Findings Of Fact Standing. The Petitioner, Darryl McGlamry, is an inmate in the custody of the Respondent, the Department of Corrections. The Petitioner is subject to the rules of the Respondent, including the rule at issue in this proceeding. The Respondent. Section 944.09, Florida Statutes, requires that the Respondent adopt rules governing the administration of the correctional system in Florida. The Challenged Rule, Rule 33ER91-2, Florida Administrative Code. On January 23, 1991, the Respondent filed Rule 33ER91-1. This emergency rule was filed by the Respondent to alleviate problems created by a high increase in the number of close custody inmates caused by changes in the Respondent's rules during 1990. Pursuant to Section 120.54(9)(c), Florida Statutes, Rule 33ER91-1 was only effective for ninety (90) days. Therefore, Rule 33ER91-1 was due to expire on or about April 24, 1991. On April 23, 1991, the Respondent filed the Challenged Rule. The Challenged Rule is identical in its terms to Rule 33ER91-1. The Challenged Rule should have expired on July 22, 1991. The instant challenge was instituted on May 8, 1991, before the Challenged Rule expired. The amendments to Chapter 33-6, Florida Administrative Code, filed by the Respondent on July 1, 1991, do not repeal the effect of the Challenged Rule prior to July 1, 1991.
The Issue Whether Florida Administrative Code Rule 61G4-15.008, constitutes an invalid exercise of delegated legislative authority because it enlarges, modifies, or contravenes Section 489.129(1)(a), Florida Statutes, and because it exceeds Respondent’s rulemaking authority; and Whether an interpretation of Section 455.227(1)(h), Florida Statutes, constitutes an unpromulgated “rule.”
Findings Of Fact The first 12 findings of fact are facts contained in the Stipulation: Prior to June 2005, Petitioner, Juan Cuellar, Luis Garcia, and Gerardo Quintero, received what appeared to be a valid Miami-Dade Building Business Certificate of Competency. Upon receipt, Petitioners applied to the Department of Business and Professional Regulation (hereinafter referred to as the “Department”), to obtain a registered contractor’s license using the Certificates of Competency. Based on the Certificates of Competency, the Department issued each Petitioner a registered contractor’s license bearing license numbers RG291103667 (Mr. Cuellar), RF11067267 (Mr. Garcia), and RF11067268 (Mr. Quintero). Petitioners each applied for a certificate of authority for their respective businesses, Cuellar Construction and Drywall (Mr. Cuellar), A.P.A. Plumbing Corp. (Mr. Garcia), and Q Plumbing Services Corp. (Mr. Quintero). Based on the fact the Certificates of Competency and the registered contractor’s licenses had been granted, the Department issued a certificate of authority to Cuellar Construction and Drywall, QB 41342; APA Plumbing Corp., QB 42763; and Q Plumbing Services Corp., QB 42825. At the time the Department issued Petitioners their registered contractor’s licenses and subsequent certificates of authority, it did so based solely on the Miami-Dade Building Business Certificates of Competency presented by Petitioners and the only information submitted to it. The parties stipulate that Petitioners were not entitled to their registered contractor’s licenses and certificates of authority because the Miami-Dade Building Business Certificates of Competency were not valid certificates. At the time of their applications to the Department, Petitioners were not qualified by any local jurisdiction or any other method necessary to receive a registered contractor’s license from the Department. The Department filed Administrative Complaints against Petitioners for the suspension or revocation of their licenses based on violations of Sections 489.129(1)(a), 489.129(1)(d), 489.129(1)(m), and 455.227(1)(h), Florida Statutes (hereinafter collectively referred to as the “Administrative Complaints”). (All references to Sections of Chapter 489, Florida Statutes, as they relate to the Administrative Complaint are to the 2005 version. All other references to Florida Statutes are to the 2007 version). Each Petitioner challenged the Administrative Complaint filed against him in DOAH Case No. 07-2823PL (Mr. Cuellar), DOAH Case No. 07-2824PL (Mr. Garcia), and DOAH Case No. 07-2825PL (Mr. Quintero). On December 13, 2007, the undersigned, as the Administrative Law Judge to whom the cases had been assigned, issued a Recommended Order in DOAH Case No. 07-2823PL (Mr. Cuellar), DOAH Case No. 07-2824PL (Mr. Garcia), and DOAH Case No. 07-2825PL (Mr. Quintero), determining that Petitioners violated Sections 489.129(1)(a), 489.129(1)(m), and 455.227(1)(h), Florida Statutes (hereinafter referred collectively as the “Recommended Orders”). The “Recommendation” in each of the Recommended Orders was, except for the name of the Respondent, the same as the following: Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department finding that Luis Garcia violated the provisions of Sections 489.129(1)(a) and (m), and 455.227(1)(h), Florida Statutes, as alleged in Counts I, III, and IV of the Administrative Complaint; dismissing Count II of the Administrative Complaint; requiring that Respondent pay the costs incurred by the Department in investigating and prosecuting this matter; giving Respondent 30 days to voluntarily relinquish his license; and revoking Respondent’s license if he fails to voluntarily relinquish it within 30 days of the final order. Based upon the foregoing, and the fact that no final decision has been entered by the Construction Industry Licensing Board (hereinafter referred to as the “Board”), Petitioners are facing the possible revocation or voluntary relinquishment of their licenses (an adverse impact whether they are “entitled” to the licenses or not), continued defense against the Administrative Complaints, and the payment of the cost incurred by the Department in prosecuting the Administrative Complaints. Should the Board revoke Petitioners’ licenses, they will also be precluded from re-applying for licensure for a period of five years pursuant to Section 489.129(9), Florida Statutes. Petitioners face the same consequence even if they voluntarily relinquish their license pursuant to Florida Administrative Code Rule 61G4-12.017(3)(a). The adverse consequences of the possible final action on the Administrative Complaints which they face stem in part from a finding that they have violated Section 489.129(1)(a), Florida Statutes, which provides the following: The board may take any of the following actions against any certificateholder or registrant: place on probation or reprimand the licensee, revoke, suspend, or deny the issuance or renewal of the certificate, registration, or certificate of authority, require financial restitution to a consumer for financial harm directly related to a violation of a provision of this part, impose an administrative fine not to exceed $10,000 per violation, require continuing education, or assess costs associated with investigation and prosecution, if the contractor, financially responsible officer, or business organization for which the contractor is a primary qualifying agent, a financially responsible officer, or a secondary qualifying agent responsible under 489.1195 is found guilty of any of the following acts: Obtaining a certificate, registration, or certificate of authority by fraud or misrepresentation. . . . . Petitioners were found in the Recommended Orders to have violated Section 489.129(1)(a), Florida Statutes, based upon an interpretation of that statutory provision adopted by the Board in Florida Administrative Code Rule 61G4-15.008, an existing rule which Petitioners have challenged in this proceeding (hereinafter referred to as the “Challenged Existing Rule”), which provides: Material false statements or information submitted by an applicant for certification or registration, or submitted for renewal of certification or registration, or submitted for any reissuance of certification or registration, shall constitute a violation of Section 489.129(1)(a), F.S., and shall result in suspension or revocation of the certificate or registration. Essentially the same conclusions of law were reached in the Recommended Orders concerning the application of the Challenged Existing Rule (in paragraphs numbered “23” through “25” or “25” through 27” of the Recommended Orders): While Respondent has not been specifically charged with a violation of Florida Administrative Code Rule 61G4- 15.008, the Department cited the Rule, which contains the following interpretation of what constitutes "[o]btaining a certificate, registration, or certificate of authority by . . . misrepresentation" in violation of Section 489.129(1)(a), Florida Statutes, in support of Count I of the Administrative Complaint: . . . . It is the Department’s position, that despite the fact that Respondent did not commit “fraud” in obtaining his license and a certificate of authority for [the business] and, in fact, did not knowingly submit false information to the Department in obtaining his license and the certificate of competency, “[m]aterial false statements or information” were nonetheless submitted by Respondent in support thereof. Florida Administrative Code Rule 61G4- 15.008, in defining what constitutes the act of "[o]btaining a certificate, registration, or certificate of authority by . . . misrepresentation” eliminates the need for the Department to prove any knowledge on the part of Respondent that he has made a material misrepresentation or any intent on the part of Respondent to rely upon a material misrepresentation. All that is required is proof that a material representation was made and that the representation was false. Petitioners have challenged the validity of the Challenged Existing Rule as being an invalid exercise of delegated legislative authority as defined in Section 120.52(8)(b) and (c), Florida Statutes. Petitioners were also found in the Recommended Orders to have violated Section 455.227(1)(h), Florida Statutes, based upon an interpretation of that statutory provision advanced by the Department during the prosecution of the Administrative Complaints. Section 455.227(1)(h), Florida Statutes, provides that the following act constitutes grounds for which disciplinary action may be taken: (h) Attempting to obtain, obtaining, or renewing a license to practice a profession by bribery, by fraudulent misrepresentation, or through an error of the department or the board. (Emphasis added). The Department’s argument concerning the appropriate interpretation and application of Section 455.227(1)(h), Florida Statutes, advanced in the prosecution of the Administrative Complaints, was advanced in paragraphs 24 through 26 of the Department’s Proposed Recommended Order: Obtaining a certificate or registration in error as a result of a misrepresentation made during the application process is conduct proscribed by Section 455.227(1)(h), Florida Statutes. Respondent was issued a registration by error of the Department. To be issued a registration by the Department, an applicant must submit along with an application for registration, a copy of the applicant’s validly issued competency card from a local government licensing board . . . . Respondent submitted a fake competency card that appeared to be validly issued by the Miami Compliance Office. . . . If the Department had known Respondent’s Competency Card was fake and Respondents’ answer to the attest statement was false, the Department would not have issued Respondent a registration. Thus, since the Department did not have truthful and accurate information, the registration issued to Respondent was in error. The Department’s interpretation was described and accepted in the Recommended Orders (in paragraphs numbered “29” through “31” or “31” through 33”, in the Recommended Orders), as follows: In support of this alleged violation, the Department has argued that Respondent obtained his license “through an error of the department . . . .” That “error” was the Department’s reliance upon an improperly issued Miami-Dade building business Certificate of Competency. The evidence proved clearly and convincingly that the Department issued the Respondent’s license in “error.” While it is true that Respondent did not intentionally cause or even know of the error, the Department reasonably takes the position that Respondent obtained his license nonetheless as a result of this error and that is all that Section 455.227(1)(h), Florida Statutes. The Department has proved clearly and convincingly that Respondent violated Section 455.227(1)(h), Florida Statutes [requires]. Although not specifically quoted in their Petition in this case, Petitioners have quoted what they believe is the unpromulgated rule of the Board which they are challenging in this case in paragraph 60 of Petitioner’s Proposed Final Order (hereinafter referred to as the “Challenged Language”): . . . . Essentially, the Board applies the following unadopted rule when applying Section 455.227(1)(h): Disciplinary action may be taken pursuant to Section 455.227(1)(h), Florida Statutes, where an individual attempts to obtain a license through an error of the department even if the individual did not have knowledge of the error. As of the date of the final hearing of this matter, the Board had taken no action on the Recommended Orders.
The Issue Whether the Division of Administrative Hearings has jurisdiction to enter an award of costs and attorney's fees pursuant to Subsection 468.619(7), Florida Statutes, as set forth in the Petitioner's motion to award same.
Findings Of Fact The Petitioner was the subject of an administrative action wherein the Department sought to discipline the Petitioner for alleged violations of Chapter 468, Florida Statutes. The Administrative Complaint in the underlying administrative action was filed on November 2, 1998. Procedurally, the probable cause panel would have met to approve the proposed complaint prior to that date. Since the claim was disputed by the Petitioner, the disciplinary case was forwarded to DOAH for formal proceedings on December 23, 1998. That disciplinary proceeding, DOAH Case No. 98-5629, was concluded with the entry of a Final Order that adopted the Recommended Order and dismissed the Administrative Complaint. Thus no disciplinary penalty was imposed against the Petitioner. The Petitioner's Motion to Award Costs and Attorney's Fees predicated the claim on Section 468.619(7), Florida Statutes. The claim represented that the underlying administrative action "resulted in a judgment for the enforcement official." The sole basis for the Petitioner's claim in this case is Section 468.619(7), Florida Statutes. Such statute took effect on July 1, 2000. The formal hearing in the underlying administrative case was conducted on August 8, 2000. The Recommended Order was entered on October 23, 2000. The Final Order was entered by the Building Code Administrators and Inspectors Board on December 27, 2000. The Petitioner maintains that this case must be distinguished from its companion case, DOAH Case No. 99-4892, because in this instance the underlying administrative case was placed in abeyance to allow a Stipulated Settlement Agreement to be presented to the Building Code Administrators and Inspectors Board (Board). Only when the Board rejected the agreement did the matter eventually proceed to an evidentiary hearing. Presumably, had the matter been amicably resolved, the Petitioner would not have incurred the costs and fees now claimed.
Findings Of Fact The RFP Respondent issued a request for proposals in October, 1988, entitled "Turnpike Bridge Replacement Design/Build Project, State Road 91 (Florida's Turnpike)" (the "RFP"). The RFP solicited technical and price proposals for state Project Nos. 97890-3325 and 97930-3324. The State Projects involved the design and construction of temporary detours and permanent replacement bridges over canal crossings at several locations on Florida's Turnpike. The RFP required bridges to be constructed as permanent structures at each of the project sites. Respondent advised interested parties at the scope of services meeting on October 18, 1988, that detour bridges would also be required at all of the project sites. Local permitting was a key factor in the scope of services required for the projects contemplated in the RFP. Respondent advised interested parties, including Petitioner and Intervenor, at the scope of services meeting that Respondent had done no coordinating with local agencies and that local permitting was the responsibility of each party responding to the RFP ("offeror"). The local agency with responsibility for issuing permits for a majority of the canal crossings in the RFP was the Lake Worth Drainage District ("Lake Worth"). Both Petitioner and Intervenor inquired of Lake Worth while preparing their respective technical proposals to confirm Respondent's representation that bridges would be required for both detours and permanent structures at all project sites. Lake Worth advised Petitioner that vertical clearances and hydraulics required bridges for both detours and permanent structures at all canal crossings subject to Lake Worth's jurisdiction. However, Lake Worth advised Intervenor, on or about October 26, 1988, that culverts would be acceptable for detours at three of the project sites. Kenneth Bryant was the President of DSA Group, Inc. ("DSA"). DSA is a consulting engineering firm that was retained by Intervenor to assist in the preparation of its technical and price proposals. Mr. Bryant asked Lake Worth why culverts would not be acceptable for permanent structures if culverts were acceptable for detours. Lake Worth responded that consultants for Lake Worth would look into the hydraulics of the entire system. Petitioner and Intervenor submitted their respective technical proposals on or about January 11, 1989. 2/ Intervenor used culverts in its technical proposal at those canal crossings where Lake Worth had approved the use of culverts for detours. Intervenor also included documentation of the approvals by Lake Worth. Petitioner included bridges in its technical proposal for all detours and permanent structures. The date for submitting price proposals was changed by Respondent several times. The original date was scheduled for 30 days after receipt of the technical proposals. After several delays, price proposals were timely submitted by Petitioner and Intervenor on June 21, 1989. The opening of price proposals was set for July 6, 1989, pursuant to a letter dated June 23, 1989, from Bill Deyo, Design/Build Coordinator for Respondent. The letter stated in relevant part: ... If approved by the Final Selection Committee the selected team will be posted on July 10, 1989, with the final awarding scheduled for July 14, 1989. Award and execution of this contract is contingent upon approval of budget by the Governor's office. Respondent selected Petitioner's proposal as number one and Intervenor's proposal as number two. The Final Selection Committee issued a "memo" on July 6, 1989, authorizing award of the contract. 3/ Award and execution of the contract was approved by the Governor's office. 4/ Rejection of All Proposals On July 10, 1989, Respondent sent a telegram to each offeror cancelling the posting of "bid" tabulations for that day. On August 31, 1989, the Final Selection Committee issued a memorandum rescinding its authorization to award the contract for the RFP, and requested its Contracts Administration Office to notify all "...Design/Build teams of the decision to REJECT all price proposals." On September 12, 1989, Respondent notified all offerors by certified mail of Respondent's decision to reject all "bids". No reason for Respondent's rejection of all price proposals was stated in the certified letter. At that time, offerors were not otherwise advised by Respondent of the reason for the rejection. Respondent rejected all price proposals based upon a substantial reduction in the scope of services required for the RFP. Between October, 1988, and August 31, 1989, Lake Worth determined that culverts would be acceptable instead of bridges at five of the six project sites within the jurisdiction of Lake Worth. Lake Worth's change in position substantially reduced the scope of services required in the RFP. The value of that reduction in the scope of services was approximately $3.6 million. 5/ Respondent knew or should have known from the technical proposal submitted by Intervenor on January 11, 1989, that the scope of services required in the original; RFP had been reduced to the extent Lake Worth had approved the use of culverts instead of bridges for the detours at some of the project sites. Respondent did not investigate the potential reduction in the scope of services until after the opening of price proposals on July 6, 1989. The parties stipulated at the formal hearing that Respondent's rejection of all price proposals was not at issue. Therefore, the question of whether Respondent's rejection of all proposals was arbitrary, capricious, or beyond the scope of Respondent's discretion as a state agency is not at issue in this proceeding. 6/ Respondent's Existing Rule The legislature required Respondent to adopt by rule procedures for administering combined design/build contracts. Section 337.11(5)(b), Florida Statutes. Accordingly, Respondent adopted Florida Administrative Code Rule 14- 91.006 on March 13, 1988 ("Rule 14-91.006"). 17. Rule 14-91.006(5) provided: The Deputy Assistant Secretary for Technical Policy and Engineering Services, jointly with the Deputy Assistant Secretary representing the District in which the project is located, may determine it is in the best interest of the state to provide funds to firms selected for preparation of technical and price proposals in response to the Design Criteria Package. Each firm selected shall receive identical fixed fees for this work. Specific Authority 334.044(2) 337.11(5)(b) F.S. Law implemented 337.11(5) F.S. History-New 3-13-88. (emphasis added) Rule 14-91.006(5) was adopted to facilitate competitive responses to a request for proposals by paying fixed fees to firms selected by Respondent to prepare technical and price proposals. Rule 14-91.006(5) was also adopted so that Respondent could compensate offerors, retain their technical proposals, and use the design concepts on similar projects. Rule 14-91.006 was amended on June 13, 1990, in relevant part, by repealing Rule 14-91.006(5). The repeal of Rule 14-91.006(5) occurred approximately 33 days after the date of the formal hearing but before the entry of a final order in this proceeding. 7/ Request for Payment After Respondent notified offerors of the rejection of all price proposals, Petitioner and Intervenor requested Respondent to make a determination of whether it was in the best interest of the state to provide funds to Petitioner and Intervenor for the preparation of their respective technical and price proposals in accordance with Rule 14-91.006(5). Petitioner and Intervenor requested on several occasions that the Deputy Assistant Secretary for Technical Policy and Engineering Services jointly with the Deputy Assistant Secretary for the Turnpike convene a meeting to make the determination authorized in Rule 14-91.006(5) Informal conferences with Respondent's representatives were requested on at least four occasions to discuss the issue of Petitioner's compensation for its technical and price proposals. Respondent's representatives met with Petitioner a few days before the formal hearing on May 10, 1990. Respondent stated that it had no statutory authority to compensate Petitioner for Petitioner's technical and price proposals in the absence of a contract. Respondent neither contracted with Petitioner and Intervenor to pay for their technical and price proposals nor offered to enter into such a contract. Petitioner offered to enter into such a contract and also offered to provide computer tapes containing plans and specifications required in the RFP if Respondent would agree to compensate Petitioner. Repeal of Respondent's Existing Rule Sometime between March 13, 1988, and October, 1988, Respondent considered the payment of funds pursuant to Rule 14-91.006(5) in a design/build project that preceded the RFP. 8/ Respondent requested funds from the comptroller but was advised by the comptroller that no funds could be provided pursuant to Rule 14-91.006(5) in the absence of a contract. Respondent's general counsel confirmed that there was no statutory authority to provide funds pursuant to Rule 14-91.006(5) in the absence of a contract. Respondent took no public action to repeal Rule 14- 91.006(5) until March 16, 1990, approximately two years after the earliest date Respondent could have received the directives from its comptroller and general counsel advising Respondent that Rule 14-91.006(5) exceeded its statutory authority. Instead of formally repealing Rule 14-91.006(5), Respondent followed the comptroller's recommendation to obtain legislative authority to pay funds pursuant to Rule 14- 91.006(5). Respondent unsuccessfully proposed such legislation to the House Transportation Committee during the 1989 legislative session. In November, 1989, Respondent drafted an amendment to Rule 14-91.006 which, in relevant part, repealed Rule 14-91.006(5). Notice of the proposed formal repeal of Rule 14- 91.006(5) was published in the Florida Administrative Weekly on March 16, 1990. The amendment to Rule 14-91.006 was adopted and Rule 14-91.006(5) was formally repealed through appropriate rulemaking procedures on June 13, 1990. During 12 design/build projects, Respondent never paid funds to any firm for technical and price proposals when the firm had not been awarded a contract pursuant to a request for proposals. Respondent never adopted standards for determining the proper timing for payment of funds pursuant to Rule 14-91.006(5). Respondent never adopted standards for determining when it would be in the best interest of the state to provide funds pursuant to Rule 14- 91.006(5). Respondent refused to apply Rule 14-91.006(5) and refused to determine if it would be in the best interest of the state to provide funds to Petitioner and Intervenor for their respective technical and price proposals. The sole reason given by Respondent for its refusal to apply Rule 14-91.006(5) was the lack of statutory authority to provide funds to firms selected for preparation of technical and price proposals in the absence of a contract. Respondent's representatives never considered applying Rule 14- 91.006(5). When Respondent's representatives met with Petitioner shortly before May 10, 1990, they stated that they would like to provide the requested funds and that such funds should be provided, but that no statutory authority existed for providing such funds in the absence of a contract. The signatories to the memorandum from the Final Selection Committee, dated August 31, 1989, never met until after the meeting that took place shortly before May 10, 1990, to discuss payment for the technical and price proposals submitted by Petitioner and Intervenor. When they did meet, it was determined that no statutory authority existed to provide funds pursuant to Rule 14-91.006(5) in the absence of a contract. Respondent never intended to compensate either Petitioner or Respondent for their respective technical and price proposals in the absence of a contract. Respondent never conducted any review of the technical and price proposals prepared and submitted by Petitioner and Intervenor for the purposes described in Rule 14-91.006(5). Two significant factors to be considered in making such a determination, however, would have been the benefit derived by Respondent from the technical and price proposals submitted and the effect that the provision of such funds would have on competition. Best Interest of the State Payment of funds to Petitioner and Intervenor would have been in the best interest of the state within, the meaning of Rule 14-91.006(5). 9/ Respondent derived substantial benefit from the technical and price proposals submitted by Petitioner and Intervenor including a reduction in the cost of State Project Nos. 97890-3325 and 97930-3324 in the approximate amount of $3.6 million. The fair market value of the proposals submitted by Petitioner and Intervenor was between $500,000.00 and $700,000.00 for each of the two proposals. All of the plan sheets and drawings were completed. The plans were prepared in accordance with Respondent's criteria for plan preparation. Every detail was followed and a complete maintenance of traffic plan was included. Where bridges were designed, the bridge calculations were included. Very little work was left to be done. In order to price out a project of the magnitude and scope required in the RFP, the technical proposals had to be very close to final design. Petitioner's technical proposal for both projects contemplated in the RFP was recorded on magnetic media in Petitioner's computer automated drawing machine. The magnetic media files could be easily transferred to Respondent. Petitioner at all times was ready, willing, and able to make such a transfer if Respondent had agreed to provide funds to Petitioner pursuant to Rule 14- 91.006(5). A great deal of valuable information was contained in the technical proposals prepared and submitted by Petitioner and Intervenor. Eighty to 90 percent of the engineering decisions were made and depicted either on the preliminary drawings or within the calculations included in the technical proposals. Information gathering and coordination with local permitting agencies, including Lake Worth, was a major component of designing and building the projects described in the RFP. Those kinds of activities required a good deal of time from higher level personnel in each organization. Respondent derived benefit from the technical proposals prepared by Petitioner and Intervenor irrespective of whether bridges or culverts are ultimately used at the canal crossings in the RFP. The only change that would be required would be to erase the bridges and insert details for a culvert crossing. Respondent derived benefit from the technical proposals prepared by Petitioner and Intervenor with respect to the projects contemplated in the RFP and similar projects in the future. Respondent can "relet" the project in the future and intends to do so. 10/ Respondent has retained the technical and price proposals submitted by Petitioner and Intervenor pending the outcome of this proceeding. Respondent's unwritten policy is to either return technical and price proposals to their offerors or destroy such proposals upon the concurrence of the, appropriate offeror. After this proceeding is concluded, Respondent intends to either return or dispose of the technical and price proposals submitted by Petitioner and Intervenor in a manner consistent with its unwritten policy. Reliance On Respondent's Existing Rule Petitioner and Intervenor were aware of Rule 14-91.006(5) in preparing and submitting their respective technical and price proposals. Neither Petitioner nor Intervenor, however, presented evidence of the extent to which they may have relied on Rule 14-91.006(5). Petitioner and Intervenor did not demonstrate that they were induced by Rule 14-91.006(5) to respond to the RFP or that Rule 14-91.006(5) was even a material or significant consideration to them. Payment of funds pursuant to Rule 14-91.006 (5) was neither addressed in the RFP nor discussed by the parties prior to Respondent's rejection of all price proposals. The record leaves open to speculation whether Petitioner and Intervenor would not have responded to the RFP in the absence of Rule 14- 91.006(5).
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner's written formal protest should be DENIED; Respondent should return the respective technical and price proposals to Petitioner and Intervenor; Respondent should not provide funds to either Petitioner or Intervenor pursuant to former Rule 14-91.006(5). DONE AND ORDERED in Tallahassee, Leon County, Florida, this 10th day of January, 1991. DANIEL MANRY 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 10th day of January, 1991.
The Issue Whether the Motions for Rule Challenge Proceedings (referred to as Petition(s)) filed in each of the above-cited cases meet the requirements both in form and substance, pursuant to Subsection 120.56(4)(a), Florida Statutes (2004).
The Issue The issues to be resolved in this proceeding concern whether proposed rules 59O-2, 59O-3, 59O-5, 59O-7, 59O-9 and 59O-10, Florida Administrative Code, which revise and replace existing provisions of the same rules, are invalid exercises of delegated legislative authority to the above-named agency, in light of the standards set forth in Section 120.52(8), Florida Statutes.
Findings Of Fact This case arose when the Respondent, BOARD OF CLINICAL LABORATORY PERSONNEL (BOARD), published notice of its intent to adopt certain amendments to the rules described above. Publication was on August 23, 1996. The general effect of the proposed rules is to change definitions related to the practice of clinical laboratory technology and technicianry; to change certain provisions dealing with the qualifications; testing, and licensure of technicians and to provide certain national examinations for licensure for directors of clinical laboratories. The Board was created by the legislature in 1992, to regulate clinical laboratory personnel. These authorities and duties are set forth in Part IV of Chapter 483, Florida Statutes. The Board’s purpose is to protect the safety and welfare of the public from the hazards of improper performance by clinical laboratory personnel. To this end the Board is required by law to prescribe minimal qualifications for clinical laboratory personnel. Clinical laboratory personnel are persons who perform clinical laboratory examinations on specimens taken from the human body for the purpose of diagnoses, management or treatment of a medical condition. The field of clinical laboratory science is divided into two (2) areas: anatomical, which includes the disciplines of histology (tissues), cytology (cells); and clinical. The largest group of licensees fall under the clinical area and are licensed under five (5) specialties: Microbiology, Serolgy/Immunology, Chemistry, Hematology, and Immunohematology. The five (5) disciplines are collectively known as general laboratory practice. Florida licenses four (4) categories of clinical laboratory personnel: Director, Supervisor, Technologist, and Technician. Clinical laboratories are subject to Federal and State Regulation. Part I of Chapter 483, Florida Statutes, is the “Florida Clinical Laboratory Law”. It provides for the qualification and licensing of clinical laboratories. Regulations adopted pursuant to the Federal Clinical Laboratory Improvement Amendments of 1988 (CLIA), established the standards that all laboratories must meet to be certified to perform testing on human specimens. The regulations under CLIA provide for the certification and registration of laboratories, but not of the personnel employed therein. Persons working in clinical laboratories are subject to the requirements and regulations imposed under Part IV of Chapter 483, Florida Statutes. In addition, the qualifications of personnel working in clinical laboratories are also regulated indirectly through federal law. Although testing personnel are not licensed pursuant to CLIA, one of the standards which must be met by laboratories licensed under CLIA is the employment of testing personnel qualified pursuant to specifically enumerated training and educational requirements. In addition to setting laboratory standards by discipline, CLIA also sets standards by three (3) types of testing complexity: Waived, Moderate and High Complexity. Waived Tests are those for which there are no personnel standards or laboratory regulations, other than the requirement of a “Certificate of Waiver.” High Complexity Tests, as indicated by their name, are more difficult to perform and require more intervention on the part of the analysts. The FLORIDA COALITION OF PROFESSIONAL LABORATORY ORGANIZATIONS, INC., is a not-for-profit corporation which has twelve (12) member organizations, eleven (11) of which are joined in this proceeding. The coalition and its member organizations are independent organizations which represent the licensed laboratory personnel who are licensed by the Board. The coalition was created in 1992, about the same time that the Board was created by the Florida Legislature. The coalition was organized for three (3) main reasons: to educate the members of the profession, monitor legislative activity that would affect the members and their ability to practice their profession, and to unify the “laboratory voice” within the state. The coalition has regularly monitored all activities of the Board and has intervened in support of Board rules under challenge in the past. The coalition, its individual organizations, and the licensed laboratory personnel who are members of these organizations are affected by the proposed rules because the changes to the rules in the training, licensure qualifications, licensure examination, licensure by specialty and scope of practice of medical technicians will affect not only the currently licensed medical technicians, but also the medical technologists and the laboratory supervisors and directors who work with and supervise the medical technicians. It has been shown that these proposed changes will allow medical technicians to be licensed under different and lower standards than is required in the current rules and will allow a broadening of the scope of practice of the licensed medical technicians, thus directly and adversely affecting the practice of the profession and the currently licensed professionals. The other proposed and challenged changes to the rules similarly affect the members of the coalition and Petitioner organizations. The Petitioners have demonstrated that the coalition and its member organizations represent the interests of its individual members, the licensed laboratory personnel and that a substantial number of its members will be affected by the proposed rules. The rules are thus within the scope of interests for which the Petitioner coalition and its member organizations were organized. The Board was newly created in late 1992 and inherited a set of rules for licensure and discipline of laboratory personnel from the Department of Health and Rehabilitative Services. The Board undertook a systematic review of these rules in order to make them current with the changed and modern practice of clinical laboratory science. The Board also considered the changes to federal law and regulations regarding the practice of clinical laboratory science, especially the law and regulations known as CLIA. All laboratories in the country must comply with conditions imposed under CLIA and the CLIA amendment provides detailed and specific conditions under which all laboratories must operate in order to perform laboratory testing. CLIA does not require laboratory personnel to be licensed but state regulations require licensure, as in Florida, and CLIA requires that individuals performing moderate and highly complex tests “possess a current license issued by the state in which the laboratory is located.” (See 42 CFR, Sections 493, Subpart M). Although the Agency for Health Care Administration, which licenses and inspects laboratories, is statutorily mandated to assure that the laboratories meet the CLIA requirements (See Sections 483.821, 483.035, 483.051(a), 483.172(4), Florida Statutes), the Board of Clinical Laboratory Personnel is not similarly mandated by the legislature. The CLIA provisions are not to be exceeded by the Board when it adopts rules for the licensure, education and training of personnel in “exclusive use” laboratories. These personnel and laboratories are not at issue in the present case. The Board’s representative testified that compliance with the CLIA regulations was an overall goal for the state of Florida because if the state regulation of laboratories meets or exceeds the CLIA requirements, then the state can obtain an exemption from the federal requirements, thus eliminating a dual set of regulations. It is clear, however, that the legislature has not mandated that the Respondent Board incorporate the CLIA regulations into the Board’s rules. The proposed rules at issue substantially modify the existing laboratory personnel rules, the essential change being the elimination of licensure of medical technicians by specialty, with the end result of the proposed changes being the licensure of laboratory technicians as “generalists”. The following proposed rules effect these changes: Rule 59O-5.004, Qualifications for licensure as a technician, is substantially rewritten so that an individual must successfully complete a Board-approved technician level training program of one year of integrated study in order to become licensed as a general laboratory technician.(Proposed rule 59O-3.001(l)) The current rule, 59O-5004(2)(b), allows an individual to complete a training program which consists of 400 clock hours per specialty, and a course in general laboratory practice. The specialties are: microbiology, serology/Immunology, clinical chemistry, hematology, blood banking, immunohematology, cytology, and histology. Proposed Rule 59O-5004(3)(a), creates a general licensure category for technicians encompassing the five specialties. The proposed rules further would effect a change from a specialty licensure of technicians to a general technician licensure by changing the examination requirements of Rule 59O- 7.001(12), so that a generalist examination covering microbiology, serology/immunology, clinical chemistry, hematology, and immunohematology is given, rather than the current two-part examination: Part A, consisting of one technician level specialty examination in each of the five above-cited areas, and Part B, consisting of an exam in general laboratory practice. (Current rule 59O-77.001(4), F.A.C.). The proposed rule changes also create a route for qualification to sit for the generalist technician exam by allowing various periods of practical experience, depending on an individual’s education level, rather than requiring any formal training in laboratory procedures. (Proposed rule 59O-5.0904(d)) The Proposed rules add a definition of “general clinical laboratory experience” in proposed rule 59O-2.003(18), which has no counterpart provision in the current rules. The proposed changes to the current rules also have the net effect of changing and broadening the scope of practice of medical technicians by changing the definition of “direct supervision,” removing the current language of “reviews results prior to being made available for patient care,” and adding the language “is responsible for the oversight of testing and reporting of results” (Proposed rule 59O-2.002(8)), and making changes in rule 59O-2.002(4) (the definition of technician). These changes, together with proposed changes to rule 59O- 10.005(2)(a), allow technicians to practice in their category of licensure under the proposed new definition of “direct supervision”. These changes remove the requirement that the work of technicians be reviewed by a technologist, supervisor, or director before or after the results are released to the public. The Board has testified that the proposed revisions in the technician rules (qualifications [59O-5], training [59O-3] and scope of practice [59O-10]) were made in order to align the Board’s rules with federal regulations (CLIA 88), yet federal regulations mandate review of results and specifically require that certain results be reviewed by supervisory personnel within twenty-four (24) hours. The existing rules provide for similar requirements, consistent with these federal standards, whereas the proposed rules eliminate these requirements, in contradiction to the stated reason for proposing the changes in the rules (i.e., to meet federal standards). Proposed changes to rule 59O-5.004(3)(6), set up qualifications for two (2) types of technicians, “general” and those who perform “highly complex” tests. The current rule provides for the licensure of one type of technician only. Proposed rule 59O-3.001(1) provides a requirement for a technician training program of one (1) year of integrated study, including the five (5) specialty areas making up the “generalist” category of technician. The current rule requires 400 clock hours in each of the five (5) specialty areas that make up the generalist technician program. An individual can no longer take training in only one (1) or more (up to five (5)) of the individual specialty areas. (Rule 59O-3.003(3), Florida Administrative Code). Proposed rule changes to 59O-3.002(2) are also made to allow non-licensed personnel to teach clinical laboratory science, whereas the current rule requires a person to be licensed as supervisor or technologist and provides that the instructor may teach only in a specialty area in which he or she is currently licensed. (Rule 59O-3.002(2), Florida Administrative Code). Proposed changes to rule 59O-3.003 allow the Board to generally adopt without review, and by reference, curriculum standards of the Department of Education for clinical laboratory training programs for laboratory technicians. The current rule requires the Board to actually review and approve the Department of Education standards in relationship to the requirements in the current Board rule. (Rule 59O-3.003(2), Florida Administrative Code). Challenge is also made to proposed changes to rule 59O- 3.003(4)(e)i., which removes the current requirement that a licensed technologist must have received the training required of a technician. (Rule 59O-3.003(3)). Proposed rule changes regarding the examinations for laboratory directors would require candidates for the director license, to take and pass nationally certified examinations (Proposed rule 59O-7.001(1)), rather than the Board and agency-created examinations, as allowed in current rule 59O- 7.001(1), Florida Administrative Code. The proposed rules were published in the August 23, 1996, Florida Administrative Weekly. The Board offered no testimony or evidence that any change in circumstances had occurred with respect to the examination and licensure of medical technicians in effect nor reasons why there should be a general examination and licensure, rather than specialty examination and licensure. Neither did the agency offer any change in circumstances that had occurred with respect to the other challenged proposed changes in the current rules. The overriding argument of the Board was that the new Board had considered the recently promulgated rules and had decided to make changes based on a change in the philosophy of the new Board. No articulation was made of this change in philosophy or the basis for it. The Board offered, at hearing, several reasons for the proposed changes to the examination and licensure of medical technicians. First the Board argued that the changes were philosophical, that new Board members had been appointed to the Board, and that this Board could not be bound by a prior Board. The Board also offered that the long-standing practice had been to examine and license technicians as generalists, and that the fairly recent changes had been “controversial.” Further, this recent change had been challenged by the Agency for Health Care Administration (AHCA) because of the increased costs to applicants of taking each of the specialty exams and concern over the implementation date of the new exams. It was shown that in October 1995, as a result of a challenge, the Board had agreed to re-visit this issue in the future. However, it was also shown that the agency had withdrawn its challenge and that the current rule had been promulgated and published in the Florida Administrative Weekly in December 1995. The challengers presented several reasons why the proposed technician exams and licensure changes, as well as the other proposed changes are invalid. First, the process under which these rules were proposed and adopted did not comply with the applicable rule-making procedures of the Administrative Procedures Act, especially in contrast to the past procedures which had been used by the previous Board. The previous Board had established a pattern of rule-making procedures which gave notice to the public, accepted public input and provided open, full debate and consideration before rules were adopted. Second, the current rules, including those regarding licensure and examination of medical technicians, had only recently been adopted after full consideration of the industry practices and needs and the pros and cons of general versus specialty exams and licensure and after a systematic review of the state of the profession. The challengers presented evidence that the prior Board, in establishing the specialty exam for technicians, had evidence before it from examination specialists that the former 100-question, generalist technician exam was a poor test of the candidates’ knowledge of the practice. A candidate could fail three (3) of the five (5) specialty areas which were tested on the general exam and still pass the exam and become licensed as a technician and could therefore practice in all five (5) areas. Further, the chair of the prior Board testified to the detailed information the various considerations and debate that the prior Board had undertaken in order to reach the decision to change to a specialty exam and licensure by specialty for technicians. The evidence shows that these rule changes began when the Board met in March 1996. At that time a long-term member of the Board became the new chair of the Board and two (2) new Board members were present at their first full Board meeting at that time. The Board received a report from the recently created and appointed credentials committee. That committee recommended that the examination for medical technicians be changed from the two- part specialty exam, (one portion testing general laboratory principles and the other testing individuals in up to six (6) specialties) to a general exam covering all of the specialty areas. The evidence shows that with very little discussion and no other information before them, the Board voted to change the exam rule and instructed their attorney to prepare the necessary rule language for them. For the next full meeting of the Board in June 1996, the Board received, reviewed and voted on a wholesale package of proposed rule changes covering many rules, including the changes to the examination and licensure qualifications and scope of practice for technicians here under challenge. The Board did not complete consideration of these rule changes and continued their discussions and voting at a July conference-call meeting. The Petitioners maintain that the vote taken to change the technician exam rule at the March 1996 Board meeting was not properly noticed, because the agenda that was published for the Board meeting did not contain any notice that a rule change was being proposed and no indication that action, a vote, would be taken to change a rule. Promulgation of such a notice was the standard operating procedure for agendas of the previous Board meetings. The Board representatives who testified alleged that the agenda for the March meeting was submitted in a timely fashion to comply with Board rule 59O-1.008(4), Florida Administrative Code, as well as Section 120.53(1)(b), Florida Statutes. The coalition’s witness testifying about this matter, however, never received the amended agenda; and she had been on the mailing list to receive such agendas, based upon previous activity with regard to the Board’s official business, including rule-making. The amended agenda added language to the effect that the credentials committee was scheduled to make a recommendation for the technician exam rule change (See item No.6, agenda of March 1996 Board Meeting, Respondent’s composite Exhibit No.1). The coalition chair testified that she had received and read the original agenda, but did not receive any notice that the rule change recommendation was to be made, or that a vote would be taken to change the rule. Previous to this time notice of possible rule changes had been provided to the public via the Board’s agendas. The coalition had regularly monitored proposed rule changes by obtaining and reviewing the agendas and, after considering the proposed changes, gave input to the Board about the proposed rule changes. Section 120.53(1)(d), Florida Statutes, requires that agency rules concerning scheduling of meetings and workshops shall provide: An agenda shall be prepared by the agency in time to insure that a copy of the agenda be received at least seven (7) days before the event by any person in the state who requests a copy and pays a reasonable cost of the copy. The agenda shall contain items to be considered in the order of presentation. After the agenda has been made available, change shall be only for good cause, as determined by the person designated to preside, and state it in the record. Notification of such change shall be at the earliest practicable time. One of the organizational rules of the Board-Rule 59O-1.008(4), Florida Administrative Code, contains essentially the same language as Section 120.53(1). It appears that the immediate agenda was not made available to the public seven (7) days prior to the March 1996 Board meeting. Further, no announcement of good cause for the change to the agenda was made by the chair of the Board “at the earliest practicable time,” or at any other time. The order of items on the March agenda was also re- arranged without prior notice to the public, so that when a vote was taken to accept the recommendation of the credentials committee and to change the specialty exam for technicians to a general exam, one of the Board members was out of the room. Members of the public were not present and might have wanted to be there. The re-arrangement of the agenda placed the vote on the credentials committee recommendation to change the technician exam in between votes on discipline hearings and denial proceedings. Section 120.53(1)(d), Florida Statutes, requires that the agenda list items “in order of presentation.” Moreover, it had been announced that a public workshop on rules was to be held the second day of the scheduled meeting as part of the Board’s March meeting. The agenda indicates a rules workshop and lists each of the current rule chapters of the Board. There were no specific, proposed rule changes noticed or proposed new rule language available for the public to review. The purpose of the workshop was to obtain public comments on any of the current rules. Questions were raised by the public at the public workshop meeting, concerning the vote taken the previous day to change the technician exam, especially since the specialty exam was to be given for the first time in October 1996. The rule providing for it had only become effective in December 1995. Some persons spoke in favor of the change of the examination to a general one, while others spoke against that change. In June of 1996, the proposed re-write of the rules concerning technician exams, training and experience requirements for licensure, changes to the scope of practice for technicians, and changes to the director exam, among other changes, was proposed and voted on by the Board. The proposed rules were written by the new chair of the Board. The Board did not finish considering the changes at the June meeting and it was announced what the Board would continue its review and vote on the proposed changes at the July conference-call meeting. No new agenda was published for that July conference- call meeting and the Petitioners maintain that votes taken at that meeting, and at the March 1996 meeting, render the rules invalid for the failure of the Respondent Board to materially comply with applicable rule-making procedures provided for in Chapter 120. The Petitioners contend that the rule-making procedures followed by the Board through the March to August rule-making effort were flawed because no public input was sought or allowed during the rule-making process. No public workshops or notice of rule development were announced, scheduled or held until the rules were published in the August 23, 1996, Florida Administrative Weekly. No public comment was accepted at the three (3) Board meetings where the rules were re-written and voted on. Drafts of the proposed rule changes were not available to the public at the June or July meeting, either prior to or during the meeting. The new chair of the Board and the Board Administrator appear to have instigated this major revision. It represents a change from the philosophy and prescription contained in the current rules, even though there was objection to the proposed changes and despite serious doubts about the necessity; the lack of proper debate and deliberation; and the speed of adoption, which were expressed by a number of Board members and by the Board attorney. The motives for such a radical change in so short a time after the prior rules became effective in December 1995, after a number of years of rule-making effort, deliberation and consideration thereon are not clear. The chair did express concern about upcoming changes to the Administrative Procedure Act, to be effective October 1, 1996, and her resultant desire to have the rule changes accomplished before the new Administrative Procedure Act went into effect. The credentials committee of the Board was newly created in January 1996, approximately a month after the previously-enacted rules took effect in December 1995. It was created for the purpose of reviewing credentials of candidates for licensure. It was made up of two (2) new members of the Board, and one member who had been on the Board for only approximately six (6) months. It held one meeting to review credentials and then immediately thereafter proposed a change to the technician’s exam: from the specialty exam, only enacted in December 1995, to the “generalist” exam. Once the decision was made to return to the general exam for technicians, then related rule changes were made to the training criteria for technicians, required of candidates to be able to sit for the exam. No cogent reasons were offered by the Respondent as to why the training program requirements for medical technicians were changed in the proposed rules, except to assert that a requirement in the current rule (enacted in December 1995) providing for a four-hundred (400) clock hour training program was eliminated because there were only two (2) locations where the courses were offered. The Board apparently decided that once the decision was made to return to a general exam for technicians, then there was no need to allow an individual to take four-hundred (400) clock hours of training in each specialty of the general category. The Petitioners maintain that the reason the four- hundred (400) clock hour training requirement in each specialty and in general laboratory practices was developed was that they provide specific, quantifiable training requirements, so that all potential candidates are certain of the requirements for licensure. The proposed rule, however, provides only a vague standard for one to employ in determining how much training is provided in each specialty area in the “one year of integrated study” the new rule would require. Thus there are no uniform standards and the Board will have to proceed on a case-by-case basis (making incipient policy) in determining whether a particular candidate has been properly trained. The proposed rule is vague in comparison to the current rule. The proposed rule could tend to lower the standards for training of technicians and would not, therefore, meet the legislative mandate concerning protection of public health. Various changes to the current rules will change the scope of practice for technicians in that they may perform laboratory tests and immediately release their tests results to the public without review by licensed technologists, supervisors or directors. The Board offered no clear reasons why these proposed changes were made. Instead, it traced the history of the review of the work of technicians and contended that the proposed rules would simply clarify conflicts in the current rule. It also considered that the previous Board had heard conflicting views about the proper review of technician test results. The Board offered no new or different studies or considerations that it had learned of since the adoption of the current rules in December 1995. The Petitioners traced the history of the difference between the scope of practice of technologists and technicians to support the maintenance of the distinction between the two in the current rules. Technologists, by training and tradition, are professionals who exercise independent judgment while performing the three (3) phases of the laboratory test — the pre-analytical, the analytical, and post-analytical phases. A technician is trained only to perform manual analytical tasks and thus does not possess the skills and training to properly assess and relate the wider body of knowledge to the current tests in order to determine if the test result is correct, needs to be re-run, whether the tests controls were proper or any of a number of other possible errors. The end result of the changes in the scope of practice rules for technicians will create a blending of the two (2) levels of licensure which will create confusion as to the extent and scope of permissible practice of technologists and technicians. The Board has proposed a new means whereby one can become licensed as a medical technician by experience. The Petitioners claim that allowing this means the Board is not requiring minimal standards for licensure to ensure safe practice of laboratory science, for a number of reasons. An individual is not required to have any formal training in laboratory science and the amount of experience required to sit for the exam is vague. If an individual has a high school diploma, five (5) years of “pertinent general laboratory experience” accrued within the last ten (10) years is necessary. If a candidate has an associates degree then four (4) years, or, if a bachelors degree, then three (3) years of pertinent general laboratory experience is required. The new definition of clinical laboratory experience is “a minimum of six months of full-time experience in at least four of the five categories: microbiology, serology/immunology, chemistry, hematology, and immunohematology.” This last definition is vague and indefinite, allowing the Board to decide on a case by case basis what “six (6) months” means and what “full-time” means. Moreover, the proposed rule does not require a minimum of six (6) months in each of the four (4) specialty areas. The current training requirement of four-hundred (400) clock hours in each specialty area, provides a clear standard to determine if the individual has been properly trained. In allowing an individual to sit for the exam without this defined training and with no clear experience route, the Board has arbitrarily lowered the standards for safe practice of laboratory science or has so vaguely stated the requirements that such lower standards can be effected in decisions made on a case-by-case basis. No rationale was offered in evidence for requiring an individual to have experience in four (4) out of the five (5) specialty areas that make up the general category. Thus an individual could qualify to take the general exam with no formal training, have an undefined amount of experience in only four (4) specialty areas, have no experience in one (1) of the five (5) areas and still become licensed. When this situation is combined with the evidence that an individual could pass the generalist exam by failing all of the questions in three (3) of the five (5) specialty areas, then the result is a failure by the Board to set adequate minimum standards for safe practice of laboratory science by the proposed rule. The Board provided no new evidence concerning why it had now decided to establish an experience route to examination and licensure, other than to simply contend that there had always been individuals who wanted to qualify by experience. The evidence shows that the prior Board had systematically and recently reviewed all of the medical technician qualification rules and had decided not to provide an experience means for qualification. No preponderant evidence was offered of a clear, logical rationale for such changes, only a few short months after the current rules took effect in December 1995 and before an opportunity was even afforded to administer the first scheduled examination under the new rules (in October 1996). The Board also seeks to change the “Director Examination Rule” to provide that only national certification examinations will be given, rather than the current state examinations. The qualification requirements that a candidate would have to meet to qualify to sit for the various national examinations exceed the current qualifications needed to sit for the state examinations. The evidence shows that the prior Board had received reports from the state examination services that the national certification examinations now proposed to be required do not meet the state examination services rules for national examinations. It was also shown that by changing the rule to require Director candidates to sit for certain specified national certification examinations that there would be some individuals who could qualify under the state requirements to sit for the Director examination, but who could not qualify to take any of the specified national examinations. Thus, under the current qualification rule for Director, which was not proposed to be changed, there would be no available examination for such individuals to take. No evidence was produced by the Board as to why it had proposed to change the Director examination rules or any evidence that it has received any different information from its examination services or other sources, compared to what the prior Board had heard and considered when it adopted the current Director examination rule, effective December 1995. The Petitioners also challenge the proposed changes that would apparently create two (2) types of technician licensure, “general” and “high complexity.” In light of the statutory definition found in Section 483.803, Florida Statutes, it would seem to create two (2) categories of technicians, those who perform general practice and those who do high complexity testing. The Board argued that it was re-arranging existing provisions found in several current rules into one rule regarding the qualifications needed by a medical technician in order to perform high complexity testing. Additionally, the Board maintains that it was aligning the Board’s rules with the training and education requirements in CLIA, that personnel must have if they are going to perform high complexity testing (only). The Respondent asserts that the proposed rule “mirrors” the CLIA requirements and that the current rule does not. The Petitioners maintain that there is no statutory authorization for the Board to place in its rules any qualification standards which would permit technicians to perform high complexity testing, merely for the purpose of meeting CLIA standards. The Board’s evidence indicated that this was desirable so that the state could qualify for an exemption from CLIA inspections. However, the Board did not present any evidence of any change in the CLIA regulations or any change in circumstances since the enactment of the current rules, that the current Board had heard, that would warrant making the proposed rules “mirror” the CLIA regulations. The Board presented no testimony in response to the Petitioners’ argument that two (2) types of licensure were being created, and especially in light of the testimony that the previous Board had accepted advice of its counsel not to create that type of provision. Proposed Rule 59O-3.002(2), would allow non-licensed personnel to teach clinical laboratory courses. The only evidence offered by the Board was that it had received comments about the advantages and disadvantages of the two (2) possible options—licensed versus non-licensed instructors and that it had decided to change the rule. The Board did not specify when these comments were received and did not present any evidence to show that any different data, studies or information had been received by the current Board when it decided to change the current rule. Further, Section 483.811(2), Florida Statutes, provides a statutory requirement for licensure of personnel engaged in training of students of laboratory science. Thus the proposed rule conflicts with the statute. The Petitioners also maintain that the Board has abdicated its oversight of development and establishment of laboratory testing, training standards and programs by incorporating by reference the requirements of the Department of Education in this area, when Section 483.811, Florida Statutes, requires it to perform oversight of the development of such standards. This is with reference to the proposed change to current Rule 59O-3.003. The Board presented no evidence for the reason for this change or if any circumstances had changed or new information had come to the attention of the current Board, since the current rule was adopted in December 1995. The proposed rule which changes current Rule 59O-3.003, would fail to require those trained at the technologist level to meet the training requirements of the technician level, as shown by proposed Rule 59O-3.004. The result will be that the technologists who supervise the technicians will not be required to meet the training requirements of the technician personnel they are supervising. This can lead to a general lowering of the standards designed to protect the public health in violation of the legislative mandate, referenced above. No evidence was offered by the Board concerning why these requirements found in existing Rule 59O-3.003(4)(e)i., were eliminated by the proposed Rule 59O-3.004. Findings of Fact as to Intervenor Paragraphs two (2) through five (5) of the Intervenor’s Proposed Findings of Fact are adopted by reference. They concern establishment of the Intervenor’s standing and the agency has stipulated that the Intervenor FABB has standing to challenge the procedural notice and the manner in which the agency implemented rule-making proceedings. A proposal to terminate the blood banking specialty, enacted by the rules which took effect in December 1995, as it pertained to the subject proposed rules, was never agendaed nor discussed at any meeting of the Board. Based upon un-contradicted testimony, it was apparent that a course of communication, cooperation and assistance had occurred between representatives of the agency and its predecessors and representatives of the Florida Association of Blood Banks (FABB) regarding the development and implementation of the rule pertaining to the blood banking specialty designation. This included communications from representatives of the FABB to the agency and its predecessors to set up a committee to resolve various licensure issues pertaining to unique needs of blood bank personnel. The agency and the FABB worked closely together for a number of years to address the problem and develop a rule providing for a blood bank specialty and examination. That rule was adopted in December 1995, and the first examination under that new rule was scheduled to be administered in October of 1996. At no point during the period that the Board was presumably considering repeal of the rule providing for the blood bank specialty and related changes to rules pertaining to technologists and technicians, did it communicate or otherwise notify the FABB of its intended action, until the filing of a Notice of Proposed Rules in the Florida Administrative Weekly on August 23, 1996. The agenda for the meeting held in connection with the workshop and Board meeting on March 7-8, 1996, made no specific notice that a decision to delete the blood banking specialty would be considered. Rather, it noted only that a workshop would occur in which the Board would receive input from the public. Drafts of the proposed rule changes were not available for review by the public at the June 13th, 14th, and 15th meeting of the Board. The Board did not receive any public policy input regarding termination of the blood bank specialty rule, from the time it was adopted in December of 1995 through the Board’s decision to repeal it in June 1996. On August 23, 1996, the agency filed a Notice of Rule Making. The Notice of Rule Making provided that if requested, a hearing would be scheduled within twenty-one (21) days of the notice. There was no evidence presented by the agency that at any time prior to publication of the notice of August 23, 1996, it had held workshops or otherwise explicated its decision to terminate the rules pertaining to the blood banking specialty. While the agency referred to several workshops which were held in March and June of 1996, there was no testimony that repeal of the blood banking specialty was agendaed or discussed.
The Issue Whether or not all or part of the 40 statements challenged in the petition of Great American Reserve Insurance Company violate Section 120.535 F.S. requiring the agency to immediately discontinue all reliance upon the statements or any substantially similar statement as a basis for agency action.
Findings Of Fact On June 13, 1994, Petitioner filed a petition for administrative determination of agency statement. The petition listed the following agency statements and alleged that each constituted a rule pursuant to Chapter 120.52(16), F.S. which had not been adopted by the rulemaking procedures provided by Section 120.54 F.S. [1993]. The challenged statements are as follows: Respondent issues a form which solicits information as follows: Please provide the following information for each approved and pending annuity contract: Form number. Name of form, if any. Date approved or if pending. What are the surrender charges and for how long? What is the initial interest rate and for how long? What is the guaranteed interest rate? Are there any bonuses? If so, for how long and under what circumstances are they paid? Is this annuity two-tier? If so, how is interest applied? What field compensation is paid for each variation? Are any of these forms field issue that allow the agent to write in the current rate of interest? If so, what controls are in place to guarantee accuracy? Respondent issues a form which solicits information as follows: Please list any other annuities offered by the company and their corresponding contract maintenance fees, administration charges, surrender charges, etc. Respondent issues a form which solicits information as follows: Please provide the agent compensation levels associated with each form and/or set of surrender charges. Respondent issues a form which solicits information as follows: Please describe the specific calculation basis of the various annuity purchase rates/settlement options. Please include sample calculations of all options at a selected age(s). Respondent issues a form which solicits information as follows: What percentage sales are expected to be replacements of an existing contract? Please identify the replacement percentages by source (internal, external, 1035 exchanges, etc.). Respondent issues a form which solicits information as follows: [Provide] a brief description of the market and marketing method. Respondent issues a form which solicits information as follows: Please provide the following: Agency training procedures as they relate to this form, Any brochures provided to agents which refer to this form, Any guidelines to assure that policy comparisons are accurate and fair, Standards to ensure that no marketing methods are used which would have the effect of inducing replacement sales through misleading representations, and All forms, other than those required by Rule 4-151.006 and 4-151.007(3)(b), used to a execute replacement sales. Respondent issues a form which solicits information as follows: Please describe the company's practice concerning credited interest rates for annuity products in renewal years. Does the credited interest rate on a given date vary by the duration of the policy within a policy form block of business? If so, please describe the relationship between the various rates. How is this practice disclosed in sales literature for its products? On an annuity policy, varying the death benefit by issue age and duration is unfair discrimination under Ch. 626.9541(1)(g). It is not appropriate to vary the death benefit by age at death for an annuity policy. Variation of surrender charges in an annuity policy by age results in unfair discrimination under Ch. 626.9541(1)(g). Basing the surrender charge in an annuity policy on the age of the annuitant is unfair discrimination under Ch. 626.9541(1)(a). Where surrender charges, which are guaranteed in an annuity contract, vary between forms and the policy parameters, which vary in support of these different surrender charges (interest, bonuses, etc.), are not guaranteed in the contract, if a company were to have products with different surrender charges this would constitute unfair discrimination under Ch. 626.9541. Unfair discrimination is prohibited under annuity contracts by Florida Statute 626.9541(1)(g). The Department continues to receive filings with many variations of interest rates and surrender charges for which the surrender charges are guaranteed and the interest rates are not. These many combinations, applied to the same type contracts, violate this statute. If a single insurance company offers more than one annuity policy in the same market in Florida, the values to the purchaser pursuant to guaranteed parameters under each policy must be actuarially equivalent to those of each other policy. A withdrawal provision in an annuity contract which waives surrender charges on all or part of a partial surrender but imposes surrender charges on all of a total surrender will produce unfair discrimination. Proposed interest rate differentials must result in compensatory guarantees across whatever number of free withdrawal options are made available in an annuity contract for a block of business. It is the position of the Florida Department of Insurance that where multiple annuity products are presented for approval in the State of Florida that the examination of the guaranteed parameters of the policies must all result in the same actuarially equivalent benefit to the beneficiary of the policy for a block of business. If you looked at a block of business sold under each policy, taking into account the distribution of that business and the persistency patterns of that business over the life of that block of business, there must be a comparable return to the policyholder. Less than half a point would be considered approaching reasonable. In an annuity policy, where the present value at death of the amount of death benefit paid is based on the manner in which it will be paid, this is discriminatory pursuant to Ch. 626.9541. It should be revised so that the death benefit options are actuarially equivalent. Each settlement option which may be exercised under an annuity policy must be the actuarial equivalent of each other settlement option offered under that policy. Settlement options offered in an annuity policy may not vary based on the age of the policyholder. An annuity policy may not contain a one direction market value adjustment. One direction MVA does not provide equitable treatment. such an adjustment should be allowed to move equally in both directions to prevent inequitable and discriminatory treatment under Ch. 626.9541. The Department of Insurance mandates compliance with the provision in the current draft of the standard non-forfeiture law for annuities that guaranteed minimum annuitization rates must be at least that guaranteed during the accumulation phase, for a policy not to violate Ch. 626.9541(1)(a) and Ch. 627.411(2). In an annuity contract, the guaranteed minimum annuitization rate may not be less than the guaranteed minimum accumulation rate, per the current draft of the standard non- forfeiture law for deferred annuities. The Department considers a minimal measure of benefits being reasonable in relation to premiums under Ch. 627.411(2), to be compliance with the standard non-forfeiture law. The guaranteed minimum annuitization rate in an annuity policy may not be less than the guaranteed minimum accumulation rate, per the current draft of the standard non-forfeiture law for deferred annuities. The Department continues to feel that attribution of mortality expense charge to variations in the annuitization phase is inappropriate. The current draft of the standard non-forfeiture law for deferred annuitities allows use of projection scale G to be applied to the 1993 table a to account for possible future mortality improvement. It would also appear inappropriate to deduct a mortality charge in the annuitization phase for a mortality risk from the accumulation phase, as the risk no longer exists. Annuity policy forms may not be approved unless all sales brochures and literature are submitted with the forms. All annuity contracts must contain a table of guaranteed values. A table of guaranteed values in an annuity policy must demonstrate any available partial withdrawals not subject to surrender charges, even if the free partial withdrawal provisions are set out in the policy. An annuity contract must include a table of guaranteed minimum annuitization rates. Current company practice may not be presented in the illustration or brochure as a product characteristic of an annuity policy. Only contractually guaranteed items may be presented as policy parameters. If a contract contains proposed provisions which would allow the company to reserve the right to make future changes in charges, guarantees or contractual provisions in the policy, this would violate Ch. 627.474. A sales illustration in an annuity policy must display surrender values, even if the surrender charges are disclosed in the illustration. An illustration in advertising of an annuity policy must demonstrate any available partial withdrawals not subject to surrender charges, even if the terms of a free partial withdrawal provisions are set out in the advertising. Computer generated sales illustrations for annuity policies must include the following: Name of the person that the illustration is prepared for. Name of the agent preparing the illustration. A current date. A proposed date of maturity. Disclosure of all expense charges including a clear statement of the surrender charges. An illustration in advertising of a one tier annuity policy must specify the maturity date. The agent is not permitted to write in the current interest rate in the sales brochure. Death benefits or settlement options in an annuity policy to be sold to males and females must be based on male mortality tables for men, female mortality tables for women or gender blended mortality tables. Statements 1-8 challenge forms used by the Department of Insurance soliciting the enumerated information. Statements 9-40 challenge statements of policy used by the Department in review of annuity insurance policy and advertising forms. Between the filing of the Petition herein and the date of formal hearing, the Respondent agency filed a notice of rule development workshop. (See Finding of Fact 36) The parties stipulated: That Petitioner has standing herein as a person substantially affected by the agency statements challenged in the petition herein. That each challenged agency statement is an agency statement defined as a rule under Section 120.52(16) F.S.; and That none of the challenged agency statements have been adopted by the rulemaking procedure provided by Section 120.54 F.S. [1993]. By reason of the parties' stipulations, the only matter to be determined is whether or not the agency is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address the statements challenged by the petition herein. In an effort to establish minimal standards on a wide variety of issues, the Department of Insurance and State Treasurer has recently tried to approach rulemaking in a holistic or coordinated manner among its various bureaus and areas of technical expertise instead of piecemeal, as historically. In 1989-1990, the agency adopted 225 forms as rules, reducing the number of forms in use from 800. Its last wholesale rules review and revision occurred in the fall of 1991, partly in response to the legislative creation of Section 120.535 F.S., was internally code-named "the rules reorganization project," and met the statutory March 1, 1992 deadline to formalize existing non-rule policies. Both projects were conducted under the oversite of agency attorney Ruth L. Gokel, of the agency's legislative and rules section. Since then, the agency has largely deferred to its technical experts to initiate rulemaking, and not to its lawyers. However, anytime a regulatory employee approaches the legislative and rules section, that section immediately initiates rulemaking procedures. While Ms. Gokel does not provide routine oversite to the agency's bureaus or divisions to determine whether they are routinely using non-rule policy, she has the authority to recommend to agency bureaus and divisions that they are in need of rules. Because she is familiar with the complex processes for promulgating rules, she coordinates much of the agency's rule drafting. Ms. Gokel created a departmental manual on rulemaking in June 1991. The manual was published after enactment of Section 120.535 F.S. Portions of that manual, upon which Petitioner strongly relies, provides: any interpretation of a statute or any requirement generally imposed on agents, companies or other regulated entities as a group which has not been adopted as a rule, is a non-rule policy. * * * The first time we interpret a statute and apply it to a particular fact situation, the interpretation is not as yet a statement of general applicability and thus is not a rule. The second time an issue arises . . . we need to begin to formulate a rule. The third or fourth time a statute is interpreted and applied in a given manner, a rule should be published. Petitioner views this manual as binding upon the agency to begin rulemaking in some form immediately upon any agency employee imposing any statutory interpretation for the first time and even if the statutory interpretation is still only part of an individual's mental process. Petitioner also views the manual as requiring the agency to publish a rule upon the third or forth similar interpretation. However, the competent substantial evidence as a whole shows that the manual's pronouncements were, at best, aspirational. The manual was designed as the agency's first best attempt to educate its non-lawyer experts concerning their responsibilities under a new law, to ensure agency compliance with the new law by "picking up any non-rule policy floating around", to head off potential violations of the new law, and to minimize the number of potential petitions challenging agency statements under the new law. The manual also was in line with the agency's new evolving coordinated approach to rulemaking. The manual is designed to alert laymen to rulemaking problems, and was revised in December 1993. It will continue to be revised periodically. Prior to the filing of the Petition herein, the Department adopted checklists to aid insurers in their submission of policy forms and to aid the Department staff in their reviews of such form filings. The checklists are adopted as forms in Part II of Rule Chapter 4-149. Prior to the filing of the Petition herein, the Department adopted rules governing the review of advertising material for annuities. Those rules may be found in Part II of Rule Chapter 4-150. The Department has conducted actuarial reviews of annuity filings only since May of 1992. Although there were no statutory changes on or about that date, the Department was motivated to institute much closer scrutiny of annuities and the sale of annuities in this state as a result of the rule challenges to the Department's "bank rules", Chapter 4-223 F.A.C. Actuarial review by the agency has evolved in order to ensure that the products are clearly presented, that they are not unfairly discriminatory, that the sales presentations and contracts are not misleading, and that the product has not been designed for use with inappropriate marketing practices. These are statutorily permissible goals. See, Chapter 627 F.S. Of necessity, the Department review must combine its regulatory concerns into one cohesive set of policy statements. The actuarial review of annuities was first conducted by actuary Mike Morgan from May 1992 to about February 1993, when that responsibility was assumed by another Department actuary, Tom Foley. In December, 1993, the responsibility shifted to yet another Department actuary, Linda Ziegler. During the course of the reviews performed by each of these agency employees, judgments were made as to particular aspects of the actuarial review. Those judgments regarding the particular forms being reviewed were expressed in letters to the companies involved. Some of these letters were requests for additional information. If the additional information were supplied and, in the opinion of the reviewing actuary, it did not result in a violation of Florida statutes or rules, then the filing was approved. If the reviewing actuary found a violation based on the additional information, the filing was disapproved. Other letters were disapproval letters after a complete review of all the requested information. Actuarial review is an arcane business involving informed consideration of many different aspects of a filing. The decision to approve or disapprove is made on the basis of the totality of the filing. It may be that one aspect of a particular filing might not be entirely within the required parameters in the judgment of the actuary, but that aspect, in that particular filing, might be offset by another aspect, which in turn would render the filing approvable. All pieces of the whole are interrelated and the whole is complex. When Ms. Ziegler became responsible for the filings, she consulted with Mr. Morgan and Mr. Foley. Over the course of the two years of review, the actuaries involved wrote several hundred letters addressing actuarial issues on a situation by situation basis as each situation arose. Between December 1993 and the filing of the Petition herein, Ms. Ziegler was the responsible reviewing actuary. During those approximately six months, Ms. Ziegler consistently and uniformly applied the statements challenged to every application for annuity policy form and advertising form approval filed. Thus, even those statements used relatively few times have been used every time the policy embodied in the statement could have been applied. Additionally, departmental letters to insurance company applicants for approval of annuity policy and advertising forms, some 630 separate applications of challenged statement numbers 2, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 and 40, related to unfair discrimination pursuant to Section 627.9541(1)(g) F.S. Challenged statement number 29 has been the articulated agency policy for at least 21 months, since the issuance of Department of Insurance Informational Bulletin 92-032 issued October 21, 1992. In January of 1994, Mike Morgan drafted language intended for the agency's legislative package for the 1994 session to address parts of the problem of actuarial review statutorily. Although agency personnel believed the agency had, and has, authority to perform these reviews, Ms. Ziegler testified that it is always better if matters are addressed by specific statutes because they are then much less subject to challenge. The Legislature did not address the issue of annuities in 1994. However, Mr. Morgan's work remained available to Ms. Ziegler when she began drafting what eventually became the Department's proposed rules on the subject. In March 1994, Ms. Ziegler began work on a draft bulletin to send to the companies to inform them in a more comprehensive way of the Department's current interpretations of several parts of the actuarial review problem. At about that time, she met with Department attorney Dennis Silverman who advised that eventually she would need to pursue rulemaking. Ms. Zeigler was unavoidably absent from the workplace at some time during this period due to an accident. When she returned to her office, she prioritized what she considered "more immediate" work. In May 1994, Ms. Ziegler returned to the draft bulletin, made a few minor changes, and then abandoned the project in favor of proposed rules. The Petition in this cause was filed June 13, 1994. Ms. Ziegler was aware that the forty statements had been challenged by the Petition shortly after the Petition herein was filed. In the third week of June 1994, Ms. Ziegler sought out Ms. Gokel. At that time, Ms. Ziegler had draft rules she felt cohesively addressed the actuarial review necessities, including addressing certain misleading sales practices. She also had several of the checklists adopted in Part II of Chapter 4-149 F.A.C. on which she had drafted proposed changes. Her comprehensive package addressed the totality of the necessary review and, as a result, also addressed each of the forty statements challenged in the pending Petition. Ms. Ziegler represented to Ms. Gokel that she was comfortable with the whole package and was ready to go public with it. Ms. Gokel informed Ms. Ziegler that since February, 1994 Ms. Gokel had had an assignment to make changes to the same checklists and had already had two meetings, in February and in March, with two other members of the Department regarding the same matter. Yet another member of the Department, Kim Forrester, had been working on proposed changes to the advertising rules in Part II of Chapter 4-150 F.A.C. Ms. Forrester was working with another departmental attorney, so in line with the agency's comprehensive approach to rules, Ms. Gokel had the foregoing assignment transferred to her. Based upon Ms. Gokel's considerable education, training, and experience in rulemaking, her understanding of agency policy concerning the need for and use of rule development workshops, the great amount of insurance industry interest which can reasonably be anticipated for the draft rules, and her personal knowledge regarding the complexity and breadth of the actuarial matters addressed in the draft rules, Ms. Gokel determined that a rule development workshop was essential. Rule workshops have been more the norm than the exception with this agency since at least 1992. The agency published its Notice of Rule Development Workshop in the Florida Administrative Weekly on July 1, 1994. The notice stated that a preliminary draft of the rules would be available for distribution on July 22, 1994, and that the workshop would be held on August 23, 1994, from 2 to 4 p.m. Respondent's witnesses affirmatively demonstrated significant planning and tangible steps that have been taken in furtherance of the rulemaking process since the filing of the foregoing notice. Ms. Gokel has devised a feasible preparatory checklist or schedule for meeting the deadlines announced in the published notice. Between publication of the Notice of Rule Development Workshop and formal hearing, something has been accomplished almost every day. In accord with this schedule, Ms. Gokel has once again met with Ms. Ziegler to discuss the proposed changes; has worked on the needed changes to the checklists with the secretary in the Bureau of Life and Health Forms and Rates because those checklists are documents in the "Lotus Notes" software program not available to Ms. Gokel in the agency's legislative and rules section; has reviewed the statutory authority supplied by Ms. Ziegler and has added the history notes where they were missing in the draft prepared by Ms. Ziegler; has incorporated Ms. Ziegler's and Ms. Forrester's proposed changes into the draft of the advertising rules; has reworked Ms. Ziegler's and Ms. Forrester's drafts for compliance with the Secretary of State's filing requirements; and has produced preliminary rule drafts. These steps have been expeditious and are themselves tangible evidence of the agency's current good faith efforts in the rulemaking procedure. Other steps listed by Ms. Gokel as necessary remained to be accomplished after formal hearing. Those included a meeting between Ms. Gokel and Ms. Forrester about the advertising rules; preparation of the existing rules which adopt the checklists showing the new revision dates; a meeting with Ms. Ziegler to discuss another proposed new rule in the actuarial review rules; a comprehensive review of the history notes; consolidation of the existing drafts into a single document for distribution as noticed for July 22, 1994; and preparation of the sign-in sheets and agenda for the workshop noticed for August 23, 1994. Provisions for timely accomplishing these tasks has been made on Ms. Gokel's schedule. As of the date of formal hearing, Ms. Gokel had already discovered several other statutory sections which should have been included in the Notice of Rule Development Workshop. She expressed the intent to file an amended notice reciting the additional statutory authority, but not otherwise changing the date or time of the workshop. This discovery represents at least one advantage of a comprehensive approach to agency rule drafting as practiced by this agency. Once the workshop draft has been distributed on July 22, 1994, the agency anticipates holding the workshop on August 23, 1994 and leaving the record open for written comments if appropriate. The agency's current intent is to leave the record open for only two weeks, which the agency's past workshopping experience has proven sufficient. Although this period could be extended further, there is no evidence in this record to suppose it will be. After the record closes, the plan is for agency personnel to conduct an internal review of the comments that were received, if any; Ms. Gokel will prepare a revised draft of the rules, as warranted, and will circulate an internal route slip for approval of the agency "senior management" involved. Only the lattermost effort of the route slip is an internal procedure peculiar to this agency and is not a requirement of Chapter 120 F.S. Historically, this route slip procedure has been ministerial and has only taken a few days. There is no clear evidence to show it will be different or take longer this time. Finally, the agency will have to file for notice, pursuant to Section 120.54 F.S. Petitioner presented only speculation to the effect that the foregoing schedule would not be met. The agency's assessment that in the area of actuarial review, moving from "first-time-ever" review of annuities to a comprehensive rule package in two years is the rulemaking equivalent of the "speed of light," may be more colorful than informative and is not binding upon the finder of fact, but the foregoing agency schedule and the agency's actions thereon are found to be currently expeditious in the circumstances of the number and type of rules necessary for such complex subject matter. If any challenged statement were not being addressed by the rulemaking process, the agency would have been unable to demonstrate that the agency rulemaking process is currently proceeding expeditiously and in good faith. However, here, the agency affirmatively demonstrated through unrefuted testimony that its draft rules have addressed, with at least some degree of particularity, each of the forty statements challenged by the Petition. Statements (1) and (2) of the Petition for Administrative Determination of Agency Statement involve requests for information of a company as to the other annuity products which the company is offering, have approved or are pending approval. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, DI4-556, and DI4-557. Statement (3) of the Petition involves a request for information concerning the agent compensation levels paid on the proposed product. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-548, DI4-555, DI4-556, and DI4-557. Statement (4) of the Petition involves a request for information regarding a specific description of the basis of the guaranteed minimum annuitization rates in the contract. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, DI4-556, and DI4-557. Statement (5) of the Petition involves a request for information regarding sales of the product which are expected to be replacements of existing coverage. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, and DI4-556. Statement (6) of the Petition involves a request for information regarding the market to be targeted and the marketing method to be used with respect to the proposed form. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-548, DI4-549, DI4-551, DI4-555, DI4- 556, and DI4-557. Statement (7) of the Petition involves a request for information regarding the agency training methods to be used with respect to the proposed form. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1 Forms DI4-555, DI4-556, and DI4-557. Statement (8) of the Petition involves a request for information regarding the credited interest rates in renewal years and their disclosure to consumers as practiced by the company. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, DI4-556, and DI4- 557. Statements (9) and (10) of the Petition address the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S., in the death benefit offered in an annuity product. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4- 149.064(2)(a)3. Statements (11) and (12) of the Petition address the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S., in the variation of surrender charges by age in an annuity product. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.065(4). Statements (13), (14), (15), and (18) of the Petition address the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S., between essentially identical products which have variations in guaranteed surrender charges, and other guaranteed parameters, and do not provide comparable benefits for premiums paid for the annuity products. This subject is addressed in the proposed draft Rule 4-149.071, Petitioner's Exhibit I. Statement (16) of the Petition addresses the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S., between policyholders of the same annuity form in treatment under the withdrawal provisions. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.065(4)(c). Statement (17) of the Petition addresses a special case scenario of the Department's concern as expressed in statements (13), (14), (15), (18). This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.071. Statement (19) of the Petition addresses the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S. regarding the payment of a death benefit. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.066, and 4- 149.064(2)(a)3. Statement (20) of the Petition address the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S., in the value of the annuitization value available in an annuity product. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4- 149.066. Statement (21) of the Petition address the Department's concern about unfair discrimination under Section 626.9541(1)(g), F.S. in the choice of annuitization options available in an annuity product. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.066. Statements (22) and (23) of the Petition address the Department's concern about misrepresentation and unfair discrimination under Section 626.9541(1)(a) and (g), F.S., in the inclusion of a Market Value Adjustment which affects the policy in only one direction. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4- 149.067(2). Statements (24), (25), and (27) of the Petition address the Department's concerns about misrepresentation under Section 626.9541(1)(a), F.S., and ambiguity and reasonableness of benefits to premiums under Section 627.411(1)(b), and (2), F.S. in the interest rate component of the guaranteed minimum annuitization rates in the annuity contract. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4- 149.064(2)(a)4. Statement (26) of the Petition addresses the Department's concern about reasonableness of benefits to premiums under Section 627.411(2), F.S. for an annuity contract. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.064(2)(a). Statement (28) of the Petition addresses the Department's concern about reasonableness of benefits to premiums under Section 627.411(2), F.S., in the treatment of charges under an annuity contract. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4- 149.064(2)(c). Statement (29) of the Petition addresses the Department's concern about timely review and approval of sales literature as noticed by Bulletin 93- 032's expression of existing Rule 4-150.120 F.A.C.. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-548, DI4-549, DI4-550, DI4-551, and DI4-555. Statements (30) and (31) of the Petition involve a requirement for the contract to contain an accurate table of guaranteed values, to prevent ambiguity under Section 627.411 (1)(b), F.S. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, DI4-556, DI4-557. Statement (32) of the Petition involves a requirement for the contract to contain an accurate table of guaranteed minimum annuitization values, to prevent ambiguity under Section 627.411(1)(b), F.S. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-555, DI4-556, DI4-557. Statement (33) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105. This subject is addressed in the proposed draft rules in Petitioner's Exhibit J, proposed draft Rule 4-150.105(1)(a). Statement (34) of the Petition addresses the Department's concern that a contract explicitly describe policy provisions over the life of the contract, under Section 627.474, F.S. This subject is addressed in the proposed draft rules in Respondent's Exhibit 1, Forms DI4-548, DI4-555, DI4-556, and DI4-557. Statement (35) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105. This subject is addressed in the proposed draft rules in Petitioner's Exhibit J, proposed draft Rule 40150.105(1)(b). Statement (36) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105(1)(f) F.A.C.. Statement (37) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105. This subject is addressed in the proposed draft rules in Petitioner's Exhibit J, proposed draft Rule 4-150.105. The requirement expressed by statement (37)(e), is presently found in currently promulgated Rule 4-150.106(1). Statement (38) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105. This subject is addressed in the proposed draft Rule 4-150.105(1)(e). Statement (39) of the Petition addresses the Department's concern about accurate, complete and non-misleading presentation of policy characteristics in sales literature, under existing Rule 4-150.105. This subject is addressed in the proposed draft rules in Petitioner's Exhibit J, proposed draft Rule 4-150.105(1)(d). Statement (40) of the Petition addresses the Department's concern about reasonableness of benefits to premiums under Section 627.411(2), F.S., and unfair discrimination under Section 626.9541(1)(g), F.S. in the value of the death benefits and guaranteed annuitization rates for an annuity contract. This subject is addressed in the proposed draft rules in Petitioner's Exhibit I, proposed draft Rule 4-149.064(2)(a)4. The testimony that the forty challenged statements are addressed in the Department's draft rules [Pet.I, J; Resp. 1], as set forth above, is uncontroverted. The Petitioner did not present any evidence nor elicit any testimony refuting or otherwise discrediting this testimony on that issue.
