Title: Opinion File 78-47 thru 78-61
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Title: Opinion File 78-47 thru 78-61
Physical Description: Book
Language: English
 Subjects
Spatial Coverage: North America -- United States of America -- Florida
 Notes
Abstract: Buddy Blain's Collections - Opinion File 78-47 thru 78-61
General Note: Box 14, Folder 5 ( Opinions 1976 - 1977 - 1976 - 1977 ), Item 87
Funding: Digitized by the Legal Technology Institute in the Levin College of Law at the University of Florida.
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Bibliographic ID: WL00003535
Volume ID: VID00001
Source Institution: Levin College of Law, University of Florida
Holding Location: Levin College of Law, University of Florida
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Full Text




January 25, 1978 L'

MEMO KEY WORDS:

TO: LMB
FR: TEC
RE: Economic Impact Statements/Administrative Rule Making Proceedings

Pursuant to your recent request I have obtained a copy of
the recent opinion from the Division of Administrative Hearings
holding a proposed rule invalid as a result of a defective
economic impact statement. I also took the liberty of
attempting to locate companion opinions in the Administrative
Law Reporter over at the Hillsborough County Law Library.
Only one additional administrative opinion was discovered.

I have attached copies of both decisions. In both cases
Ken Oertel, the Director of the Division of Administrative
Hearings, served as Hearing Officer.

In the case of FLORIDA CEMETERY ASSOCIATION v. STATE BOARD OF
FUNERAL DIRECTORS AND EMBALMERS, DOAH Case No. 77-602R,
Mr. Oertel, pursuant to 120.56, F.S., declared an existing
administrative rule invalid for failure to comply with the
economic impact statement requirements set forth in 120.54, F.S.

The second decision was rendered in the case of ALICE P. &
SUSAN A., et al. v. DEPARTMENT OF HEALTH AND REHABILITATIVE
SERVICES, Case No. 77-1974R. In this case a proposed rule was
declared invalid under 120.54(4), F.S., for failure to prepare
an adequate economic impact statement during the course of the
rule making proceedings.

These decisions serve to illustrate that an attack based upon
an alleged defective economic impact statement can be launched
against either proposed rules or existing rules. (The existing
rule that was attacked in the case involving the State Board of
Funeral Directors and Embalmers was adopted subsequent to the
effective date of the economic impact statement requirements
within Ch. 120, F.S.)

In both decisions, Mr. Oertel relied upon the First District
Court of Appeal decision of DER v. LEON COUNTY, 344 So2d 297
(1st DCA Fla. 1977) for the proposition that failure to prepare
an adequate economic impact statement in adopting an administrative
rule is a fatal defect to the rule's validity.

In both cases the economic impact statements offered by the
respective agencies were demonstrably false. In both cases the
agency was unable to demonstrate that any attempt was made by
the agency to comply with the economic impact requirements within
120.54(2), F.S.


___








Memo to LMB
Page 2
January 25, 1978


The question of what would constitute an "adequate" economic
impact statement remains to be determined.

It is my conclusion that this could be a significantly
troublesome aspect of Southwest Florida Water Management
District rule adoption proceeding. I believe that this is
an area that merits further consideration. Please let me
know whether I may be of further assistance.



TECjr/jf
Attachments






14 (~ )T 0 ~ 1d~g'I ~ tl~wim D ~i


rU.k-C C (4, 1. 1. L IIA ( I- Jn ^JJALJU)k3J L^
SJOHN VAN TALK OF TALLAHASSEE
Herald Capital Bureau
Department of- Administration officials
aren't in the market for a new pickup and welfare support costs of children who
truck just yet, but they may be if a court co
ng upholding a determined woman
Challenged state hiring practices Hearing Examiner Kenneth Oertel ruled
-stands. In the abortion case that economic-impact
SThe First District Court of Appeal ruled statements must be prepared by qualified
last week in favor of frustrated job-seeker persons using professionally accepted
Tat Harvey, who contended that 30 ob m, methodology.
i4spdcifications were Invalid because the
agency failed to adopt them as rules. VAN GIESON SHAW OERTEL'S PRECEDENT could require
.- Harvey, 29, applied in 1974 for a job as the Department of Administration to pre-
an administrative assistant and was placed pare 2,900 meticulous economic-impact
,on the register of qualified job applicants, Would be crushed if the stack slipped. statements.
'cianlng she could interview with state What would happen if the Department Administration officials, however, are
SJut the aency notd Harvey a month: of Administration added 2,900 job specifl- loath to adopt the 'specifications as rules.,
after that she was not qualified because nations to an already overwhelming set of Falling to do so, according to the district,
e lacked the to years o staff or admin les court, could result in an ih an equally burt
'.she lacked the two years of staff or admin- d". .. e situatIon where an.. disgruntled
istrative work required by the specifica- "You'd double the size of the Adminls- deosob alicant ound werean exspegrnve
-tlons for administrative assistant. She was trative Code," said William 0. Gibson, as'. administrative haco ing asn expensive
dropped from the register, meaning state. distant to Administration Secretary Wal- v a
agencies could not even consider her. lace Henderson. "We'd need a wheelbhr Harvey's plucky fight against an Indlf-
A NO-LAWYER WHO represent row to take them over to the secretary of ferent bureaucracy has put the department
A ONi ao art .of he wapresev states office, and that's conservative. We. betwe i the proverbial rock and a hard
.herself a good part of the way, Har'ey n track 6 lace. ; -
lenged the department in aa adminis- inlght eed a pickup tru ck. ,
S. Ave hearing. She won a decision thatK. It's difficult to estimate the cost of -Agency official haven't decided what
the job specifications should have been adopting 2,900 new rules, but one given Is to do, but their best hope at thi point ap;
adopted as rules. The state appealed, but' the $1 a line charged by Secretary of State pears to be finding some loophole by
the district court ruled In' Harvey's favor: Bruce Smathers' office for the required which they an appeal the district court's
-. "The irohic thing is for a person of my ub publication of new rules in The Admlnls- ruling to the Florida Supreme Court
,.caliber who was able to go through all of trative Weekly. The latest edition 6t i Th .
-this administrative flasco- t~have them Administrative Weekly had 33 proposed Harvey, meanwhile, is looking forward
4say I was not qualified to be an dminis'. rules averaging about 25 lines. to the dy when she once again applies
trative assistant is ludicrous," Harvey said. -. ., With the Department of Administration
< : '* "' ': for a state Job. She has been working for
er victory s a classic case a lone in- AT 25 LINES AC tstthe ptyear ,a techtnial assib Int ,w &
ual successfully ewheingid The sys- state $72,500, just to publish 2,900- new federally funded job training program in
em despite overwhelming The po- dLeolzand Gadsden counties.. .
tential consequences., however, mind- rules in The Administrative Weekly; The L and d o
=Boggling. secretary of state's office lists the tota An-
Sbogglng.nal cost 6f publishing The Administrative "I think it's neat that! made an Impact
The department has 2,900 job s fica- Weekly at $58,095.52. on state government, but I don't know.
tons covering 87,000 state emp es. If how much of an Impact I made at this
the agency accepts the dlst ct court's But publishing proposed rules in The point" Harvey said. *
order, it would have to adopt 2,900 new Administrative Weekly is only one small % :-
tules at a potentially staggering cost. portion of the cost of' promulgating new .
rules. Agencies must hold public hearings
-PE ADMINISTRATIVE Code, a com.- 'if demanded, and they must submit eco- UN-SIGHTLY STICKER Lt. Gov. Jim,
S lum of every existing state agency nomic impact statements on the effect of Williams is distributing campaign bumper
rule, is a set of six volumes, each about the rules. stickers that are about one-fourth the
4our inches thick. i usual size1
S etatS anenciehc hbeen srbimlthttin '." *


,tr L)e~L
a

11ibd~k ~IZ -.


would risk a rear-end collision.
Campaign press aide Bill Cox claims'
at the tiny stickers show that Wiliams

a the tost fareilghted' candidates f'-0gov-


o


When Commissioner Don Reed stacked
-the Administrative Code on'his desk dur-
ing a recent Condtitution Rbvision Comn-
Snmission debate on rule-making by state
Agencies, he could barely see over the top.
I iOtHer commissioners joked .that Reed


diculously inadequate economic-impact
statements in many cases, but that, too, Is
changing. The Department of Health and
Rehabilitative Services failed in an eco-
nomic-Impact statement on Medicaid abor-
tions, for example, to consider the birth


He presumably thinks the ministickers
will help him win election as governor
next year, but it's hard to see how. Wil-
liams main problem is lack of recognition,
but the print on his stickers is so small
that. drivers attempting to read them




STATE OF FLQRIDA
DIVISION OF ADMINISTRATIVE HEARINGS


,78-50
ALICE P. and SUSAN A., )
Individually and on behalf
of all others similarly situated, )

Petitioners, )

JEANNETTE R.; )
JACKSONVILLE WOMEN'S HEALTH
ORGANIZATION, INC.; and CENTRAL ) Case No. 77-1974R
FLORIDA WOMEN'S HEALTH ORGANIZATION,
INC., )
Intervenors,
)
V.

DEPARTMENT OF HEALTH AND
REHABILITATIVE SERVICES, )

Respondent.



APPEARANCES: Terry L. DeMeo, Esq.
For Petitioners

Jerry Traynham,Esq.
Ben Patterson, Esq.
For Petitioners

Frank Susman, Esq.
For Intervenors

George Waas, Esq.
For Respondent


FINAL ORDER

By this proceeding proposed rules of the Department of Health and

Rehabilitative Services are sought to be declared invalid pursuant to

Section 120.54(4), F.S. The original petition filed on behalf of Alice

P. and Susan A. challenges the validity of proposed amendments to Rules

10C-7.38 and 10C-7.39, Florida Administrative Code, of the Department of

Health and Rehabilitative Services, which deal with payment for Physician

Services under the Medicaid Services Program. The department proposes to

amend the above rules to limit payments for abortions to instances where

"the attending physician certifies the abortion is necessary because the

life of the mother would be endangered if the fetus were carried to term or




if the procedure is necessary to terminate an ectopic pregnancy." a- 51

The petition is this proceeding was later amended to include two

individuals denominated as Jane Doe and Janet Woe and Samual J. Barr, M.D.

In addition the Jacksonville Women's Health Organization, Inc. and Central

Florida Women's Health Organization, Inc. were permitted to intervene.

The Department of Health and Rehabilitative Services objected to having

Petitioners proceed under assumed names. This, the department claimed,

prevented them from being able to pursue discovery as to the adequancy

of the Petitioners' standing. After hearing all the testimony in this

proceeding it is the determination of this Hearing Officer that all women

of childbearing age who are Medicaid recipients are substantially affected

by the proposed rule and have adequate standing to challenge it pursuant

to Chapter 120, F.S. Since that class of women is apparently numbered in

the thousands and the Petitioners who did testify in this proceeding

adequately demonstrated such standing it can be seen the Respondent was

not in any manner prejudice by allowing several parties to proceed under

assumed names to protect their identity.

The Respondent also objected to permitting additional parties to

join this proceeding after fourteen (14) days had elapsed since the

publication of its notice of intention to adopt said rules in the Florida

Administrative Weekly. Although Section 120.54(4)(b), F.S., requires

that requests for determinations under that subsection be filed within

fourteen (14) days after the publication of this notice, it is also clear

that subsection (d) of that section specifically permits other substantially

affected persons to join the proceedings "as parties or intervenors on

appropriate terms which will not substantially delay the proceeding."
It seems clear therefore that an intervenor to this proceeding need not

petition to become party only within the fourteen (14) day time period

after the filing of the original petition. It is also apparent that

doctors who are providers of medical services are substantially affected

by the proposed rules.

This matter went to final hearing on November 29, 1977, at which

time evidence and argument was heard on behalf of all parties After




the hearing was adjourned the parties were given approximately ten (10' '7 52
days to file proposed findings and other argument which they consider to

be relevant to this proceeding.

The Petitioners challenge the proposed rule amendments on the

following grounds:

(a) That the rule attempts to restrict a payment for services

already authorized by the legislature in the current appropriations bill

and therefore is contrary to Florida Statutes;

(b) That the department prepared a faulty Economic Impact

Statement as required by Section 120.54(4), F.S.;

(c) That the rules are arbitrary, vague and impose an impossible

standard; and

(d) That the rules otherwise do not comply with the requirements

of law.

Since these issues are separate and unrelated they will be considered

individually.

(a) The Withholding of Federal Funds.

The Department of Health and Rehabilitative Services seeks to

amend the above rules in response to action taken by the federal government.

In the summer of this year the federal government cut off federal funds

which were previously paid to Medicaid recipients for non-therapeutic abortions.

Prior to that the federal government had been sharing expenses with the

state for this Medicaid Program which is administered by the Respondent,

Department of Health and Rehabilitative Servcies. The cutting off of

federal funds precipitated the rule changes which are the subject of this

proceeding. The present rule permits payments by the department for a host

of treatments under the Physician Services account, including non-

therapeutic abortions.

The department maintains that is has no choice but to stop

payments on non-therapeutic abortions when the federal government cuts

off its share of such funding. According to the Respondent, the funds

for Physician Services which were approved by the legislature in the

appropriations bill for the Department of Health and Rehabilitative




Services was passed as a joint expenditure with the federal and state 78

government both participating in the payment of all covered expenses.-

Thus, argues the Respondent, when the federal government withholds payments

for a particular service the state is obligated to eliminate such service.

Article 3, Section 12 of the Florida Constitution provides:

"Laws making appropriations for salaries of public
officers and other current expenses of the state
shall contain provisions on no other subject."

This part of Florida's constitution was interpreted in Dickinson v. Stone,

251 So.2d 268 (Fla. 1971), where the Surpeme Court indicated that in

certain situations appropriations may be made on a contingent basis, but

such contingency must be specifically spelled out in the appropriation.

In this proceeding the department maintains that the expenditure of state

funds for the payment of non-therapeutic abortions is contingent upon

the availability of federal funds for this purpose. Apparently, nowhere

in Florida's legislative budgetary enactment is any such contingency

contained or expressed. Therefore, the department's position is actually

a presumption based upon an inference.

However, what is certain is that the legislature appropriated

funds for Medicaid recipients to be used toward all "Physician Services",

of which the performance of abortions is but one of many types of medical

procedures which have been reimbursable. Without an express statement

in the budgetary enactment that such funds are to be disbursed contingent

upon the availability of matching federal funds the department's position

is not consistent with state law. As the Supreme Court stated in

Dickinson v. State, supra,

"It is a violation of an elemental principle in the
administration of public funds for one who is charged
with the trust of their proper expenditure not to
apply those finds to the purposes for which they
are rasied."

If the legislature had intended to make the expenditure of funds

it specifically appropriated contingent upon the availability of matching

federal funds it must specifically express its intention in the budgetary

enactment. No evidence was presented at this hearing that the legislature

had done so with regard to the Physician Services account although express


,53





.8 -54


contingencies appear in other parts of the state budget. Since the legisla-

ture did not do so the Department of Health and Rehabilitative ServiEs miay-.

not impound funds which have been raised and appropriated. '

(b) The Economic Impact Statement.

As a part of its rule adoption proceeding the department prepared

an Economic Impact Statement as is required by Section 120.54(2)(a), F.S. .

The Economic Impact Statement was submitted into the record as Petitioners'.

Exhibit No. 4. The statement prepared by the department concluded that ''

the adoption of the proposed rules would require no additional expenditures

of state funds, would result in a savings of somewhat over $500,000 to the

state and would have no other determinable economic impact.

The Economic Impact Statement was perpared by Michael Morton, a ,'

social and economic services program consultant of the department.

Mr. Morton had no prior training in statistics or economics. He used no

outside references, no sources of information or data, nor did he consult

any other knowledgeable workers in this area. Although the department

of Health and Rehabilitative Services has a statistical section which is

at the same location as Mr. Morton's office he did not consult with anyone

in that section before he prepared the Economic Impact Statement.

Mr. Morton testified that he read Section 120.54(2), F.S., which

deals with the preparation of Economic Impact Statements and although he

believes he understood the requirements of the statute he was generally

unfamiliar with the meaning of several terms used in the law. For example,

he stated he thought he understood what "professionally accepted methodology"

was, but he was unware if there were any standards which could be used

for such a statement as he was required to prepare or what those standards

were.





4-8-55








After reviewing the evidence presented it is evident that the
department's Economic Impact Statement does not comply with any of the
statutory requirements. Not only did the department make no effort to
seek available data which might aid in a projection of the consequences of
its proposed action, but the conclusions reached by the department are

totally invalid.
As even William Page, Secretary of the Department of Health and





78 56


Rehabilitative Services, testified,the cutting off of funds for abortions

for Medicaid recipients will undoubtably result in an increased birth -ate

among those recipients. That will require the expenditure of funds for

the actual birth itself and will further require additional monthly

assistance payments for those families. No attempt was made by the

department to evaluate the statistical probabilities or consequences which

would attend those.events. It is entirely conceivable, as Secretary Page
testified, that the failure of the state to fund non-therapeutic abortions

to Medicaid recipients would actually result in greater state expenditures

when one considers that the state will reimburse the provider for the birth

of a child and become responsible for monthly maintenance payments.

Although this is recognized by the head of the department, the department's

Economic Impact Statement does not mention this as a possible economic

consequence of its proposed action. Without belaboring the point it is

sufficient to say that the department's Economic Impact Statement is

inaccurate, incomplete and in complete contradiction with the requirements

of Section 120.54(2)(a), F.S.

The First District Court of Appeal has considered the question of

the failure of an agency to comply with the requirements for the prepara-

tion of an Economic Impact Statement in rule adoption proceedings. In

DER v. Leon County, 344 So.2d 297 (Fla 1st DCA 1977) it is concluded that

this requirement is a material aspect of the rule adoption proceeding and

the failure of an agency to comply with the statutory requirements will

render the rule adoption proceedings invalid. For this reason alone the

department's proposed rules must be declared invalid.

The purpose of having an agency prepare an Economic Impact
Statement in conjunction with rule adoption proceedings is to require it

to intelligently understand the consequences of its actions. The law

requires an intelligent and thorough study of the probable long and short




78- 57









,term consequences. The obvious intention of this design is to prevent

the agency from operating in a vacuum and to avoid unforeseen events

which might occur when the agency acts in partial ignorance of who is

affected by its actions. In this situation the department not only

did not attempt to gather relevant data as required by law but it did not

-6-




even inquire as to what data was already available. -78- bb

The Respondent, Department of Health and Rehabilitative Services

has presented a position that unless it can have been shown to have inten-

tionally failed to prepare an adequate statement it has complied with the

statute. But the department's intentions are irrelevant to a determination

of the adequacy or accuracy of the Economic Impact Statement. The department

has failed to comply with an essential requirement for the lawful adoption

of a rule.

For whatever reason, this jeopardizes the validity of the action

it seeks to achieve, regardless of the department's good intentions.

(c) The Vagueness Issue.

The Petitioners also allege that theproposed rule change seeks

to impose a standard that is so vague and arbitrary that it defies

rational or reasonable interpretation and is therefore invalid.

Two witnesses, both medical doctors who specialize in obstetrics

and gynecology, were called by the Petitioners. Both doctors have sub-

stantial experience in performing abortions. The rule in question seeks

to deny Medicaid payments for abortions "except when the attending

physician certifies the abortion as necessary because the life of the

mother would be endangered. ." The witnesses testified that pregnancy

itself to some degree endangers the life of the mother and that in addi-

tion to the inherent dangers of the pregnancy itself there often arise

many intervening situations which further jeopardize the life of the

expectant mother. Thus, according to the witnesses it is impossible to

comply with the proposed rule without resorting to guess work as to

which procedures will eventually be reimbursable and which will be

considered to be excluded under the proposed rule.

After considering the evidence and argument on this issue it

is the decision of the undersigned Hearing Officer that the rules do

not impose an impossible standard. Although it certianly opens the

door to arguments of almost a metaphysical nature, it is the opinion

of the undersigned the rules apply a standard that is capable of





8' 59


The Florida Supreme Court in Walsingham v. State, 250 So.2d 857

(Fla. 1971) struck down language in the Florida Statutes similar to the

rule in question as being impermissibly vague, but that case dealt with a .

criminal charge of conspiracy to commit abortion. The standard of the

statute which charges a crime is necessarily higher than that for a rule

which only limits reimbursement. Similarly, in State v. Barquet, 262 So.2d

431 (Fla. 1972) a similar result was reached, but also in an appeal from

an order from a criminal court.

The rule in question here does not proscribe conduct. It sets

a standard which determines which medical procedures will be reimbursed

for Medicaid recipients. Unquestionably, the standard will be a difficult

one with which to comply, however, the state has a right to limit assistance

payments.

(d) Other AZlegations of Illegality.

The Petitioners have raised numerous other grounds in their

combined objections to the proposed rules. Without considering them

separately in this order it is sufficient to state that these remaining

allegations which include lack of notice, failure to submit the rules

to a review board, conflict with the Social Security Act are either not

supported in the record or are without merit.

In addition, the undersigned Hearing Officer has reviewed all

the proposed findings submitted by the Petitioners and the Respondent.

Those proposed findings which are not resolved in this order have been

found to be either without merit or wholly irrelevant.


I __





78-60






CONCLUSION
For the above reason it is
ORDERED:
That the proposed rules 10C-7.38 and 10C-7.39 as amended by the
Department of Health and Rehabilitative Services are invalid.
DONE and ORDERED this c23r- day of December, 1977, in
Tallahassee, Florida.


KENNETH G. OERTEL, Director
Division of Administrative Hearings
Room 530, Carlton Building
Tallahassee, Florida 32304
(904) 488-9675











Copies furnished:


Terry L. DeMeo, Esq.
7210 Red Road
South Miami, Florida 33143

Jerry Traynham, Esq.
Ben Patterson, Esq.
1215 Thomasville Road
Tallahassee, Florida 32303

Frank Susman, Esq.
7733 Forsyth Boulevard
Suite 1100
St. Louis, Missouri 63105

George Waas, Esq.
Dept. of Health and
Rehabilitative Services
1323 Winewood Boulevard
Tallahassee, Florida 32301

Carroll Webb, Executive Director
Administrative Procedure Committee
Room 110, Holland Building
Tallahassee, Florida 32304

Ms. Liz Cloud
Department of State
403 E. Gaines Street
Tallahassee, Florida 32304


_ 1 __ ~~~_~_ ____




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