The Issue The issue in this case is whether or not Petitioner is entitled to a refund of the bond it posted in lieu of confiscation of allegedly mislabelled gasoline products.
Findings Of Fact Petitioner, AGI Service Corporation, owns and operates a Citgo service station located at 1599 West Flagler Street in Miami, Florida. The service station sells regular unleaded, unleaded plus and unleaded premium gasoline to the public. On February 18, 1991, James Carpinelli, the Respondent's inspector, visited the station to conduct an inspection and obtain samples of the gasoline Petitioner was offering for sale to the consuming public from its tanks and related gasoline pumps. Mr. Carpinelli took samples of all three types of gasoline offered for sale by Petitioner. The samples were forwarded to the Respondent's laboratory and were tested to determine whether they met Departmental standards for each type of gasoline. The Petitioner's "premium unleaded" pump indicated the octane or Anti Knock Index of the gasoline was 93. The "regular unleaded" pump indicated that the octane level was 87. The laboratory analysis of the samples revealed that the octane level of the gasoline taken from the "premium unleaded" pump was 87.4. The octane level of the gasoline taken from the "regular unleaded" pump was 93.0. Upon discovering the discrepancy in the octane levels, the Respondent seized the gasoline and immediately allowed the Petitioner to post a bond in the amount of $1,000. Upon the posting of the bond, the product was released back to the possession of the Petitioner and was allowed to be sold after the pumps were relabelled. Petitioner acquired ownership of the service station four days prior to the time of the inspection. At the time they opened the station, the new owners labelled the pumps based upon the information provided to them by the prior owners. The new owners had limited experience in the petroleum business and followed the guidance of the prior owners regarding labelling the pumps. It is clear that the pumps were inadvertently mislabelled based upon the information provided by the prior owners. The new owners sold "premium unleaded" at the price of "regular unleaded" and visa versa. Because more "premium unleaded" was sold at the price for regular, Petitioner lost money as a result of the mislabelling. The Department seeks to assess the full amount of the bond against the Petitioner in this proceeding. Respondent calculated the number of gallons of mislabelled gasoline that was sold based upon a delivery date of February 13, 1991. Those calculations indicate that 2,498 gallons were sold at a price of $1.259 per gallon. However, Respondent's calculations appear to begin at a time prior to Petitioner's ownership of the station. No evidence was presented as to how many gallons were sold while Petitioner owned the station. In addition, it is not clear when the mislabeling was done. Thus, no clear evidence was presented as to how many mislabeled gallons were sold by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Department of Agriculture and Consumer Services enter a Final Order granting the request of the Respondent for a refund of the bond posted and that the Department rescind its assessment in this case. DONE and ENTERED this 4th day of October, 1991, at Tallahassee, Florida. J. STEPHEN MENTON 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 4th day of October, 1991. COPIES FURNISHED: LOUIS PASCALI AND DONATO PASCALI QUALIFIED REPRESENTATIVES AGI SERVICE CORPORATION 1599 WEST FLAGLER STREET MIAMI, FL 33147 JAMES R. KELLY, ESQUIRE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES ROOM 514, MAYO BUILDING TALLAHASSEE, FL 32399-0800 HONORABLE BOB CRAWFORD COMMISSIONER OF AGRICULTURE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES THE CAPITOL, PL-10 TALLAHASSEE, FL 32399-0810 RICHARD TRITSCHLER, GENERAL COUNSEL DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 515 MAYO BUILDING TALLAHASSEE, FL 32399-0800 BRENDA HYATT, CHIEF BUREAU OF LICENSING & BOND DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES 508 MAYO BUILDING TALLAHASSEE, FL 32399-0800
The Issue Was the amendment to Section 12B-5.01, Florida Administrative Code adopted on November 8, 1978, adopted in violation of the procedural requirements of Section 120.54, Florida Statutes? Is the amendment to Section 12B-5.01, Florida Administrative Code an invalid exercise of the Department's delegated legislative authority?
Findings Of Fact Miami Tiresoles, Inc. sells both new and retreaded tires for cars and trucks. The company also sells gasoline and diesel fuel. It is licensed by the Department as a dealer in special fuels. As far as this case is concerned special fuel is number 2 diesel oil. Unless an exemption is met each gallon of special fuel sold by MTS is taxed by the Department at a rate of 8 cents per gallon. The Department has given MTS a revised notice of proposed assessment of tax for the sale of special fuel in the amount of $4,551.88 plus a penalty of $455.48 and interest in the amount of $735.11 (through April 21, 1980). The tax figure on the assessment appears to reflect a typographical error. The Department's records (Exhibit A) indicate that for the period in question 2/ MTS sold 56,936 gallons of special fuel subject to tax according to the Department's interpretation of the law. If a tax at a rate of 8 cents per gallon is due, then the amount due should be $4,554.88 and not $4,551.88. The correct tax figure is reflected on the Department's work sheets but was probably misread when the figure was transferred to the revised Notice of Assessment issued on April 21, 1980. The foregoing assessment is based on MTS' invoices which reflect sales of special fuel to customers in amounts of more than 110 gallons at one time. Those sales were made to MTS customers who have filed with MTS a document called "Purchaser's Exemption Certificate". A typical example of such a certificate states: PURCHASER'S EXEMPTION CERTIFICATE The undersigned hereby certifies that the motor duel (sic) and/or special fuel pur- chased on 1-19-79 is for the following purpose as checked in the space provided. (X) Purchased for home, industrial, com- mercial, agricultural or marine purposes for consumption other than for the propul- sion of a motor vehicle. ( ) Purchased at bulk plant or terminal in volumes of not more than 110 gallons for delivery into a receptacle not connected to the fuel supply system of a motor vehicle for consumption other than for the pro- pulsion of a motor vehicle. Purchaser is aware that if this exemption if (sic) falsely claimed, or if this certi- ficate is not rescinded at the time he fails to quality (sic) for the exemption, he shall be liable for the taxes imposed under Chapter 206, F.S. Furthermore, by issuing this certificate the purchaser also certifies that he does not have any motor vehicles which use special fuel for propulsion. This certificate is to continue in force until revoked by written notice to MIAMI TIRESOLES, INC. Purchaser: Trade Name: A ACME SANDBLASTING, INC. Street Address: 9521 W. Oakmont Dr., Hialeah, Fla. 33015 BY: /s/ The industrial customers of MTS (that is those who have filed an exemption certificate) are engaged in the construction business. They use the diesel fuel to operate bulldozers, front-end loaders, back hoes, sandblasters and similar equipment. None of the fuel is used for the operation of motor vehicles on the public highways of Florida. All the fuel in question is sold on the premises of MTS. At the time of sale it is placed either in the fuel tank of a particular piece of equipment such as a back hoe, or it is placed in a fuel storage tank mounted on the back of a truck. The storage tanks are not connected so they can provide fuel for the propulsion of the truck. They are used to transport fuel to the purchaser's particular job site. The storage tanks have a capacity of between 100 to 300 gallons. MTS does not have delivery trucks of its own and has no facilities for taking fuel to its customers job sites. A single invoice of MTS which indicates a sale of 110 gallons of special fuel to an individual customer is frequently the result of a sale where multiple fuel tanks are filled at one time. For instance, the customer may have a back hoe sitting on the rear of a flat-bed truck. He will fill the fuel tank in his back hoe and then perhaps fill an additional 55 gallon drum or two which would be on the truck. This would occur all in one transaction. The reason why the Department seeks to tax special fuel sold by MTS to its industrial customers in an amount exceeding 110 gallons is because the fuel was placed in the customers' own fuel tanks on the premises of MTS and not on the premises of the customer or at the customer's job site. The amendment to Section 12B-5.01, Florida Administrative Code challenged by Petitioner here was adopted by the Governor and Cabinet, sitting as the head of the Department of Revenue, on November 8, 1978. No hearing was held on the amendment's adoption because no person requested one. Notice of the Department's intent to adopt the rule was given in the October 13, 1978 issue of the Florida Administrative Weekly. At the time the notice was published a copy of the amendment was available for inspection and copying by the public. The notice published in the Florida Administrative Weekly stated: DEPARTMENT OF REVENUE, DIVISION OF MISCELLANEOUS TAX, MOTOR FUEL TAX Rule 12B-5.01 TITLE: Specific Exemption PURPOSE AND EFFECT: To amend the rule which implements Subsection 206.87(4)(a) & (b), F.S. to clarify interpretation of the law. SUMMARY: Provides specifically the requirements necessary in order for the licensed dealer of special fuel to make an exempt sale for home, industrial, commercial, agricultural, or marine purposes and exempt sales of not more than 110 gallons at his place of business, and by cross reference, the records needed to be maintained by the licensed dealer to substantiate the sale. SPECIFIC LEGAL AUTHORITY UNDER WHICH THE ADOPTION IS AUTHORIZED AND THE LAW BEING IMPLEMENTED, INTERPRETED OR MADE SPECIFIC: SPECIFIC AUTHORITY: 206.14(1), 206.59, FS. LAW IMPLEMENTED: 206.87(4)(a)(b), FS. ESTIMATE OF ECONOMIC IMPACT ON ALL AFFECTED PERSONS: There will be no significant economic impact. IF REQUESTED, A HEARING WILL BE HELD AT: TIME: 10:00 A.M. PLACE: The New Capitol, Lower Level 3 DATE: November 9, 1978 A COPY OF THE PROPOSED RULE AND THE ECONOMIC IMPACT STATEMENT MAY BE OBTAINED BY WRITING TO: L. N. Thomas, Chief, Motor Fuel Tax Bureau, Department of Revenue, Carlton Building, Tallahassee, Florida 32304 Individual notices of the proposed rule making were not sent to licensed special fuel dealers in Florida. On October 10, 1978, the Department sent the following items to the Joint Administrative Procedures Committee: A copy of the proposed amendment to Rule l2B-5.01. The notice to appear in the Florida Administrative Weekly. The Economic Impact Statement. The "Summary and Justification Sheet" (apparently the Department's term for the facts and circumstances justifying the proposed rules). The following shows how the Department's amendment adopted on November 8, 1978, changed Section 12B-5.01, Florida Administrative Code. Words stricken were deleted; words underlined were added. 12B-5.01 Specific Exemptions. (1) - (2) - No change. HOMES, INDUSTRIAL. COMMERCIAL, AGRICULTURAL OR MARINE. Any sale of special fuel by a licensed dealer, regardless of quantity, when such fuel is to be consumed exclusively for home, industrial, commercial, agricultural, or marine purposes, is exempt from tax, provided the sale is made by a licensed dealer who delivers the fuel into the customer's storage facility, which must be located on the customer's premises, place of business, or job site. (Cross Reference - Rule 12B-5.03(1). (7)(b) - (6) - No change. (7) SALES OF 110 GALLONS OR LESS. A licensed dealer may deliver, at his place of business, tax free, not more than 110 gallons of special fuel to a person who is not a licensed dealer of special fuel, provided the fuel is placed into a receptacle which is furnished by the purchaser and which is not connected to the fuel supply system of a motor vehicle. (Cross Reference - Rule 12B-5.03(1), (7)(b) Any licensed dealer of special fuel who, at his place of business, delivers more than 110 gallons of special fuel to a person who is not a licensed dealer of special fuel, shall be liable for and shall pay to the state taxes, penalties and interest on the total quantity sold even though the fuel may not be ultimately used to propel a motor vehicle on the highway.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order: (1) declaring that Southeast Liquor Importers has not shown "good cause" under Section 565.095(5), Florida Statutes (1983), for withdrawal of the registered brand Aguardiente Antioqueno from Florida Beverage Corporation; and (2) prohibiting Southeast Liquor Importers from withdrawing Aguardiente Antioqueno from Florida Beverage Corporation. RECOMMENDED this 20th day of September, 1984 in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of September, 1984.
Findings Of Fact On February 27, 1980, Respondent converted one of its service station fuel tanks from gasoline to diesel. The tank was cleaned by Garrison Petroleum Equipment Company at Pinellas Park. Respondent paid $67.08 for this service. That same day, Respondent received 5,176 gallons of No. 2 diesel fuel from Jack Russell Oil Company, Inc., of Clearwater, a Union 76 dealer. On March 18, 1980, a standards inspector employed by Petitioner took samples from the Respondent's gasoline and diesel pumps. These samples were delivered to Petitioner's portable laboratory in Clearwater where they were analyzed. The gasoline was found to be satisfactory, but the diesel sample showed fuel contamination. The tests were conducted in accordance with the methods and standards established by Rule 5F-2.01(4)(b), Florida Administrative Code. Specifically, the "flash point" of the diesel sample was 88 degrees F, but must be 125 degrees F or above to meet the established standard. Petitioner's inspector then returned to the Pronto Car Wash station where he issued a stop-sale order to Respondent. Subsequently, the inspector accepted Respondent's cash bond in lieu of fuel confiscation. This procedure, agreed to by both parties, allowed Respondent to pay $865.36 to the State of Florida and retain the contaminated fuel. Respondent originally paid $5,286.25 for 5,176 gallons of diesel fuel. He had sold 736 gallons of this amount at the time of the stop-sale order on March 18, 1980. Total sales of this diesel fuel amounted to $865.36, which was the amount of bond demanded by Petitioner. Respondent paid $200 to Patriot Oil, Inc., to remove the contaminated fuel, but received a $3,225 credit for this fuel. Respondent does not deny that the fuel was contaminated, but seeks to establish that he acted in good faith. Respondent had the tank cleaned prior to the diesel changeover and dealt with established tank cleaning and fuel wholesaling companies. In addition, he kept the tank locked at all times after delivery of the fuel. Respondent does not contest forfeiture of his bond, but seeks refunds of state and federal taxes paid on the unsold fuel. However, Respondent was correctly informed that refund of tax payments will require him to communicate with agencies which are not parties to this proceeding.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That Petitioner enter its order declaring forfeiture of Respondent's $865.36 bond posted in lieu of confiscation of contaminated diesel fuel. RECOMMENDED this 7th day of August, 1980, in Tallahassee, Florida. COPIES FURNISHED: Stephenson Anderson Pronto Car Wash 220 34th Street North St. Petersburg, Florida 33713 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 John Whitton, Chief Gasoline and Oil Section Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 R. T. CARPENTER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-8584
Findings Of Fact The Petitioner was acquired by Mr. Farish in November 1985. The Petitioner is a Georgia corporation. In December 1985, the Petitioner bid on a federal contract to provide fuel to federal installations in the southeastern United States. The Petitioner was awarded a contract to provide fuel oil for off-road use at Patrick Air Force Base, which is located in Florida. The Petitioner requested an application from the Department of Revenue for a special fuel license. The Petitioner was sent a motor fuel license application instead of a special fuel license application. The Petitioner filed the motor fuel license application with the Department of Revenue. The Petitioner subsequently filed a special fuel license application. It was received and validated by the Department of Revenue on June 24, 1986. The Petitioner was informed on July 9, 1986, that in order to receive the license, the Petitioner needed to file a copy of a certification to do business in Florida, which could be obtained from the Secretary of State's office. On or about January 9, 1987, the Petitioner forwarded to the Department of Revenue the certification from the Secretary of State's office needed to complete the Petitioner's license application. The Petitioner's special fuel license was issued and became effective January 9, 1987. The Petitioner began purchasing and selling special fuel in Florida on or about April 1, 1986. Between April 1, 1986 and January 9, 1987, the Petitioner paid $7,995.86 in Florida fuel tax liability for purchases of special fuel in Florida. On or about February 25, 1987, the Petitioner filed an application for special fuel tax refund in the amount of $7,995.86. The Respondent denied the tax refund application filed by the Petitioner by Order dated March 18, 1987.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order denying the Petitioner's application for refund be issued by the Respondent. DONE and ENTERED this 18th day of August, 1987, in Tallahassee, Florida. LARRY J. SARTIN 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 18th day of August 1989. APPENDIX TO RECOMMENDED ORDER CASE No. 87-1641 Only the Respondent filed a proposed Recommended Order containing proposed findings of fact. The Respondent failed to number its proposed findings of fact. The Respondent has, however, only proposed essentially 3 proposed findings of fact: that the Respondent denied the Petitioner's claim for refund and the justification therefore, the Petitioner made four admissions and the Petitioner is a Georgia corporation. The Respondent's first proposed finding of fact has been accepted in paragraph 12, the second proposed finding of fact has been accepted in paragraphs 6-8 and the third proposed finding of fact has been accepted in paragraph 1. COPIES FURNISHED: Honorable Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0305 James E. Farish, Jr. President Lincoln Oil Co., Inc. Post Office Box 2904 Gainesville, Georgia 30503-0294 Edwin A. Bayo, Esquire Assistant Attorney General Department of Legal Affairs Tax Section The Capitol Tallahassee, Florida 32399-1050
Findings Of Fact On October 7, 1982, petitioner's employee took samples of gasoline offered for sale at respondent's Beacon Store No. 7 in Milton, Florida, including a sample of regular gasoline mixed with alcohol, known as "regularhol." The regularhol sample reached petitioner's laboratory in Tallahassee on October 11, 1982, and tests done the following day revealed that the 50 percent evaporated distillation temperature of the mix as a whole was 151 degrees Fahrenheit. Otherwise the tests revealed no problem with any of the gasolines sampled. A stop sale notice issued on October 13, 1982, and, after bond in the amount of one thousand dollars ($1,000.00) was posted, in lieu of confiscation of 3,865 gallons, the "regularhol" was released on November 8, 1982. Respondent began mixing regular gasoline with ethanol and selling it as regularhol in 1978 at the same price as regular gasoline. Until recently, Mocar made less on regularhol sales than on sales of regular gasoline. It originally offered regularhol as its way of helping to reduce the national consumption of petroleum. It has now discontinued sales of regularhol. The Phillips' terminal in Pensacola was respondent's source of the regular gasoline it mixed to make regularhol. This gasoline reached Pensacola by barge, and petitioner's employees sampled and tested each barge's cargo. The 50 percent evaporated distillation temperature of the regular gas Mocar bought from Phillips varied over a range of more than 30 degrees Fahrenheit upwards from 181 degrees Fahrenheit. Mixing ethanol with the gasoline lowered its distillation temperature, but with the single exception of the batch sampled on July 14, 1982, Mocar's regularhol had passed the testing petitioner has regularly (once every three or four months) conducted. There had also been a problem with gasohol once before.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That petitioner retain five hundred dollars ($500.00) and return five hundred dollars ($500.00) to the respondent. DONE and ENTERED this 2nd day of June, 1983, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of June, 1983. COPIES FURNISHED: Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 James Milton Wilson, Esquire 201 E. Government Street Pensacola, Florida 32598 Doyle Conner, Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol Tallahassee, Florida
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 On June 28, 1978, the respondent Department of Environmental Regulation gave notice that the Environmental Regulation Commission would consider the adoption of an emergency rule at their regularly scheduled meeting on July 12, 1978. The impetus for such an emergency rule was apparently the results of the Florida Sulfur Oxides Study which were orally presented to the Commission at a meeting held on June 20-22, 1978. The study is an eleven volume text, parts of which were separately submitted to the Commission in January, February, and April of 1978, involving the environmental effects of sulfur dioxide and related matters. The written final report was submitted in May of 1978. Pursuant to the provisions of Florida Statutes, Section 120.54(4), petitioner Florida Lung Association filed with the Division of Administrative Hearings its "petition for determining the validity of a proposed emergency rule" on July 7, 1978. The emergency rule was approved by the Environmental Regulation Commission at its meeting on July 12, 1978, and said rule was filed with the Secretary of State on July 14, 1978. On the same date, July 14th, Florida Power and Light Company and Jacksonville Electric Authority filed their motion to intervene in the rule challenge proceeding. On July 16, 1978, Jacksonville Electric Authority filed its motion to dismiss the petition. The cause was noticed for hearing on July 19, 1978. On July 20th, Florida Power and Light filed its motion to dismiss. On July 26, 1978, the Division of Administrative Hearings received petitioner's amendment to the petition seeking relief pursuant to the provisions of Florida Statutes, Section 120.56, should relief under Florida Statutes, Section 120.54 be deemed improper. The petitioner and the Department of Environmental Regulation entered into a Stipulation prior to the hearing agreeing as to certain factual matters and stipulating that the Florida Lung Association is a substantially interested party in the proceeding and had standing to bring this action. The undersigned was duly designated by the Director of the Division of Administrative Hearings as the Hearing Officer in this proceeding. It was determined by her that all pending motions would be heard and ruled upon at the time of the scheduled hearing inasmuch. as the time constraints imposed upon rule challenge proceedings did not allow for all parties to respond in writing to all motions within the seven day period specified by Rule 28-5.25(3), F.A.C., and inasmuch as the Hearing Officer was to be out of town on the three days prior to the hearing. At the beginning of the hearing on July 28, 1978, the undersigned granted the motions to intervene. The motions to dismiss were based upon the allegations that petitioner lacked standing to challenge the emergency rule in question; that the Environmental Regulation Commission, rather than the Department of Environmental Regulation, was the agency whose rule was being challenged and that an emergency rule cannot be contested under Florida Statutes, Section 120.54(4) The undersigned denied both motions to dismiss. It was and is concluded from the pleadings, the evidence adduced at the hearing and the stipulation between petitioner and respondent that the petitioner herein does have standing to challenge the emergency rule in question. Respondent the proper agency to be named in this proceeding, inasmuch as the Environmental Regulation Commission (ERC) is simply a part of that agency and sits as the agency head on certain specified matters. While Chapter 120 does not appear to make adequate provision for a challenge to a proposed emergency rule, that issue is now moot in light of the presently existing status off the challenged rule and the amendment to the petition alleging a cause of action under Florida Statutes, Section 120.56. As amended by Chapter 78-425, Laws of Florida (SB 860) Section 120.56 now provides explicitly for challengers to the validity of emergency rules before the Division of Administrative Hearings. Turning now to the merits of the petition, as amended, it is contended that the rule in question is an invalid exercise of legislative authority because no immediate danger to the public health, safety or welfare existed which would justify the enactment of an emergency rule pursuant to Florida Statutes, Section 120.54(9). The factual background of the emergency rule is not in dispute. On April 7, 1977, respondent adopted a rule which permitted Florida Power and Light and Jacksonville Electric, the intervenors herein, to burn a higher sulfur content fuel at their respective plants in Manatee and Duval Counties until August 1, 1978. On that date, those plants would be required to burn fuel with a lower sulfur content. On June 15, 1977, the ERC considered a proposed rule which would extend the time within which the intervenors herein could burn the higher sulfur content fuel from August 1, 1978, to February 1, 1979. The Commission refused to approve this proposed rule and it was not enacted. On June 20-22, 1978, the Commission was given an oral presentation of the results of the Florida Sulfur Oxides Study. As a result of this meeting, the Commission gave notice on June 28, 1978, of its intent to consider an emergency rule allowing the intervenors to extend the date for burning higher content fuel from August 1, 1978, until October 1, 1978. The Commission considered the emergency rule at its meeting held on July 12, 1978, approved it and filed it with the Secretary of State on July 14, 1978. The ERC gave the following "specific reasons for finding an immediate danger to public health, safety and welfare": If the emergency rule is not immediately adopted and Section 17-2.05(6), Table II, Item E(1)(c), F.A.C., amended, the cost to Florida Power & Light Company and Jacksonville Electric Authority to use lower sulfur fuel between August 1, 1978 and October 1, 1978 will be $1,373,000.00. This cost will be directly passed on to the customers of these utilities through fuel adjustment provisions. The additional cost would be paid to foreign countries for the purchase of oil. These passed on costs are not warranted in light of the fact that the Environmental Regulation Commission is presently considering to permanently amend by October 1, 1978 Section 17-2.p.5(6), Table II, Item E(1)(c), F.A.C., so that both of these power plants may use at least the higher sulfur fuel allowed by the emergency rule. As a result of the Florida Sulfur Oxides Study, the presentations made pursuant thereto at the June 20, 21 and 22, 1978 Environmental Regulation Commission Hearing, and the bearing held on this emergency rule on July 12, 1978, the Commission finds no significant environmental benefits to be gained by using the lower sulfur fuel during the two months period. (Copies of the monitoring data for these two power plants modeling data for the Manatee power plant and the Florida Sulfur Oxides Study may be inspected at the address below.) Both of these power plants have been using the sulfur content fuel proposed in the emergency rule since June of 1977 without violating any of the applicable ambient air quality standards. Also because of the large amounts of oil purchased at one time by the utilities and the lead time required for such purchases, it would not be economical for the utilities involved to order a different sulfur content fuel for only a two month period. Accordingly, unless the emergency rule is enacted the customers of these utilities will be charged $1,373,000.00 without obtain- ing any significant environmental benefits and the utilities will be unable to economically purchase fuel. These facts present an immediate danger to the public health, safety and welfare which can only be remedied by the enactment of the emergency rule and by making this emergency rule effective as of the date of filling (sic) or July 13, 1978 whichever is earliest. It was further stated, as "reasons for concluding that procedure used is fair under the circumstances" that the emergency rule procedure was the only procedure available to grant the relief required in that a permanent rule could not be promulgated in time. The Commission noted that the emergency rule was only effective for a two-month period "at which time the Commission will decide on a permanent rule pursuant to Chapter 120 Florida Statutes, for these two power plants." The transcript of the hearing held by the ERC on July 12, 1978, makes it abundantly clear that the Commission did not consider the adoption of the emergency rule to be a commitment to adopt a similar permanent rule which would be effective subsequent to October 1, 1978. Indeed, it was stated by several Commissioners that the entire matter would be dealt with anew and on its merits in September. Were there no emergency rule in effect permitting the intervenors to burn the higher sulfur content fuel, it would cost Florida Power and light $680,000.00 to purchase the lower content fuel for the two month period of August, and September. This cost would be passed on the the consumer. The cost to the average residential customer using one thousand kilowatt hours of electricity would be thirteen cents ($.13) per month. For the average utility bill, this would result in an increase of .03 percent. For Jacksonville Electric, the same costs are $693,000.00 or approximately $1.65 per month per average residential consumer, or a 3.5 percent increase in the average utility bill. The higher sulfur content fuel results in an additional discharge of from 2.4 to 2.6 tons of sulfur dioxide per hour into the air. Neither the Jacksonville nor the Manatee County plants have violated the State's ambient air quality standard during the one and a half years they have been permitted by rule to burn the higher content fuel. Section 120.54(9), Florida Statutes, permits agencies to avoid the formalities of proper rulemaking procedures only when there is a bona fide finding that "an immediate danger to the public health safety, or welfare requires emergency action." Thus, in order to sustain the exercise of emergency action, there must be a clear showing of danger to the public health, safety or welfare and that danger must be shown to be an immediate danger. As recognized in Fuller v. Gardner, 190 So. 442 (Fla. 1939), an agency's assumption of emergency powers in the absence of a bona fide emergency violates basic rights of due process, and constitutes a usurpation of power. A review of the testimony and the record of this proceeding does not support respondent's finding of either a danger to the public health, safety or welfare or an immediacy necessitating emergency action. The substance of the emergency rule -- permission to burn a higher sulfur content fuel than would otherwise be permitted -- certainly does not alleviate or obviate some immediate danger to the public health or safety. Petitioner's only witness on this subject testified that any ingested particles of sulfur dioxide could cause damage to the human lung. However, there was no testimony as to whether the higher sulfur contents allowed by the rule, as opposed to the lower content which would be binding upon the intervenors in the absence of a rule, would present a definite health hazard to residents of Duval or Manatee Counties. Nevertheless, the respondent's own statement of specific findings and reason's of immediate danger do not illustrate an emergency situation with regard to public health or safety. These findings are that there are "no environmental benefits to be gained by using the lower sulfur fuel during the two months period." A mare showing of no harm is not sufficient to satisfy the statutory test for the adoption of emergency rules. The statute requires an immediate danger to the public health. The fact that there may be no significant environmental benefit if a rule is not enacted simply does not justify noncompliance with proper rulemaking procedures. This then leaves the issue of whether there is an immediate danger to the public welfare absent the enactment of the emergency rule. The concept of public welfare is broad and embraces a variety of interests, including monetary and economic interests. It was the testimony of petitioner's expert witness on this subject that the costs involved if the intervenors were required to burn the lower sulfur content fuel would be passed on to the average consumer at the rate of increases in their utility bills of .03 and 3.5 percent. This witness opined that such an increase would not be significant for a two-month period and that the impact on the Florida economy would be inconsequential. There simply is no evidence in the record herein to illustrate that the situation was of such a nature that normal rulemaking procedures were precluded. Even if it were conceded that the total expenditure of $1,373,000.00 could have an adverse impact upon the Florida economy, where is the urgency or immediacy which must exist prior to the exercise of emergency rulemaking procedures? The rule sought to be amended has been in effect since April of 1977. It was to self-destruct on August 1, 1978. The agency was aware of this, as were the intervenors. When confronted in June of 1977 with a request to extend the rule's operation to February 1, 1979, the Environmental Regulation Commission refused the request and failed to so amend the rule. The first three volumes of the Florida Sulfur Oxides Study came in to the Commission in January, 1978. Six volumes were received in February, and the remaining two volumes were received in April, 1978. In May, the ERC received the final written report. Apparently, the summarizing results were orally presented to the Commission at a meeting held on June 20, 21 and 22, 1978. The transcript of the Commission's - July 12, 1978, hearing on the emergency rule, as well as the findings and reasons attending the emergency rule, indicate that the Commission still has not reached a decision as to whether the rule's contents will be repromulgated to be effective after October 1, 1978. 1/ Thus, it appears that any immediate danger in July of 1978 was not created by newly acquired knowledge concerning the effect of the emission of certain levels of sulfur dioxide into the air or by some sudden change which would adversely affect Florida's economy. The emergency was therefore not created by considerations of the public health, safety or welfare. Rather, if there was an emergency at all, it was created by an avoidable administrative failure to properly amend the existing rule to provide an extension for the desired time period. As clearly held in Postal Colony Co., Inc. v. Askew, 348 So.2d 338 (Fla. App. 1st 1977), an emergency created wholly by an agency's failure to take timely action cannot justify extraordinary measures. The emergency rule provisions of Florida Statutes, Section 120.54(9) constitute an extraordinary means of adopting a rule when a true emergency exists which makes compliance with normal rulemaking procedures impossible. The record in this case is barren of evidence that, in mid-July of 1978, there was an immediate danger to the public health, safety or welfare requiring emergency action. IT IS THEREFORE ORDERED THAT the respondent's emergency rule 17ER78-1, which purports to amend Section 17-2.05(6), Table II, Item E(1)(c), F.A.C., by extending the date from August 1, 1978, to October 1, 1978, constitutes an invalid exercise of legislative authority. Done and entered this 7th day of August, 1978, in Tallahassee, Florida. DIANE D. TREMOR, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675
