety valve can cause the valve to fail and leak. A gas filled cylinder can fall over creating a hazardous situation if it is punctured, or falls, and begins to roll or hits a person or vehicle. Failure to comply with Rule 5F-11.047(1), has resulted in at least one fatality in Florida because the tank was stored improperly on the customer property. Sometimes there is no safe place to temporarily store a gas-filled container on the customer property. In metropolitan markets there are unique safety concerns requiring that a gas-filled container be removed immediately upon disconnection. In some metropolitan areas there are limited property lines on residential tanks, underground tanks, commercial tanks that are stacked up behind strip malls with no place to move them, and tanks that are installed around schools or parks that could be tampered with by children. Without advance notice the tank owner cannot address these safe/liability concerns and responsibility for mishaps fall squarely on him. The two working day notice requirement gives the tank owner time to review customer records, evaluate the situation, and coordinate the disconnection and removal of its gas-filled tank. Sometimes the terrain makes safe temporary storage impossible or immediate removal of the tank required. In flood plain areas, local ordinances require the container to be chained or bolted down or bracketed to a wall. Vehicular traffic conditions at some locations require that a gas-filled container be protected behind a barrier. If the location requires that the new container be installed behind the existing barrier, the disconnected gas-filled container may end up stored in an un-barricaded area. The gas company that owns the existing installed container, has an investment in it, has serviced the customer location, and often will know whether or not there is a safe place to temporarily store the disconnected gas-filled container on the property. Two days' advance notice allows the existing gas company time to assess the safety situation unique to a customer location, thus promoting a safe transfer of gas service. Some LP gas containers are buried underground and must be excavated so the incoming gas company can install its own container underground. A crane, back-hoe, or other special equipment may be required to unearth and move the tank. The existing tank owner may also have to locate existing utilities and obtain governmental authorization or permits to excavate the tank. Some localities require the tank owner to notify local fire or building officials or apply for permits to move the container. If the tank is buried, other buried utilities on the property must be located before excavation. A gas-filled container sometimes must have the gas pumped out of it before the tank can be transported on Florida roads. This usually requires special equipment and two different kinds of trucks. The existing tank owner also has to schedule his employees to do the work. The Rule gives the tank owner the time to work out the logistics and scheduling of equipment to draw the gas out of the tank before it can be transported from the consumer’s property. In 1958, Florida’s tank disconnect rule was called LP Gas Regulation 11, of the Fire Marshall’s rules. LP Gas Regulation 11, Circa 1958 reads: No person, firm or corporation, other than the owner and those authorized by the owner so to do, shall connect or disconnect or transport or carry any means of conveyance whatsoever, any cylinder or tank containing Liquefied Petroleum Gas, whether in the liquid or vapor state. Thus, in 1958 all disconnects were prohibited unless authorized by the tank owner. A tank owner could monopolize a customer’s LP gas system by simply withholding authorization for the disconnect. The Insurance Commissioner at the time asked for an opinion from the Attorney General because he was troubled that a natural gas supplier was disconnecting LP gas containers without authorization from the owner. Voicing public safety concerns, the Attorney General opined that: Serious problems of public safety are involved in the disconnecting of L.P. gas cylinders and tanks and the above rule has its legitimate purpose in insuring public safety. I am of the opinion that this regulation can be legitimately enforced against the private utility in question, however, it must be applied in terms of public safety and not in such a manner as will unreasonably restrict competition. Acknowledging the serious public safety concerns related to LP gas tank disconnections, Attorney General Ervin also saw the potential evil of construing Regulation 11 to prohibit tank disconnections “under any circumstances.” “Advanced reasonable notice” was the cure. Attorney General Ervin opined: Said rule should not be construed to prohibit the private utility from disconnecting the L.P. gas tanks and cylinder under any circumstances. If after reasonable notice to the LP gas dealer said dealer does not disconnect his cylinders or tanks, the private utility should be permitted to disconnect them if it does so in a manner which leaves the tanks or cylinders in a safe condition. If the private utility should persist in failing to give reasonable notice and in leaving the tanks and cylinders in an unsafe condition, the State Fire Marshal may hold a hearing . . . and issue a cease and desist order. Subsequent to the Attorney General’s July 3, 1958, Opinion, on February 27, 1959, Regulation 11 was amended after Public Hearing. The revised, adopted Regulation 11 provided for “due and sufficient” notice to the tank owner prior to disconnecting his tank. Thus, in similar fashion to Rule 5F-11.047(1), Florida Administrative Code, if the notified tank owner did not disconnect his tank after a reasonable time, the tank could be disconnected by the company desiring to install its own tank.
The Issue The issue in this case is whether Petitioner should be issued an air construction permit authorizing its Crystal River steam generating plant Units 1 and 2 to co-fire a five to seven percent blend of petroleum coke with coal.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Petitioner, Florida Power Corporation (FPC), is an investor-owned public utility engaged in the sale of electricity to approximately 1.2 million customers. Among others, it operates the Crystal River Power Plant consisting of five electric-generating units in Citrus County, Florida. Units 1, 2, 4, and 5 are coal-fired, while Unit 3 is a nuclear unit. Respondent, Department of Environmental Regulation (DEP), is a state agency charged with the statutory responsibility of regulating the construction and operation of business enterprises in a manner to prevent air pollution in excess of specified limits. Among other things, DEP issues air construction permits for a limited period of time to undertake and evaluate initial operations of a business enterprise; long- term approval subsequently is available under an air operation permit. As a part of this process, and pursuant to federal law, DEP engages in a Prevention of Significant Deterioration (PSD) review to determine if non-exempt alterations to major facilities result in net emission increases greater than specified amounts. Under certain conditions, however, the use of alternative fuels or raw materials are exempted from PSD review. Intervenor, Legal Environmental Assistance Foundation, Inc. (LEAF), is a non-profit Alabama corporation licensed to do business in the State of Florida. It is a public interest advocacy organization whose corporate purposes include securing environmental and health benefits from clean air and water. Intervenor, Sierra Club, Inc. (Sierra Club), is a public interest advocacy organization incorporated in California and doing business in Florida. Its corporate purposes include securing the environmental and health benefits of clean air and water. On December 26, 1995, FPC filed an application with DEP for an air construction permit authorizing it to burn a blend of petroleum coke and coal in its existing coal-fired Units 1 and 2 at the Crystal River Power Plant in Citrus County, Florida. In the application, FPC did not address PSD review since it believed it qualified for an exemption from PSD permitting under Rule 62- 212.400(2)(c)4., Florida Administrative Code. That rule exempts from PSD review the [u]se of an alternative fuel or raw material which the facility was capable of accommodating before January 6, 1975, unless such change would be prohibited under any federally enforceable permit condition which was established after January 6, 1975. After reviewing the application, DEP issued an Intent to Deny on June 25, 1996. In that document, DEP stated that [a]ccording to information in Department files, both Units 1 and 2 operated on liquid fuel prior to January 6, 1975. Very substantial modifications of the boilers and pollution control equipment were implemented thereafter by [FPC] to convert the units to coal-firing mode. Therefore the project does not qualify for the exemption from PSD review claimed by the company. Contending that it was entitled to an exemption from PSD review and therefore a permit, FPC filed a Petition for Administrative Hearing on October 4, 1996. In its Petition, FPC generally alleged that petroleum coke is a product with characteristics very similar to coal; Units 1 and 2 were capable of accommodating coal and petroleum coke as of January 6, 1975; and contrary to the statements in the Intent to Deny, any boiler modifications and pollution control improvements to those units were minor and not substantial. The Permitting Program The PSD program is based on similar PSD requirements found in the federal Clean Air Act of 1970, as amended (the Act). The permitting program is a federally required element of DEP's State Implementation Plan (SIP) under Section 110 of the Act. DEP has fulfilled the requirement of administering the federal PSD program by obtaining approval from the Environmental Protection Agency (EPA) of state PSD regulations that meet the requirements of federal law. The requirements of the SIP are found in Chapters 62-204, 62-210, 62-212, 62-296, and 62-297, Florida Administrative Code. Chapter 62-212 contains the preconstruction review requirements for proposed new facilities and modifications to existing facilities. Rule 62-212.400, Florida Administrative Code, establishes the general preconstruction review requirements and specific requirements for emission units subject to PSD review. The provisions of the rule generally apply to the construction or modification of a major stationary source located in an area in which the state ambient air quality standards are being met. Paragraph (2)(c) of the rule identifies certain exemptions from those requirements. More specifically, subparagraph (2)(c)4. provides that a modification that occurs for the following reason shall not be subject to the requirements of the rule: 4. Use of an alternative fuel or raw material which the facility was capable of accommodating before January 6, 1975, unless such change would be prohibited under any federally enforceable permit condition which was established after January 6, 1975. The rule essentially tracks verbatim the EPA regulation found at 40 CFR 52.21(b)(2)(iii)(e)1. Therefore, in order to qualify for an exemption from PSD review, FPC must use "an alternative fuel . . . which [Units and 2 were] capable of accommodating before January 6, 1975." In addition, FPC must show that "such change would [not] be prohibited under any federally enforceable permit condition which was established after January 6, 1975." Contrary to assertions by Respondent and Intervenors, in making this showing, there is no implied or explicit requirement in the rule that FPC demonstrate that it had a subjective intent to utilize petroleum coke prior to January 6, 1975. The Application and DEP's Response In its application, FPC proposes to co-fire a five percent (plus or minus two percent) blend of petroleum coke with coal, by weight. It does not propose to make any physical changes to Units 1 and 2 to utilize petroleum coke. Also, it does not request an increase in any permitted air emission rates for the units because it can meet its current limits while burning the proposed blend rate of petroleum coke with coal. The application included extensive fuel analysis and air emissions data obtained from a DEP-authorized petroleum coke trial burn conducted from March 8 until April 4, 1995. Although it is not proposing to make physical changes to the plant, FPC applied for the air construction permit in deference to DEP's interpretation that such a permit is required when a permittee utilizes an alternative fuel. After completing his initial review, the DEP supervisor of the New Source Review program acknowledged in a memorandum to his supervisor that FPC was "entitled to a permit" but suggested that FPC be asked to "change their minds." Before the permit was issued, however, DEP changed its mind and issued an Intent to Deny on the ground that prior to January 6, 1975, Units 1 and 2 were not capable of accommodating coal or a blend of petroleum coke with coal. The Units Unit 1 has a generating capacity of 400 MW and commenced operation as a coal-fired plant in October 1966. It fired coal until March 1970, fuel oil until October 1978, and then again fired coal from June 1979 to the present. Unit 2 has a generating capacity of 500 MW and commenced operations as a coal-fired plant in November 1969. It fired coal until September 1971, fired fuel oil from December 1971 until October 1976, and then again fired coal from December 1976 to the present. Original equipment installed during the initial construction of Units 1 and 2 included the following: the barge unloader, which removes coal from barges that deliver coal from New Orleans; the stacker/reclaimer, which stacks the coal into piles and then reclaims the coal by directing it from the coal piles to conveyors that deliver it to the units; the crusher house, which has two crushers that crush the coal on the way to units down to nuggets no larger than three-quarters of an inch in diameter; the silos, which store the crushed coal; the feeders, located below the silos, which regulate the flow of coal from the silos to the pulverizers; the pulverizers, which grind the coal in preparation for combustion and then direct the pulverized coal to the burners, which are located on the corners of each unit's boiler; and the boilers, where the fuel is combusted, imparting heat to water contained in the waterwalls and thereby producing steam for electrical generation. The foregoing equipment was reflected in the plant's construction specifications and remains in operation, on site, at the plant. Components and parts of this equipment have been maintained, replaced, and repaired periodically. The original operations manual for the barge unloader, stacker/reclaimer, crushers, and conveyor systems are still kept and utilized on site. The primary fuel utilized in Units 1 and 2 is coal, although these units also co-fire from one to five percent number fuel oil and used oil. The combustion of fuel in Units 1 and 2 results in air emissions. As a result of changing regulatory requirements, there have been substantial improvements to the units' air pollution control capabilities since original construction. Existing Air Permits Unit 1 currently operates under Air Operation Permit Number A009-169341. Unit 2 operates under Air Operation Permit Number A-009-191820. Both permits were amended by DEP on October 8, 1996. Although each air operation permit contains an expiration date that has been surpassed, the permits remain in effect under DEP's regulations during the pendency of the agency's review of FPC's applications for air operation permits under the new Title V program found in Chapter 62-213, Florida Administrative Code. The air operation permits governing Units 1 and 2 contain mass emission rate limitations of 0.1 pounds/million (mm) British thermal units (Btu) or particulate matter (PM), and 2.1 pounds/mmBtu for sulfur dioxide. These mass emission rate limitations restrict the amount of each pollutant (measured in pounds) that is to be released into the atmosphere per million Btu of heat energy by burning fuel. The PM limitation is applicable to Units 1 and 2 under state regulations originally promulgated in 1972. The sulfur dioxide limitation was established in 1978 as a result of a PSD air quality analysis performed in conjunction with the permitting of Units 4 and 5. Prior to 1978, sulfur dioxide limits promulgated early in 1975 imposed a limit of 6.17 pounds/mmBtu on coal-fired operations at Units 1 and 2. Because Units 1 and 2 were subjected to a PSD air quality impact analysis along with Units 4 and 5, the units' sulfur dioxide emission limits were reduced from 6.17 to 2.1 pounds/mmBtu. The 2.1 pounds/mmBtu sulfur dioxide emission limitation applicable to Units 1 and 2 was set with the intention of assuring no adverse air quality impacts. The sulfur dioxide impacts associated with Units 1, 2, 4, and 5, after collectively being subjected to PSD air quality review, were much lower than the sulfur dioxide impacts previously associated with only Units 1 and 2. Is Petroleum Coke an Alternative Fuel? Petroleum coke is a by-product of the oil refining process and is produced by many major oil companies. The oil refineries refine the light ends and liquid products of oil to produce gasoline and kerosene, resulting in a solid material that resembles and has the fuel characteristics of coal. Both historically and presently, it has been common- place for electric utilities to rely on petroleum coke as fuel. For example, during the period 1969 through 1974, regular shipments of petroleum coke were sent to various electric utility companies throughout the United States to be co-fired with coal. In addition, DEP has issued permits for Tampa Electric Company to co-fire petroleum coke with coal. In 1987 and again in 1990, the EPA promulgated air- emission regulations which specifically define "coal" as including "petroleum coke." DEP has incorporated these regulations by reference at Rule 62-204.800(7)(b) 3. and 4., Florida Administrative Code. Given these considerations, it is found that petroleum coke constitutes an alternative fuel within the meaning of Rule 62-212.400(4)(c)4., Florida Administrative Code. Were the Units Capable of Accommodating the Fuel? Petroleum coke and coal are operationally equivalent. Petroleum coke can be handled, stored, and burned with the existing coal handling equipment at Units 1 and 2. The barge unloader, stacker/reclaimer, storage areas, conveyors, silos, crusher house, pulverizers, and burners, all installed prior to 1975, can handle petroleum coke. The equipment comprising Units 1 and 2 does not require any modification in order to burn a blend of petroleum coke with coal. Also, there will be no net impact on steam generator design or operation, and there will be no decline in performance or adverse impacts to the boilers. FPC could have co-fired petroleum coke with coal historically without making physical alterations or derating the units. Similarly, petroleum coke can be fired in Units 1 and 2 now without alterations or derating. These findings are further supported by Petitioner's Exhibits 35 and 36, which are reference books published in 1948 and 1967 by the manufacturer of the equipment installed at Units 1 and 2. They confirm that prior to 1975, petroleum coke was suitable for the manufacturer's boilers and pulverizers. Unrebutted testimony demonstrated that Units 1 and 2 could have co-fired petroleum coke with oil during the oil-firing period. Even when Units 1 and 2 fired oil instead of coal for a period of time in the 1970s, the coal-handling equipment remained in existence on-site and available for use, and both units remained readily convertible to their original, coal-firing modes. Because the plant remained capable of accommodating coal, it also remained capable of accommodating petroleum coke. In light of the foregoing, it is found that co-firing petroleum coke with coal at Units 1 and 2 could have been accomplished prior to January 6, 1975. Are there Post-January 6, 1975, Prohibitions? There is no evidence to support a finding that a federally enforceable permit condition was establshed after January 6, 1975, that prohibits co-firing petroleum coke with coal. I. Miscellaneous By letters dated February 14 and June 2, 1997, the EPA Region IV office replied to inquiries from DEP regarding the instant application. The conclusions reached in those letters, however, were based on a misapprehension of the facts in this case. Therefore, the undersigned has not credited these letters. To prove up its standing, LEAF introduced into evidence a copy of its articles of incorporation and a brochure describing the organization. In addition, it asserted that the air quality for its members would be "at risk" if Units 1 and 2 did not meet PSD standards and air emissions were "increased." Intervenor Sierra Club proffered that a substantial number of members "live, work, or recreate in the vicinity of the Crystal River Units 1 and 2, and in the area subject to the air emissions by those units," and that those members "would be substantially affected by the proposed exemption."
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Environmental Protection enter a final order granting the application of Florida Power Corporation and issuing the requested air construction permit. DONE AND ORDERED this 23rd day of September, 1997, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1560 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of September, 1997. COPIES FURNISHED: Kathy Carter, Agency Clerk Department of Environmental Protection 3900 Commonwealth Boulevard Mail Station 35 Tallahassee, Florida 32399-3000 James S. Alves, Esquire Post Office Box 6526 Tallahassee, Florida 32314-6526 W. Douglas Beason, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard Mail Station 35 Tallahassee, Florida 32399-3000 Gail Kamaras, Esquire 1115 North Gadsden Street Tallahassee, Florida 32303-6327 Jaime Austrich, Esquire Post Office Box 1029 Lake City, Florida 32056-1029 F. Perry Odom, Esquire Department of Environmental Protection 3900 Commonwealth Boulevard Tallahassee, Florida 32399-3000
Findings Of Fact During a routine inspection on March 30, 1983, a sample diesel fuel taken from Respondent's place of business in Clearwater, Florida, was tested and was found to have a flash point of 660F. Normal flash point for diesel fuel is 1000F. A Stop Sale Notice was issued March 30, 1983, and sales from this tank were stopped. On March 31, 1983, Respondent posted a $1,000 bond in lieu of having the fuel confiscated. Before the Stop Sale Notice, 1,282 gallons of contaminated diesel fuel had been sold from this tank at a price of $1.099 per gallon.
Findings Of Fact Ware Oil and Supply Company, Inc. (hereafter "Petitioner" or "Ware Oil"), is a wholesale and retail dealer of petroleum products. Ware Oil is a licensed dealer of special and motor fuels. Special fuels are primarily diesel and are used to operate off-highway equipment such as boats, farm tractors and industrial machinery. Beginning March 1980, the Department conducted a special fuels tax audit of the records of the Petitioner for the period January 1, 1977, through January 31, 1980. The special fuels tax audit resulted in a levy of a tax deficiency pursuant to Part II, Chapter 206, Florida Statutes. The taxes assessed together with penalty and interest are $6.868.06, with interest accruing at $1.70 per day from April 14, 1980. The assessment was based in sales of special fuels made by the Petitioner to four customers; Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina. The assessment relative to the sales of special fuel to Hoxie Brothers Circus and Jackson United Shows was due to the absence of a purchaser's affidavit of exemption from these customers and the Department's belief that they were dual users of special fuel due to the nature of their businesses. The assessment relative to Tommy Lynn was based on the Department's conclusion that Mr. Lynn was a dual user of special fuel and was an unlicensed dealer at the time the sales were made. The assessment relative to Pace's 66 Marina was based on Pace's resale of special fuels for which a dealer's license is required at the time of purchase. The taxes assessed by the Department are derived from the number of gallons of special fuel which was sold by the Petitioner to Hoxie Brothers Circus, Jackson United Shows, Tommy Lynn and Pace's 66 Marina, on which the $.08 per gallon tax was not collected. During 1977 Petitioner sold 550 gallons of special fuel to Hoxie Brothers Circus for purposes of generating electricity in order to operate circus rides and lights. The Petitioner did not have an exemption certificate from Hoxie relative to this sale although the sale invoice indicated that the fuel was for "off-road use". Sales tax of $.04 per gallon was collected by the Petitioner from Hoxie. No testimony or documentary evidence was produced to demonstrate that Hoxie in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle connected to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or far a dual use. In 1978, the Petitioner sold 300 gallons of special fuel to Jackson United a circus which generates its own electricity for circus rides and lights. The Petitioner has no exemption certificates for this sale; however, like Hoxie, the sales invoice has the term "off-road use" noted on its face. No testimony or documentary evidence was introduced to demonstrate that Jackson in fact used the special fuel for an exempt purpose, that the special fuel was not placed into a receptacle to the fuel supply system of a motor vehicle and that the special fuel was not purchased for resale or for a dual use. In 1977 the Petitioner sold 11,200 gallons of special fuel to Tommy Lynn. At that time Mr. Lynn was an independent logger who used all the special fuel purchased from the Petitioner for his logging equipment in the field and for off-road use. At the time of his purchases from the Petitioner, Mr. Lynn was a dual user of special fuels in that he used special fuel for both on and off road equipment. Mr. Lynn bought his off-road special fuels exclusively from the Petitioner and his on-road special fuel from another dealer. When audited by the Department, Petitioner did not have an exemption certificate for Mr. Lynn on file in its records. The Department in the past accepted exemption certificates obtained after sales were made. Mr. Lynn executed two after the fact exemption certificates. The first certificate was erroneously executed and a second drafted and signed in which Mr. Lynn stated that his purchases were for off-road use. The second certificate corroborates Mr. Lynn's direct testimony that the special fuel purchased from the Petitioner was used solely for off-road use. Neither of these certificates demonstrates that Mr. Lynn was a licensed dealer in special fuels. During 1977, 1978 and 1979 the Petitioner sold 52,484 gallons of special fuel to Pace's 66 Marina. Pace's used this special fuel for resale to users of commercial and pleasure boats and therefore, no sales tax was collected. The location of the special fuel pumps at Pace's make it virtually impossible to use the fuel for purposes other than boating. At the time of the fuel's purchase, Pace's presented an exemption certificate to the Petitioner. At that time, Pace's was not a licensed dealer of special fuels and its dealer's license number did not appear on the exemption certificate furnished to the Petitioner. Petitioner was unaware that Tommy Lynn and Pace's 66 Marina were required to be licensed as dealers and the exemption certificates provided by them should have that contained their dealer's license numbers and therefore, had no knowledge that the exemption certificates of Mr. Lynn and Pace's were incomplete. The sales were made by Petitioner in reliance on the certificates supplied by these two customer. The Department imposed the assessment against Hoxie and Jackson due to the lack of appropriate exemption certificates. The assessment was levied against Tommy Lynn and Pace's due to improperly completed exemption certificates which failed to reflect the dealer's license number. The Department did not consider whether the involved special fuels were in fact used for exempt purposes. The unrebutted testimony and documentary evidence regarding the sales to Tommy Lynn and Pace's 66 Marina supports Petitioner's position that the fuels sold to these two customers were in fact used for exempt purposes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department enter a final order upholding the tax assessment against the Petitioner, Ware Oil and Supply Company. DONE and ENTERED this 31st day of August 1981, in Tallahassee, Florida. SHARYN L. SMITH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 31st day of August 1981. COPIES FURNISHED: Nicholas Yonclas, Esquire Akerman, Senterfitt & Eidson Post Office Box 1794 Tallahassee, Florida 32302 Jeff Kielbasa, Esquire Assistant Attorney General Department of Legal Affairs The Capitol, LLO4 Tallahassee, Florida 32301
Findings Of Fact Respondent, Big "S" Oil Company, operates a gasoline station at 4002 North Pace Boulevard, Pensacola, Florida. The station sells gasoline products to the general public. On or about December 9, 1981, a petroleum inspector of Petitioner, Department of Agriculture and Consumer Services, took a gasoline sample for analysis of regular gasoline from the Respondent's storage tanks during the course of a routine inspection. This sample was tested in Petitioner's mobile laboratory and was found to have an elevated End Point of 494 degrees Fahrenheit 1/ Department regulations provide that the End Point for leaded gasoline offered for sale in Florida shall not exceed 446 degrees Fahrenheit. A second test conducted in a private laboratory confirmed the initial testing results. On the basis of this information, a stop sale notice on the tank that dispensed the gasoline was issued on December 9, 1981. (Petitioner's Exhibit 2). Petitioner determined that prior to the issuance of the notice, approximately 1,900 gallons of contaminated gasoline had been sold to the public. A bond of $1,000 was paid by Respondent to Petitioner in lieu of confiscation of the remaining leaded or regular gasoline in the storage tanks (Petitioner's Exhibit 1). The hearing was requested to contest the forfeiture of the bond.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent be required to forfeit the $1,000 bond posted with Petitioner. DONE and ENTERED this 24th day of February, 1982, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675
Findings Of Fact This case was presented for hearing based upon the request for formal Subsection 120.57(1), Florida Statutes, hearing, made by Arnold S. Rogers, President, One Stop Oil Company. The matters to be considered are as generally indicated in the Issues statement to this Recommended Order. The hearing was conducted on March 10, 1982. The Petitioner, State of Florida, Department of Agriculture and Consumer Services, is an agency of State government which has the obligation to inspect petroleum products in keeping with the provisions of Chapter 525, Florida Statutes (1980). The Respondent is a corporation which sells petroleum products in the State of Florida at an outlet located at 1238 Broward Road, Jacksonville, Florida. On November 25, 1981, a sample of the petroleum product kerosene was taken at the aforementioned location operated by the Respondent, which is known as Station No. 10. A subsequent analysis on December 3, 1981, revealed a "flash point" of 78F. This reading was below the 100F minimum "flash point" as set forth in Rule Subsection 5F-2.01(2)(b), Florida Administrative Code. The results of the analysis were made known to the Respondent on December 3, 1981. Prior to that date, the Respondent was unaware of this reading below standard related to the "flash point." (A second kerosene sample was taken on December 3, 1981. That sample continued to reveal a "flash point" below 100F.) In view of the results of the November 25, 1981, test related to the kerosene at the Respondent's station, a "Stop Sale Notice" was issued to the Respondent. This was issued in keeping with Section 525.06, Florida Statutes (1980). In lieu of confiscation, a bond was posted in an approximate amount, $4,900.00. This bond amount had been prescribed by an employee for the Petitioner by mistake and subsequent to that time, all of the bond amount, with the exception of $1,000.00 was refunded to the Respondent. It is the $1,000.00 amount that remains in dispute at this time. In excess of 1,800 gallons of the contaminated kerosene had been sold prior to the discovery of this problem. The kerosene in the sample tank in question had been contaminated with gasoline and this combination lowered the "flash point." Kerosene with a low "flash point" is a hazardous substance, particularly when burned in kerosene stoves. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties to this action. Rule Subsection 5F-2.01(2)(b), Florida Administrative Code, makes it a violation to offer for sale kerosene which has a "flash point" of less than 100F. The Respondent offered and in fact did sell kerosene whose "flash point" was established to be 780F, and in the face of such action, violated the aforementioned Rule. This violation would subject the Respondent to the confiscation of the kerosene remaining in the tank in accordance with the penalty provisions set forth in Rule Subsection 5F-2.02 (2)(c) , Florida Administrative Code. In lieu of such confiscation, the Petitioner could accept a bond, not to exceed $1,000.00 which could be converted into a fine, in the face of a finding of a violation of the petroleum standards law. Respondent posted the $1,000.00 bond and that bond amount can be taken as a fine levied against the Respondent for the violation as found. The Petitioner being found in violation, the only matter to be determined is the proper amount of fine to be imposed. The Petitioner is of the persuasion that the full fine should be levied in view of the clear violation; the hazard posed by offering for sale and selling kerosene with a substandard "flash point," and the cost of prosecution to include appearances by consul and witnesses in Jacksonville, Florida, when counsel and those officials were required to travel from Tallahassee, Florida. Respondent, through its representative, detailed the steps that were taken to ensure against a violation of the "flash point" standards related to kerosene. The rendition of facts establishes that the tank in which the subject kerosene had been placed had immediately prior to that placement, contained unleaded premium gasoline. That gasoline had been pumped out; the tank tilted to allow the residue to collect in one confined area and the tank flushed out by water. The delivery tanker, which belonged to the Respondent and which delivered the kerosene, had been used to transport gasoline before that delivery; however, that tanker had been subjected to a purging to remove the gasoline. Respondent was unsure about the condition of the kerosene which had been sold to the Respondent by an outside source and transported by the Respondent's tanker, as this relates to a "flash point" violation prior to delivery. Notwithstanding the efforts by the Respondent to protect against such a violation of "flash point," Respondent concedes that as much as one quarter inch of gasoline residue could have remained in the storage tank at the time kerosene was offered for sale and sold. While Respondent recognizes that the violation established herein is one which does not require proof of "intent" in order to be found responsible for such violation, Respondent, nonetheless, asks that the fine be less than the full $1,000.00, particularly so in the face of the depressed market conditions related to its business. Finally, Respondent, in answering Petitioner's argument related to the cost of prosecution, states that it would have attended a hearing in Tallahassee, Florida, if necessary. Based upon a full consideration of the facts, conclusions of law and matters in aggravation and mitigation, it is RECOMMENDED: That a final order be entered finding the Respondent in violation of Rule Subsection 5F-2.01(2)(b), Florida Administrative Code, and subjecting Respondent to the penalties set forth in Section 525.06, Florida Statutes (1980), and imposing a fine of $750.00, with $250.00 of the bond amount to be refunded to the Respondent. DONE and ENTERED this 19th day of March, 1982, in Tallahassee, Florida. CHARLES C. ADAMS 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 19th March, 1982.
