Findings Of Fact Based upon all of the evidence, including the stipulation of facts, the following findings of fact are determined: Petitioner, Florida Surplus Lines Association, Inc. (Association), is a Florida nonprofit corporation organized and maintained for the benefit of its members who include surplus lines agents and insurers and others who place surplus lines insurance. Petitioner's members are licensed or regulated by the Department of Insurance pursuant to Part VIII of Chapter 626, Florida Statutes. The parties have stipulated that petitioner has standing to bring this action on behalf of its members. Surplus lines insurance is a specialty line of insurance written for certain types of risks that authorized insurance carriers (those holding a certificate of authority) will not or cannot cover. It constitutes a limited, out-of-state insurance market that supplements the "authorized" in-state insurance market. Thus, when Florida residents cannot obtain coverage from authorized Florida insurers, they may seek insurance from out-of-state insurers (not authorized to do business in the state) who "export" the coverage to Florida surplus lines insurers who then handle the placement of the insurance. Under this statutory scheme, petitioner's members are not authorized insurers who hold certificates of authority but rather they are made "eligible" by the Department of Insurance to receive exported business. They do, however, countersign surplus lines policies covering Florida risks. On April 29, 1993, Chapter 93-128, Laws of Florida, became effective. The new law was the result of the extensive damage caused by Hurricane Andrew, which struck the southeastern coast of Florida in late August 1992. Section 2 of the law created an emergency management, preparedness, and assistance trust fund to be administered by the Department of Community Affairs and funded by the imposition of an annual surcharge of $2.00 on "every homeowner's, mobile homeowner's, tenant homeowner's, and condominium unit owner's policy" and $4.00 on "every commerical fire, commercial multiple peril, and business owner's property insurance policy" issued on or after May 1, 1993. Therefore, the new law applied to all residential and commercial casualty policies issued on or after May 1, 1993. Petitioner's members offer policies that fall within these broad categories. The same section required the surcharge to be paid by the policyholder and collected and remitted by the insurer. Since petitioner's members are engaged in the business of offering insurance policies, and they countersign property insurance policies, they are "insurers" as that word is commonly used and understood. Finally, section 2 has been codified as Section 252.372, Florida Statutes (1993). Section 2 of chapter 93-128 provided further that respondent, Department of Revenue (DOR), "shall collect, administer, audit, and enforce the surcharge pursuant to section 624.5092, Florida Statutes." This meant that DOR would utilize the procedures outlined in section 624.5092 for administering and collecting the newly-imposed tax. That statute prescribes the manner in which taxes should be paid to and collected by DOR. To implement this new responsibility, on August 20, 1993, DOR published notice in the Florida Administrative Weekly of its intent to adopt new rule 12B-8.0012. The proposed rule, which is quite lengthy in text, reads as follows: 12BN-8.0012 Insurance Policy Surcharge: Rate and Computation. Every insurer, including surplus lines and surplus lines agents, must collect a surcharge of $2 and $4 from the policyholders of certain types of property insurance issued or renewed on or after May 1, 1993. The proceeds will be deposited into the Emergency Management, Preparedness, and Assistance Trust Fund. The $2 surcharge applies to each residential dwelling fire policy, homeowner's, mobile homeowner's, tenant homeowner's, condominium unit owner's, and any other type of insurance coverage on residential property, issued or renewed on or after May 1, 1993. The $4 surcharge applies to each commercial fire, commercial multiple peril, and business owner's property insurance policy issued or renewed on or after May 1, 1993, including marine policies if the coverage includes real property. The surcharge does not apply to policies on tangible personal property, except multiple peril type policies on residential or commercial property and mobile homes. For purposes of this rule, the date of issue or renewal shall be the effective date of the policy. The surcharge applies to all policies issued or renewed even if they are subsequently cancelled. However, if the policy is cancelled back to the effective date, the surcharge shall not apply. The surcharge must be collected by the insurer from the policyholder and must be remitted in the same manner as the insurance premium tax to the Department of Revenue on Form DR-907, Insurance Premium Tax Quarterly Return, and on Form DR-908, Insurance Premium Tax Return. The surcharge on surplus lines policies must be remitted by the surplus lines agents, unless the surplus lines insurer collects and remits the surcharge, and must be remitted on Form DR-907 and Form DR-908. The surcharge is required to be remitted by the surplus lines agent for only the surplus lines policies. The authorized insurer is required to collect and remit the surcharge for all other policies. The $250 quarterly and annual filing fees do not apply to either the surplus lines agent or the surplus lines insurer. The insurance premium tax on surplus lines will continue to be remitted to the Department of Insurance as required. The surcharge is required to be remitted on the required return for the calendar quarter the policy is issued or renewed without regard to the collection of the surcharge from the policyholders. The insurer is responsible for collecting the surcharge and may cancel the policy for nonpayment of the surcharge. The first installment on the surcharge was due June 15, 1993, for May and June with the subsequent installment due on October 15 for the calendar quarter ending September 30. A separate line denoting the surcharge is provided on the revised Form DR-907 and the revised Form DR-908, annual return, which is due by March 1. The estimated payment must be based on at least 90 percent of the actual number of policies subject to the surcharge to avoid penalty and interest as provided in s. 624.5092, F.S. Penalty and interest may be compromised as provided in s. 213.21, F.S. The surcharge is not considered to be a part of the premium charge, and is therefore not subject to the insurance premium tax. The surcharge is imposed on the policy- holder and will not be considered for retaliatory tax purposes whether or not the surcharge is collected from the policyholder. The text of the notice identified Subsection 213.06(1), Florida Statutes, and Chapter 93-128, Laws of Florida, as the specific authority for adopting the rule and Section 624.5092, Florida Statutes, and Chapter 93-128, Laws of Florida, as the laws being implemented. Finally, the notice summarized the new rule as one which "provid(ed) guidance for computing and remitting the $2 and $4 surcharge," and further stated its adoption was "needed to conform the rule to the 1992 and 1993 statutory revisions." Of significance to this controversy are all or parts of sections (1) and (8) of the proposed rule which expressly provide that the surcharge is applicable to surplus lines policies. Petitioner generally contends that surplus lines policies were not specifically referred to in either chapter 93- 128 or section 624.5092 and thus the surcharge was not intended to apply to that type of transaction. For this reason, among others, it argues that the proposed rule goes beyond the terms of the enabling statutes. In 1989, Chapter 89-167, Laws of Florida, created Section 624.5092, Florida Statutes, which transferred the responsibility for the administration and collection of all taxes enumerated in subsection 624.5092(3) from the Department of Insurance to DOR. That subsection identifies Sections 624.5091, 624.4425, 624.475, 624.509-624.515, 627.356, 627.357, 629.5011, 637.406, 651.027, and 440.57, Florida Statutes, as the taxing statutes which DOR is obligated to administer. Omitted from this subsection are Section 626.932, Florida Statutes, which imposes a premium receipts tax on surplus lines insurance transactions, and Section 626.933, Florida Statutes, which sets forth the procedure for collecting that tax. Therefore, surplus lines insurance transactions are not identified as being subject to the administration procedures in subsection 624.5092(3). The parties have stipulated that under section 624.5092 DOR is authorized to administer, collect and enforce insurance taxes prior to 1989 on all open years for all insurers subject to Section 624.509, Florida Statutes. They have also stipulated that DOR has the authority to assess surcharges and tax for all insurers that are subject to Sections 624.509 and 624.5091, Florida Statutes. These two statutes pertain to the payment of a premium tax and retaliatory tax, respectively, by insurers holding a certificate of authority. Surplus lines insurers do not possess such authorization. Neither chapter 89-167 nor chapter 93-128 amended sections 626.932 or 626.933. As noted earlier, those sections impose a surplus lines tax and the manner for collecting the same, respectively. Also, they did not amend subsection 624.5092(3) to include any tax imposed by Part VIII of chapter 626, the state surplus lines act. Section 4 of chapter 93-128 amended subsection 624.5092(1) by adding the underscored language below: The Department of Revenue shall administer, audit and enforce the assessment and collection of those taxes to which this section is applicable. The Department of Insurance is authorized to share information with the Department of Revenue as necessary to verify premium tax or other tax liability arising under such taxes and credits which may apply thereto. Besides the substantive contentions, petitioner also contends the rule's economic impact statement (EIS) is inadequate because DOR did not consider the rule's impact on small businesses. In making that assessment, DOR utilized the provisions of Subsection 120.54(2)(a)1.-5., Florida Statutes, and found the impact on small businesses to be minimal, that is, affected persons need only file a two page form on a quarterly basis reflecting the number of surplus lines policies issued or renewed during the preceding quarter. Given these minimal statutory requirements, DOR could not consolidate or simplify the reporting requirements, exempt small businesses, establish less stringent schedules, establish alternative performance standards, or create less stringent reporting requirements. Finally, copies of the proposed rule were sent to the minority business sections of the Department of Commerce and Department of Management Services, and DOR did not receive any reply or comment from those agencies. DOR did not receive a request for an economic impact statement from any affected person. Also, it received no information regarding any economic impact on any businesses affected by the proposed rule or on the size of businesses affected by the proposed rule prior to the initiation of this proceeding. Although some of petitioner's members qualify as small businesses as that term is defined within Section 288.703, Florida Statutes, and petitioner advised DOR of its position regarding the invalidity of the proposed surcharge, there is nothing of record to indicate that petitioner, or any of its members individually, specifically requested preparation of an EIS or provided information sufficient to make DOR aware of specific concerns regarding the economic impact of the proposed rule.
