93-006549RX John R. Witmer vs. Division Of Pari-Mutuel Wagering Status: Closed DOAH Final Order on Friday, February 4, 1994.

Summary: Parts of pari-mutuel law sunset. ERs under remnants moot when permanents adopted, except ER says Pet. violated. Sub of new law valid tech changes.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN R. WITMER, )

)

Petitioner, )

)

vs. )

) CASE NO. 93-6549RX

DEPARTMENT OF BUSINESS AND )

PROFESSIONAL REGULATION, )

DIVISION OF PARI-MUTUEL WAGERING, )

)

Respondent. )

___________________________________)

FINAL ORDER

On December 13, 1993, a formal administrative hearing was held in this case

in Tallahassee, Florida, before J. Lawrence Johnston, Hearing Officer, Division

of Administrative Hearings.

APPEARANCES

For Petitioner: Gary R. Rutledge, Esquire

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Underwood & Purnell, P.A.

215 South Monroe Street, Suite 420

Tallahassee, Florida 32302-0551

For Respondent: John B. Fretwell, Esquire

Chief Attorney

Joseph M. Helton, Jr., Esquire

Senior Attorney

Department of Business

and Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-1007

STATEMENT OF THE ISSUES

The issues in these cases are whether the following rules promulgated by

the Respondent, the Department of Business Regulation [now the Department of

Business and Professional Regulation], Division of Pari-mutuel Wagering, are

valid exercises of delegated legislative authority: F.A.C. Rules 61D-1.002(18)

[formerly 7E-16.002(18)] and 61D-1.006 [formerly 7E-16.006]; and emergency rules

7ERR92-2(18) and 7EER92-6.

PRELIMINARY STATEMENT

On or about November 16, 1993, the Petitioner, John R. Witmer, filed a

Petition to Determine Invalidity of Rules. It challenged the validity of F.A.C.

Rules 61D-1.002(18) [formerly 7E-16.002(18)] and 61D-1.006 [formerly 7E-16.006],

and emergency rules 7ERR92-2(18) and 7EER92-6. The case was assigned to the

undersigned hearing officer on November 18, 1993, and final hearing was

scheduled for December 13, 1993, at the Division of Administrative Hearings in

Tallahassee.

On the morning of the hearing, the Respondent, the Department of Business

and Professional Regulation, Division of Pari-mutuel Wagering (the Division)

filed a Motion to Dismiss Challenge to Rule 7EER92-6 and 7E-16.006, Florida

Administrative Code. The motion was based on the assertion that the Petitioner

lacks standing. The motion was taken up at the beginning of the hearing, and

ruling was reserved.

At the final hearing, the Petitioner called no witnesses but had

Petitioner's Exhibits A through K admitted in evidence. The Department called

three witnesses and had Respondent's Exhibits 1 through 3 admitted in evidence

at the hearing. The Department also offered Respondent's Exhibits 4 and 5, and

ruling was reserved on the Petitioner's objections. It is now ruled that the

objections are overruled, and Respondent's Exhibits 4 and 5 are admitted into

evidence.

The Department ordered the preparation of a transcript of the final

hearing. The transcript was filed on January 7, 1994. Explicit rulings on the

proposed findings of fact contained in the parties' proposed final orders may be

found in the attached Appendix to Final Order, Case No. 93-6549RX.

On January 20, 1994, the Division filed a Motion for Partial Summary Final

Order, to which the Petitioner responded in writing in opposition. Like the

Motion to Dismiss Challenge to Rule 7EER92-6 and 7E-16.006, Florida

Administrative Code, filed the day of the hearing, it was based on the assertion

that the Petitioner lacks standing to challenge those rules. As the Petitioner

points out in its response in opposition, both motions are now moot, as the

issues were tried and this Final Order rules on them. The motions are therefore

denied.

FINDINGS OF FACT

1. On or about September 30, 1991, the Petitioner, John R. Witmer, applied

to the Respondent, the Department of Business Regulation (now the the Department

of Business and Professional Regulation), Division of Pari-mutuel Wagering (the

Division), for a three-year occupational license as a veterinarian. The license

was issued with a scheduled expiration in 1994.

2. In October, 1993, the Division filed an Administrative Complaint

alleging that the Petitioner violated emergency rule 7EER92-2(18) and F.A.C.

Rule 61D-1.002(18) (formerly codified as F.A.C. Rule 7E-16.002(18)) on November

11, 1992, and April 2, 1993. The charges remain pending and have been referred

to the Division of Administrative Hearings, where they have been given DOAH Case

No. 93-6638.

3. On or about June 18, 1992, the Division released the legal opinion of

its General Counsel that, if certain provisions of the statutes governing pari-

mutuel wagering were allowed to sunset on July 1, 1992, the Division legally

would be unable to regulate pari-mutuel wagering adequately, and pari-mutuel

wagering would become illegal in Florida.

4. In response to the legal opinion, several tracks and jai alai frontons

filed suit in circuit court seeking declaratory and injunctive relief. On or

about June 30, 1992, a temporary injunction was issued in the court case

requiring the parties to maintain the status quo in effect on June 30, 1992,

until further order.

5. A final hearing in the court case was held on August 10, 1992. The

court's Final Order held that the statutes that remained in effect after July 1,

1992, were "legally sufficient and not in violation of Article X, Section 7, of

the Florida Constitution (1968) [a prohibition against lotteries not sanctioned

by law]." The court dissolved the temporary injunction effective August 25,

1992.

6. After the court decision, notwithstanding the earlier legal opinion

issued by its General Counsel, the Division determined that it had the necessary

statutory authority to promulgate emergency rules to implement what remained of

the pari-mutuel wagering statutes after July 1, 1992. Approximately $1.7

billion in cash was being wagered annually. Taxes collected on the wagers

amounted to approximately $105 million a year. The possibilities for cheating

and stealing to obtain a piece of the action illegally are endless, requiring

effective regulation and constant vigilance. It is not unusual, for example,

for cheaters to attempt to drug race animals illegally. As a result, some

85,000 urine and blood samples are taken from race animals annually.

7. It was determined that, under the remnants of the statutes that

remained after July 1, 1992, there were three areas vital to the public's

welfare for which sanctions or rulemaking, or both, were necessary: (1)

regulation of the pari-mutuel wagering pool; (2) regulation relative to the

collection of taxes; and (3) regulation of the administration of medicines and

drugs to racing animals.

8. Fifty-four emergency rules, designated 7EER92-1 through 7EER92-54, were

promulgated on or about August 24, 1992. (These compare to the 340 rules

previously promulgated under the authority of, and to implement, the entirety of

Chapter 550, Fla. Stat. (1991), in effect before July 1, 1992.) In addition,

the Division requested that the tracks and frontons promulgate "in-house" rules

in an attempt to maintain, as a practical matter, the status quo as of June 30,

1992, to the extent possible. On or about November 22, 1992, the emergency

rules were replaced by permanent rules, designated F.A.C. Rule Chapter 7E-16,

and F.A.C. Rule Chapter 7E-4 was repealed.

9. On or about December 16, 1992, the Legislature enacted Chapter 92-348,

Laws of Florida (1992), a new comprehensive statute governing dog and horse

racing pari-mutuel wagering. It replaced the prior law.

10. The final bill analysis and economic impact statement produced by the

House of Representatives Committee on Regulated Industries referred to Chapter

92-348 as a "revision" of the law on the subject.

11. The Division suggested to the Senate Commerce Committee that an

earlier Senate version of the bill contain a retroactive "savings clause" to

specify that the Division would have jurisdiction to prosecute disciplinary

proceedings against occupational licensees that were pending on July 1, 1992,

under the Division's emergency rules and under the provisions of what would

become Chapter 92-348. No such provision was included in Chapter 92-348.

12. On or about December 17, 1992, the Division transmitted to the

Department of State, Bureau of Administrative Code, as "technical changes" under

F.A.C. Rule 1S-1.002(9), "corrections" to the statutory authority for, and law

implemented by, F.A.C. Rule Chapter 7E-16. The "corrections" substituted

appropriate provisions from Chapter 92-348.

13. The Division interprets F.A.C. Rule 1S-1.002(9) to apply to changes in

the statutory authority for, and law implemented by, rules.

14. F.A.C. Rule Chapter 7E-16 later was redesignated as F.A.C. Rule

Chapter 61D-1.

15. Between July 1 and December 16, 1992, the Division issued some 11,000

occupational licenses and denied some 22 applications. During this time period,

the Division collected some $400,000 in occupational license fees. The fees

were part of the more than $800,000 collected in the fiscal year ending June 30,

1993.

16. During the period from July 1 to December 16, 1992, the Division

dismissed more than 80 pending disciplinary matters out of concern for whether

the Division still had authority to impose sanctions for the violations in

question. In addition, during that time period, out of the same concerns, the

Division declined to prosecute more than 260 other cases in which track judges

or stewards had found violations.

CONCLUSIONS OF LAW

A. History of Pertinent Statutory and Rule Changes.

17. Prior to July 1, 1992, F.A.C. Rules 7E-4.024(18) and 7E-4.031 were

some of the existing rules that had been promulgated by the Division of Pari-

mutuel Wagering of the Department of Business Regulation (the Division) under

Chapter 550, Fla. Stat. (1991), governing dog and horse racing pari-mutuel

wagering.

18. F.A.C. Rule 7E-4.024(6) provided: "No person shall conspire with any

other person for the commission of, or connive with any other person in any

corrupt or fraudulent practice in relation to racing nor shall he commit such an

act on his own account." It recited that it was promulgated under the authority

of Section 550.02(3) of the Florida Statutes for purposes of implementing

Sections 120.57, 120.58, 120.60, 550.02 and 550.24 of the Florida Statutes.

Section 550.02(3)(a) gave the Division rulemaking authority generally "for the

control, supervision, and direction of all applicants, permittees, and licensees

and for the holding, conducting, and operating of all racetracks, race meets,

and races held in this state . . .." Section 550.24 made it a crime for any

person to influence or have any understanding or connivance with any person

associated with or interested in the conduct of dog or horse racing pari-mutuel

wagering to prearrange or predetermine the results of any race, including

through administration of medication or drugs to a race animal or conspiracy to

administer medication or drugs to a race animal.

19. F.A.C. Rule 7E-4.031 set out a comprehensive scheme for the issuance

and regulation of occupational licenses for persons connected with racetracks.

It recited that it was promulgated under the authority of Section 550.02(3) of

the Florida Statutes for purposes of implementing Sections 550.02 and 550.10 of

the Florida Statutes. Section 550.02 is described in the preceding paragraph.

Section 550.10 required that every person connected with a racetrack purchase

from the Division an occupational license, provided for occupational license

fees, and authorized the Division to "deny, suspend, revoke, or place conditions

or restrictions on any occupational license" for, among other things, violation

of the provisions of chapter 550 or 551 of the Florida Statutes "or the rules

and regulations of the division governing the conduct of persons connected with

the racetracks."

20. Section 30 of Chapter 91-197, Laws of Florida (1991), repealed

numerous sections of Chapter 550, Fla. Stat. (1991), governing dog and horse

racing pari-mutuel wagering, including Sections 550.02 and 550.10, effective

July 1, 1992.

21. Among the provisions of Chapter 550 that remained in effect after the

Chapter 91-197 repeal took effect on July 1, 1992, were: parts of Section

550.09, providing for the assessment and payment of daily license fees and taxes

on persons engaged in the business of conducting race meetings; Sections

550.13, 550.131 and 550.14, providing for the division and distribution of

monies derived under what was left of the pari-mutuel wagering law; parts of

Section 550.16, authorizing and regulating the sale of tickets or other

evidences showing an interest in or a contribution to a pari-mutuel pool;

Section 550.24, making it a crime for any person to influence or have any

understanding or connivance with any person associated with or interested in the

conduct of dog or horse racing pari-mutuel wagering to prearrange or

predetermine the results of any race, including through administration of

medication or drugs to a race animal or conspiracy to administer medication or

drugs to a race animal; Section 550.2405, prohibiting the use of a controlled

substance or alcohol by "any occupational licensees officiating at or

participating in a race" and requiring occupational licensees to consent to

submission to certain breath, blood and urine tests for the purpose of detecting

a violation of the prohibition; Section 550.241, prohibiting the racing of

animals with any drug, medication, stimulant, depressant, hypnotic, narcotic,

local anesthetic, or drug-masking agent and authorizing both administrative

action against licensees, including occupational licensees, who violate the

statute and rulemaking to implement the statute; and Section 550.361,

prohibiting bookmaking on the grounds or property of a permitholder of a dog or

horse race track and denying persons convicted of bookmaking from entering such

a track's premises. In addition, Section 120.633, Fla. Stat. (1991), remained

in force and effect, exempting the proceedings of track stewards, judges, and

boards of judges from the hearing and notice requirements of Chapter 120, Fla.

Stat. (1991), when they hold hearings for the purpose of imposing fines or

suspensions for violations of certain Division rules, including those:

prohibiting interference with races; prohibiting the drugging or medicating of

race animals; prohibiting the possession of paraphernalia that could be used for

the prohibited drugging or medicating of race animals; and prohibiting

prearranging the outcome of any race.

22. On or about August 24, 1992, the Division promulgated emergency rules

governing dog and horse racing pari-mutuel wagering under what was left of

Chapter 550. They included 7EER92-2(18) and 7EER92-6.

23. 7EER92-2(18) provided: "No person shall conspire with any other

person for the commission of, or connive with any other person in any corrupt or

fraudulent practice in relation to racing or jai alai nor shall he commit such

an act on his own account." Except for the addition of the reference to jai

alai, 7EER92-2(18) is the same as F.A.C. Rule 7E-4.024(6).

24. 7EER92-6 set out a comprehensive scheme for the issuance and

regulation of occupational licenses for persons connected with racetracks. It

validated occupational licenses issued prior to the promulgation of the

emergency rules, and its fee structure for occupational licenses was the same as

what was in the repealed Section 550.10, Fla. Stat. (1991).

25. Both emergency rules stated that they were promulgated under the

authority of, and to implement, Sections 120.633, 550.16(1), and 550.241 of the

Florida Statutes. 7EER92-6 stated that it also implemented the other

subsections of Section 550.16.

26. Other emergency rules also were promulgated specifically to implement

Sections 120.633, 550.16(1), and 550.241 of the Florida Statutes. Section

120.633 was specifically implemented by 7EER92-4. Section 550.16(1) was

specifically implemented by 7EER92-31 and 7EER92-33 through 7EER92-37. Section

550.241 was specifically implemented by 7EER92-7 through 7EER92-9.

27. On or about November 22, 1992, the Division simultaneously repealed

F.A.C. Rule Chapter 7E-4, including Rules 7E-4.024(6) and 7E-4.031, and

promulgated F.A.C. Rules 7E-16.001 through 7E-16.004 and 7E-16.006 through 7E-

16.054. The old rules were repealed "because the statutory authority for the

rules was repealed during the last Legislative session." F.A.C. Rule 7E-

16.002(18) is identical to emergency rule 7EER92-2(18). Like emergency rule

7EER92-6, F.A.C. Rule 7E-16.006 sets out a comprehensive scheme for the issuance

and regulation of occupational licenses for persons connected with racetracks

and is virtually identical to the emergency rule. It also validated

occupational licenses issued prior to the promulgation of the emergency rules,

and its fee structure for occupational licenses was the same as what was in the

repealed Section 550.10, Fla. Stat. (1991).

28. Like the emergency rules they mimic, both F.A.C. Rules 7E-16.002(18)

and 7E-16.006 state that they are promulgated under the authority of, and to

implement, Sections 120.633, 550.16(1), and 550.241 of the Florida Statutes, and

F.A.C. Rule 7E-16.006 states that it also implements the other subsections of

Section 550.16.

29. As with the emergency rules, F.A.C. Rule Chapter 7E-16 rules also were

promulgated specifically to implement Sections 120.633, 550.16(1), and 550.241

of the Florida Statutes. Section 120.633 was specifically implemented by F.A.C.

Rule 7E-16.004. Section 550.16(1) was specifically implemented by F.A.C. Rules

7E-16.031 and 7E-16.033 through 7E-16.037. Section 550.241 was specifically

implemented by 7E-16.007 through 7E-16.009.

30. On or about December 16, 1992, the Legislature enacted Chapter 92-348,

Laws of Florida (1992), governing dog and horse racing pari-mutuel wagering.

31. Section 7 of Chapter 92-348 created a Section 550.0251 of the Florida

Statutes. Like Section 550.02, Fla. Stat. (1991), the new law gave the Division

rulemaking authority generally "for the control, supervision, and direction of

all applicants, permittees, and licensees and for the holding, conducting, and

operating of all racetracks, race meets, and races held in this state . . .."

At the same time, Section 67 purported to again repeal Section 550.02, Fla.

Stat. (1991).

32. Section 16 of Chapter 92-348 created a new Section 550.105 of the

Florida Statutes. Like Section 550.10, Fla. Stat. (1991), Section 16 of the new

law required that each person connected with a racetrack purchase from the

Division an occupational license, provided for occupational license fees, and

authorized the Division to "deny, suspend, revoke, or place conditions or

restrictions on any occupational license" for violation of the statutes, or the

rules and regulations of the Division "governing the conduct of persons

connected with racetracks." At the same time, Section 67 of the new law

purported to again repeal Section 550.10, Fla. Stat. (1991).

33. Although the new Section 550.105, Fla. Stat. (Supp. 1992), was quite

similar to the repealed Section 550.10, Fla. Stat. (1991), the two statutes

differ in some respects. Under the new statute, the licensing scheme

established a new category of restricted occupational licenses for persons not

having access to certain specified areas of a track, including the mutuels or

money room and the "backside" where the racing animals are kept. With the new

licensing scheme came some new and different occupational license taxes.

However, the Petitioner's license would remain an unrestricted license, as

before the statutory changes, and the occupational license fee for it would

remain the same.

34. Section 67 of Chapter 92-348 also repealed Sections 550.16 and

550.241, Fla. Stat. (1991).

35. On or about December 17, 1992, the Division filed a list of "technical

changes" to be made to F.A.C. Rules 7E-16.002 through 7E-16.054 "to correct the

Specific Authority and Law Implemented sections of these rules." The list

changed the "Specific Authority" for F.A.C. Rule 7E-16.002 to Sections 120.633,

550.0251 and 550.155, Florida Statutes, and the "Law Implemented" to Sections

550.0251, 550.0425, 550.235, 550.24055, and 550.2415, Florida Statutes. The

list also changed the "Specific Authority" for F.A.C. Rule 7E-16.006 to Sections

550.0251 and 550.155, Florida Statutes, and the "Law Implemented" to Section

550.105, Florida Statutes.

36. Later, the F.A.C. Rule Chapter 7E-16 was recodified as F.A.C. Rule

Chapter 61D-1.

B. Standing.

37. In rule challenges such as these, the Petitioner has the burden of

proving that he has "standing." See Dept. of Health and Rehabilitative Services

v. Alice P., 367 So. 2d 1045, 1052 (Fla. 1st DCA 1979).

38. The Division concedes the Petitioner's standing to challenge emergency

rule 7EER92-2(18) and F.A.C. Rule 61D-1.002(18) (formerly F.A.C. 7E-16.002(18))

but contends that the Petitioner has no standing to challenge emergency rule

7EER92-6 and F.A.C. Rule 61D-1.006 (formerly F.A.C. 7E-16.006). The Division's

argument is that the Petitioner has not proven "injury in fact." See, e.g.,

Prof. Fire Fighters of Florida, Inc., et al., v. Dept. of Health and

Rehabilitative Services, 396 So. 2d 1194 (Fla. 1st DCA 1981). The Division

argues that the pari-mutuel occupational licensing scheme in the Division's

emergency rule 7EER92-6 and F.A.C. Rule 61D-1.006 (formerly F.A.C. 7E-16.006) do

not, in and of themselves, cause any "injury" to the Petitioner and that they do

not embody changes in the licensing scheme which are more "injurious" than the

licensing scheme under the former rules. (The Division argues that the

licensing scheme in the rules being challenged does not make any changes that

will affect the Petitioner and that, to the contrary, by recognizing the

validity of the Petitioner's license, it saves him occupational licensing fees

he otherwise would have to pay for a new license.) Essentially, the same

arguments form the bases of the Division's prehearing "Motion to Dismiss

Challenge to Rule 7EER92.6 and 7E-16.006," ruling on which was reserved, and a

posthearing "Motion for Partial Summary Final Order."

39. Notwithstanding the Division's arguments, and the language in some of

the decisional law on which it is based, it is concluded that a person who is

subject to a licensing scheme, such as the pari-mutuel occupational licensing

scheme in the Division's emergency rule 7EER92-6 and F.A.C. Rule 61D-1.006

(formerly F.A.C. 7E-16.006), has standing to challenge the validity of the

rules. So long as the rules apply to the person, it is not necessary to prove

any more of an "injury in fact," and it is not necessary to prove that the rules

embody changes in the licensing scheme which are more "injurious" than the

licensing scheme under the former rules. It is concluded that the Petitioner

has standing to challenge the rules to which he is subject, and the Division's

motions arguing to the contrary are denied.

40. On the other hand, a person whose standing comes from being subject to

a licensing scheme does not have standing to challenge the validity of rules to

which he is not subject. While the Petitioner has standing to challenge the

rules that apply to the occupational license to which he is subject, he does not

have standing to challenge rules that do not apply to him.

C. Challenge to 7EER92-6 is Moot.

41. Under Section 120.54(9)(c), Fla. Stat. (1993), emergency rules are

effective for a maximum of 90 days. 7EER92-6 has expired and has been replaced

by permanent rules. The current rules set out the licensing scheme now in

effect. The Petitioner's challenge to 7ERR92-6 is moot. (The only reason the

challenge to 7EER92-2(18) is not also moot is that the Petitioner has been

charged with having violated it during the time it was still effective.)

D. Burden of Proof in Rule Challenges.

42. In rule challenges such as these, the Petitioner has the burden of

proving that the challenged rules are invalid. See Austin v. Dept. of Health

and Rehabilitative Services, 495 So. 2d 777 (Fla. 1st DCA 1986).

E. Statutory Tests for Validity.

43. Section 120.56, Fla. Stat. (1993), provides for administrative

challenges to agency rules on the ground that they are invalid exercises of

delegated legislative authority. Section 120.52(8), Fla. Stat. (1993),

provides:

"Invalid exercise of delegated legislative

authority" means action which goes beyond the

powers, functions, and duties delegated by

the Legislature. A proposed or existing rule

is an invalid exercise of delegated

legislative authority if any one or more of

the following apply:

(a) The agency has materially failed to

follow the applicable rulemaking procedures

set forth in s. 120.54;

(b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(7);

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required by

s. 120.54(7);

(d) The rule is vague, fails to establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency; or

(e) The rule is arbitrary or capricious.

Application of Section 120.52(8) to the peculiar circumstances of this case

requires that the statutory rulemaking authority for, and law implemented by,

the rules be ascertained.

F. Chapter 92-348 as Authority and Law Implemented.

44. One of the Division's arguments is that appropriate citations from

Chapter 92-348 serve as the statutory authority for, and law implemented by, the

challenged rules. Logically, this argument only can apply to F.A.C. Rules 61D-

1.002(18) [formerly 7E-16.002(18)] and 61D-1.006 [formerly 7E-16.006], since the

emergency rules already had expired by the time of the enactment of Chapter 92-

348.

45. On or about December 17, 1992, the Division transmitted to the

Department of State, Bureau of Administrative Code, as "technical changes" under

F.A.C. Rule 1S-1.002(9), "corrections" to the statutory authority for, and law

implemented by, F.A.C. Rule Chapter 7E-16. The Division argues that the

"corrections" substituted the Chapter 92-348 provisions for the remnants of

Chapter 550, Fla. Stat. (1991), left after the July 1, 1992, effective date of

the repeals enacted in Chapter 91-197, Laws of Florida (1991), that previously

were cited as the statutory authority for, and law implemented by, the

challenged rules.

46. The Petitioner argues that the substitution of the Chapter 92-348

provisions for the remnants of Chapter 550, Fla. Stat. (1991), as the statutory

authority for, and law implemented by, the challenged rules was improper under

F.A.C. Rule 1S-1.002(9).

47. F.A.C. Rule 1S-1.002(9) provides:

Technical changes such as non-substantive

changes, punctuation, misspellings,

corrections of tense, change of address or

telephone number, or similar changes which do

not affect the construction or meaning of the

rules, may be accomplished by writing a

letter to the Bureau of Administrative Code.

Such changes do not require notification in

the Florida Administrative Weekly.

(Emphasis added.)

48. The Petitioner did not introduce any evidence of an agency

interpretation of the underlined language of F.A.C. Rule 1S-1.002(9)--either an

interpretation by the Division or by the Department of State--that would support

its contention that F.A.C. Rule 1S-1.002(9) does not apply to changes in the

statutory authority for, and law implemented by, the challenged rules. To the

contrary, the facts demontrate that the Division interprets F.A.C. Rule 1S-

1.002(9) to apply to changes in the statutory authority for, and law implemented

by, rules. In addition, the absence of any evidence that the Department of

State, Bureau of Administrative Code, objected to the Division's technical

changes could suggest that the Department of State's interpretation of F.A.C.

Rule 1S-1.002(9) is in accord with the Division's.

49. The Petitioner argues that, notwithstanding the Division or even the

Department of State interpretation of F.A.C. Rule 1S-1.002(9), the substituted

Chapter 92-348 provisions cannot stand as the statutory authority for, and law

implemented by, at least some of the rules because they are inconsistent with

the rules in some respects, to wit: (1) F.A.C. Rule 61D-1.001 [formerly 7E-

16.001] states that it implements Chapter 550, as amended by Chapter 91-197,

Laws of Florida (1991), as effective July 1, 1992; (2) F.A.C. Rule 61D-

1.006(1)(b) [formerly 7E-16.006(1)(b)] provides that "[p]ari-mutuel occupational

licenses issued pursuant to this rule shall only be valid until the expiration

of this emergency rule"; (3) F.A.C. Rule 61D-1.006(1)(c) [formerly 7E-

16.006(1)(c)] provides for some occupational license taxes that significantly

differ from those in Chapter 92-348; and (4) Chapter 92-348 also contains a new

category of restricted occupational licenses and some license taxes that either

are not addressed or covered in the rules or are inconsistent with the taxes set

out in the rules.

50. As for discrepancies (3) and (4), they relate to occupational licenses

to which the Petitioner is not subject. As explained in the section "A.

Standing"of these Conclusions of Law, supra, the Petitioner has no standing to

challenge those rules. In substance, the license and tax applicable to the

Petitioner is not changed.

51. As for discrepancies (1) and (2), the Petitioner correctly points out

that the change of statutory authority and law implemented affects the

construction or meaning of those particular rules and that F.A.C. Rule 1S-

1.002(9) does not authorize the purported "technical changes" to the statutory

authority for, and law implemented by, those rules.

52. The Petitioner can point to no other rules whose construction or

meaning are changed as a result of the change of statutory authority and law

implemented. It is concluded that, except for F.A.C. Rules 61D-1.001 [formerly

7E-16.001] and 61D-1.006(1)(b) [formerly 7E-16.006(1)(b)], changes in the

statutory authority for, and law implemented by, rules "do not affect the

construction or meaning of the rules," and they would be considered "technical

changes" under F.A.C. Rule 1S-1.002(9). The substituted provisions from Chapter

92-348 are sufficient to serve as the statutory authority for, and law

implemented by, the rest of F.A.C. Rule Chapter 61D-1 [formerly 7E-16].

G. Repeal and Re-enactment Argument.

53. Another of the Division's arguments is in effect that the enactment of

Chapter 92-348, Laws of Florida (1992), revived the portions of Chapter 550,

Fla. Stat. (1991), that were repealed on the July 1, 1992, effective date of

Chapter 91-197, Laws of Florida (1991). According to this argument, having been

revived, they can again serve as the statutory authority for, and law

implemented by, existing F.A.C. Rules 61D-1.002(18) [formerly 7E-16.002(18)] and

61D-1.006 [formerly 7E-16.006], as well as the emergency rules.

54. The repeal and re-enactment argument is based on case law such as:

McKibben v. Mallory, 293 So. 2d 48 (Fla. 1974); Solloway v. Dept. of Prof. Reg.,

421 So. 2d 573 (Fla. 3d DCA 1982); and Goldenberg v. Dome Condominium Ass'n, 376

So. 2d 37 (Fla. 3d DCA 1979). But it is concluded that those decisions are not

applicable to this case. They address the amendment of a statute by the

simultaneous repeal of former statutory provisions and the re-enactment of a

new, comprehensive statute incorporating the amendments. They hold essentially

that, when such a simultaneous repeal and re-enactment neither specifies that

the new statute shall have retroactive effect nor specifies that rights accruing

under the former version of the statute (before the repeal and re-enactment) are

extinguished, the Legislature is deemed to have intended for the reenacted

provisions to remain in effect continuously and for rights accruing prior to the

repeal and re-enactment to be fixed and preserved under the former version of

the statute.

55. In this case, there is no question as to the Legislative intent under

Chapter 91-197, Laws of Florida (1991). The Legislature clearly intended for

the statutory repeals to take effect on July 1, 1992. Had the Legislature re-

enacted the repealed provisions, with or without amendments, by July 1, 1992,

simultaneous repeal and re-enactment could have been argued. Instead, the

repeals took effect without any simultaneous re-enactment.

56. There are indications that the Legislature, in enacting Chapter 92-

348, Laws of Florida (1992), considered it to be both a "revision" and a

"reenactment" of Chapter 550, Fla. Stat. (1991). Chapter 92-348 also purported

to re-repeal the provisions already repealed effective July 1, 1992. But it is

concluded that those actions are not sufficient to establish the Legislature's

intent to re-enact the repealed portions of Chapter 550 retroactive to July 1,

1992.

57. In addition to the inapplicability of the "simultaneous repeal and re-

enactment" principle, the Division ignores other facts which undermine its

argument. First, none of the rules in question cite to the repealed portions of

Chapter 550, Fla. Stat. (1991), as their statutory authority or as the law

implemented by them, as required by Section 120.54(7), Fla. Stat. (1993).

Second, as to F.A.C. Rule Chapter 61D-1 [formerly 7E-16], the "technical

changes" substituted provisions from Chapter 92-348 as the statutory authority

for, and law implemented by, the rules, to the extent that F.A.C. Rule 1S-

1.002(9) applies.

H. Remnants of Chapter 550, Fla. Stat. (1991)

as Authority and Law Implemented.

58. As set out previously in these Conclusions of Law, the Division cannot

resort either to Chapter 92-348 or to the provisions of Chapter 550, Fla. Stat.

(1991), that were repealed by Chapter 91-197, Laws of Florida (1991), effective

July 1, 1992, as the statutory authority for, and law implemented by, either:

(1) F.A.C. Rule 61D-1.001 [formerly 7E-16.001], stating that it implements

Chapter 550, as amended by Chapter 91-197, Laws of Florida (1991), as effective

July 1, 1992; (2) F.A.C. Rule 61D-1.006(1)(b) [formerly 7E-16.006(1)(b)],

providing that "[p]ari-mutuel occupational licenses issued pursuant to this rule

shall only be valid until the expiration of this emergency rule"; or (3)

emergency rule 7ERR92-2(18). For those rules, it must be determined whether the

remnants of Chapter 550, Fla. Stat. (1991), after the July 1, 1992, effective

date of the repeals enacted in Chapter 91-197 are sufficient to serve that

purpose.

59. After the repeals, the general rulemaking authority in Section

550.02(3)(a), Fla. Stat. (1991), was gone. So was the specific authority in

Section 550.10, Fla. Stat. (1991), for the Division to issue and regulate

occupational licenses. But, as was held in Fairfield Communities v. Florida

Land and Water Adjudicatory Comm'n, 522 So. 2d 1012, 1014 (Fla. 1st DCA 1988):

While it is true that no agency has inherent

rulemaking authority, and any rulemaking

authority which the legislature may validly

delegate to the administrative agency is

limited by the statute conferring the power,

rulemaking authority may be implied to the

extent necessary to properly implement a

statute governing the agency's statutory

duties and responsibilities. Department of

Professional Regulation, Board of

Professional Engineers v. Florida Society of

Professional Land Surveyors, 475 So. 2d 939

(Fla. 1st DCA 1985).

It is concluded that, to the extent that the Division cannot resort to either

Chapter 92-348 or the provisions of Chapter 550, Fla. Stat. (1991), that were

repealed by Chapter 91-197, Laws of Florida (1991), effective July 1, 1992, the

necessary authority for the Division's rules can be inferred under the

circumstances of this case.

60. Even after the repeals, the remaining legislation contemplated the

continuation of pari-mutuel wagering. Parts of Section 550.09 remained,

providing for the assessment and payment of daily license fees and taxes on

persons engaged in the business of conducting race meetings. Sections 550.13,

550.131 and 550.14 remained, providing for the division and distribution of

monies derived under what was left of the pari-mutuel wagering law. Parts of

Section 550.16 remained, authorizing and regulating the sale of tickets or other

evidences showing an interest in or a contribution to a pari-mutuel pool.

61. Specific rulemaking authority with respect to occupational licenses

remained in the form of Section 550.241, which prohibited the racing of animals

with any drug, medication, stimulant, depressant, hypnotic, narcotic, local

anesthetic, or drug-masking agent and authorizing both administrative action

against licensees, including occupational licensees, who violate the statute and

rulemaking to implement the statute.

62. There also was another specific reference to occupational licenses in

Section 550.2405, which prohibited the use of a controlled substance or alcohol

by "any occupational licensees officiating at or participating in a race" and

required occupational licensees to consent to submission to certain breath,

blood and urine tests for the purpose of detecting a violation of the

prohibition.

63. While not mentioning occupational licenses, other remnants made it

clear that neither occupational licensees nor anyone else would be permitted to

engage in certain conduct. Section 550.24, Fla. Stat. (1991), made it a crime

for any person to influence or have any understanding or connivance with any

person associated with or interested in the conduct of dog or horse racing pari-

mutuel wagering to prearrange or predetermine the results of any race, including

through administration of medication or drugs to a race animal or conspiracy to

administer medication or drugs to a race animal. Section 550.361, prohibited

bookmaking on the grounds or property of a permitholder of a dog or horse race

track and denying persons convicted of bookmaking from entering such a track's

premises. While specifically addressing the proceedings of track stewards,

judges, and boards of judges, Section 120.633, Fla. Stat. (1991), referenced

their hearings for the purpose of imposing fines or suspensions for violations

of certain Division rules, including those: prohibiting interference with

races; prohibiting the drugging or medicating of race animals; prohibiting the

possession of paraphernalia that could be used for the prohibited drugging or

medicating of race animals; and prohibiting prearranging the outcome of any

race.

64. It is concluded that the authority for F.A.C. Rules 61D-1.001

[formerly 7E-16.001] and 61D-1.006(1)(b) [formerly 7E-16.006(1)(b)], as well as

emergency rule 7EER92-2(18), can be inferred from the foregoing remnants of

Chapter 550 which they implement.

DISPOSITION

Based on the foregoing Findings of Fact and Conclusions of Law: (1) the

Petitioner's challenge to the validity of 7ERR92-6 is dismissed as moot; and (2)

the Petitioner's challenges to 7ERR92-2(18), F.A.C. Rule 61D-1.002(18) [formerly

7E-16.002(18)], and F.A.C. Rule 61D-1.006 [formerly 7E-16.006] are denied, and

those rules are held to be valid.

DONE AND ORDERED this 4th day of February, 1994, in Tallahassee, Florida.

___________________________

J. LAWRENCE JOHNSTON

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the

Division of Administrative Hearings

this 4th day of February, 1994.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6549RX

To comply with the requirements of Section 120.59(2), Fla. Stat. (1991),

the following rulings are made on the parties' proposed findings of fact:

Petitioner's Proposed Findings of Fact.

1.-2. Accepted and incorporated to the extent not subordinate or

unnecessary.

3.-12. Conclusion of law.

13. Accepted and incorporated.

14.-26. Conclusions of law.

27-29. Facts accepted but largely subordinate, unnecessary and conclusion

of law.

30. Accepted and incorporated.

31. Conclusion of law.

32.-33. Argument and conclusion of law.

34. Accepted and incorporated to the extent not subordinate, unnecessary

or conclusion of law.

35. Accepted and incorporated to the extent not subordinate or

unnecessary.

36. Accepted and incorporated.

37.-38. Argument and conclusion of law.

39.-40. Conclusion of law.

41.-42. Argument and conclusion of law.

Respondent's Proposed Findings of Fact.

1. Accepted and incorporated.

2. Conclusion of law.

3. Accepted and incorporated to the extent not subordinate, unnecessary or

conclusion of law.

4. Accepted and incorporated.

5. Last sentence, rejected as contrary to the greater weight of the

evidence. (The press release referred only to "facilities" not parties to the

lawsuit.) Otherwise, accepted and incorporated to the extent not subordinate or

unnecessary.

6.-8. Accepted and incorporated to the extent not subordinate or

unnecessary.

9. First sentence, accepted and incorporated. The second, third and

fourth sentences are rejected as contrary to the greater weight of the evidence.

The rest is accepted and incorporated to the extent not subordinate, unnecessary

or conclusion of law.

10. Generally accepted but largely unnecessary; incorporated to the extent

not subordinate or unnecessary.

11. Accepted and incorporated to the extent not subordinate or

unnecessary.

12.-14. Accepted and incorporated to the extent not subordinate or

unnecessary.

15. Accepted but subordinate and unnecessary.

16. First sentence, accepted but subordinate and unnecessary; the rest,

conclusions of law.

17. Mostly argument and conclusions of law. The facts are accepted but

are subordinate and unnecessary.

18. Facts are rejected as not proven. The rest is rejected as irrelevant

and as argument and conclusion of law. Also unnecessary.

19. Accepted but irrelevant, subordinate and unnecessary.

20. Accepted and incorporated.

COPIES FURNISHED:

Gary R. Rutledge, Esquire

Harold F. X. Purnell, Esquire

Rutledge, Ecenia, Underwood

& Purnell, P.A.

215 South Monroe Street, Suite 420

Post Office Box 551

Tallahassee, Florida 32302-0551

John B. Fretwell, Esquire

Chief Attorney

Joseph M. Helton, Jr., Esquire

Senior Attorney

Department of Business

and Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-1007

George Stuart

Secretary

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Jack McRay, Esquire

Acting General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399-0792

Carroll Webb, Executive Director

Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code

Department of State

The Elliot Building

Talllahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A PARTY WHO IS ADVERSELY AFFECTED BY THIS FINAL ORDER IS ENTITLED TO JUDICIAL

REVIEW PURSUANT TO SECTION 120.68, FLORIDA STATUTES. REVIEW PROCEEDINGS ARE

GOVERNED BY THE FLORIDA RULES OF APPELLATE PROCEDURE. SUCH PROCEEDINGS ARE

COMMENCED BY FILING ONE COPY OF A NOTICE OF APPEAL WITH THE AGENCY CLERK OF THE

DIVISION OF ADMINISTRATIVE HEARINGS AND A SECOND COPY, ACCOMPANIED BY FILING

FEES PRESCRIBED BY LAW, WITH THE DISTRICT COURT OF APPEAL, FIRST DISTRICT, OR

WITH THE DISTRICT COURT OF APPEAL IN THE APPELLATE DISTRICT WHERE THE PARTY

RESIDES. THE NOTICE OF APPEAL MUST BE FILED WITHIN 30 DAYS OF RENDITION OF THE

ORDER TO BE REVIEWED.