02-001617RX Par Gas, Inc., D/B/A 1st Propane Of Bushnell vs. Department Of Agriculture And Consumer Services Status: Closed DOAH Final Order on Thursday, January 23, 2003.

Summary: The rule is valid and promulgates a two-day notice period in the interest of safety in the handling of a volatile substance. The Petition challenging the rule is dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PAR GAS, INC., d/b/a 1ST )

PROPANE OF BUSHNELL, )

)

Petitioner, )

)

vs. ) Case No. 02 - 1617RX

)

DEPARTMENT OF AGRICULTURE AND )

CONSUMER SERVICES, )

)

Respondent. )

)

FINAL ORDER

Administrative Law Judge Don W. Davis of the Division of

Administrative Hearings held a formal hearing in the above -

styled cause on October 28, 2002, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Steven M. Malono, E squire

Pennington, Moore, Willkinson,

Bell & Dunbar, P.A.

Post Office Box 10095

215 South Monroe Street, 2nd Floor

Tallahassee, Florida 32302 - 2095

For Respondent: Dana H. Plummer, Esquire

Department of Agriculture and

Consumer Services

407 South Calhoun Street

Mayo Building, Suite 520

Tallahassee, Florida 32399 - 0800

STATEMENT OF THE ISSUE

The issue is whether the challenged two working day notice

provision of existing Rule 5F - 11.047(1), Flo rida Administrative

Code, constitutes an invalid exercise of delegated legislative

authority as defined in Section 120.52(8), Florida Statutes.

PRELIMINARY STATEMENT

By Petition for the Administrative Determination of

Invalidity of an Existing Rule (Pet ition), Par Gas Inc., d/b/a

1st Propane of Bushnell, (Petitioner) challenged Rule

5F - 11.047(1), Florida Administrative Code (the Rule).

At the final hearing, conducted pursuant to Section

120.56(3), Florida Statutes, Petitioner presented testimon y of

two witnesses and five exhibits. Respondent, Florida Department

of Agriculture and Consumer Services (Department), presented

testimony of four witnesses and 21 exhibits. Official

Recognition was taken of four Department exhibits, as opposed to

evide ntiary admission, and official recognition was also taken

of Chapter 527, Florida Statutes; Chapter 570, Florida Statutes;

Chapter 120, Florida Statutes; and Rule 5F - 11.047, Florida

Administrative Code.

A Transcript of the final hearing was filed on Nove mber 13,

2002. The parties were granted leave to file proposed final

orders within 30 days of the filing of the Transcript. The

parties filed Proposed Final Orders on December 13, 2002.

Proposed Final Orders submitted by the parties have been

reviewed a nd utilized in the preparation of this Final Order.

FINDINGS OF FACT

1. The Department is the state agency charged by law with

regulation of the liquefied petroleum (LP) gas industry.

Sections 570.07(16)(k), 570.07(23), 527.055, and 527.06, Florida

Sta tutes.

2. Petitioner bears the name "1st Propane of Bushnell," a

registered fictitious name of Par - Gas, Inc. Petitioner is a

Category I liquefied petroleum gas distributor, licensed and

regulated by the Department.

3. There are approximately 460 licen sed LP gas dealers in

Florida. Florida’s licensed LP gas dealers include one - man

operations, mom and pop family - owned businesses, regional

marketers and national multi - state marketers. LP gas operations

in Florida are unique compared to other states, in that Florida

has many small volume users.

4. The Department issues the Category I LP gas dealer

license only to entities, not to individuals. The license

permits the licensee gas company to transport LP gas, fill LP

gas containers, sell LP gas containe rs, and to service, install,

or repair appliances or equipment that use LP gas. Most LP gas

dealers own the LP gas tank or cylinder installed at the

customer location. Accordingly, when the dealer delivers LP gas

to its customer, it is filling or refilli ng its own container;

unless the customer owns the container, then the dealer fills

the customer’s container.

5. LP is a by - product of the oil refining process. The

most common LP gas in Florida is propane. LP gas has a boiling

point of minus 44 degrees Fahrenheit. The very cold LP gas is

stored in the container under pressure of approximately 145

pounds per square inch (PSI). 1 LP gas expands approximately 270

times as it changes from a liquid to a vapor. LP gas vapor is

one and one - half times heavier than air.

6. Because LP gas is heavier than air, when released into

the air, LP gas vapor drops, pools and accumulates in low areas.

It will not disperse in areas where there is no wind movement.

A spark from static electricity, electric motors, auto mobile fan

motors, exhaust pipes, catalytic converters, air conditioning

compressors or lit cigarettes will ignite LP gas, causing

explosion or fire. LP gas is more volatile than natural gas.

7. Unlike natural gas which is delivered to the customer

by pi pe, LP gas is typically stored at residential, commercial

or school installations in a pressurized container. Two kinds

of LP gas containers are tanks and cylinders. Other LP gas

system components include the regulator, valves, interior and

exterior pipi ng, meter, and appliances. The National Fire

Protection Association, Standard 58, LP Gas Code 2001 Edition,

("NFPA 58") makes the container owner responsible for ensuring

his containers are suitable and qualified for service.

LP gas tanks are typically ho rizontal and much larger than LP

gas cylinders. Tanks used in residential and commercial

applications, generally range in size up to 1,000 gallons.

Tanks are deemed permanent installations. Cylinders are

generally upright and have a specified lifetime, after which

they must be re - qualified by the owner. Cylinders are deemed

temporary or portable installations. LP gas cylinders and tanks

are both “liquefied petroleum gas equipment” within the meaning

of Chapter 527, Florida Statutes.

8. Rule 5F - 11.04 7, Florida Administrative Code, governs LP

gas container disconnections in Florida. The genesis of Rule

5F - 11.047, Florida Administrative Code, dates back to the 1940’s

and 1950’s and a State Regulation 2 that allowed only the LP gas

tank owner, or those a uthorized by him, to disconnect a tank

from a customer’s system. In 1958, Florida’s Attorney General,

Richard Ervin, became concerned that the Regulation could be

applied in an anti - competitive manner, but in 1959, the

Regulation was amended to allow one gas company to disconnect

another company’s tank whether or not it was authorized,

provided advance notice was given to the gas company owning the

tank. In the 1970’s this “advance notice” concept was continued

and again adopted, this time in an administr ative rule

promulgated under Chapter 120, Florida Statutes. In 1990, The

Department of Insurance (“DOI”) promulgated Rule 4B - 1.008,

Florida Administrative Code, under Chapter 120, Florida

Statutes. 3

9. In 1994, DOI’s Rule 4B - 1.008, Florida Administrati ve

Code, was properly transferred to the Department without

changes. The Department properly filed Rule 5F - 11.047, Florida

Administrative Code, for adoption without changes as required by

Chapter 120, Florida Statutes, and Chapter 1S - 1, Florida

Administra tive Code, effective March 15, 1994.

10. When the Rule was initially adopted in 1990, David

Rogers wrote a letter 4 to DOI on behalf of The Florida Propane

Gas Association (“The Association”) recommending rule language

which became Rule 4B - 1.008, Florida Ad ministrative Code. The

same language lives on in challenged Rule 5F - 11.047(1), Florida

Administrative Code. The Association specifically recommended

the Rule language “in the interest of safety to the propane

industry and consumers” and because the Rule allowed “orderly

disconnects to be made in a safe manner.”

11. As stipulated by the parties at final hearing, Rogers’

October 31, 1990, letter is the Association’s past and present

position on Rule 5F - 11.047(1), Florida Administrative Code.

12. Other s tates have tank disconnect rules similar to

Florida’s Rule, and other states have modeled their disconnect

rules after Florida’s Rule 5F - 11.047(1), Florida Administrative

Code. No company has ever challenged Rule 5F - 11.047(1), Florida

Administrative Code, except Petitioner.

13. Petitioner challenges only the two working day notice

requirement of Rule 5F - 11.047(1), Florida Administrative Code,

alleging it is an invalid exercise of delegated legislative

authority. Section 120.52(8), Florida Statutes. Petit ioner

alleges that the “Department has exceeded its grant of

rulemaking authority because Section 527.06, Florida Statutes,

does not specifically include nor contemplate or require notice

to cylinder, tank and system owners prior to a disconnection;”

that the existing rule enlarges, modifies and contravenes the

specific provisions of Sections 527.06 and 527.07, Florida

Statutes, in that neither statutory provision requires or

authorizes a 48 - hour/two working day pre - disconnection notice to

an LP gas tank or system owner”; that the existing rule is

arbitrary and capricious in that the pre - disconnection notice

requirement has no relation or connection to any health, safety

or welfare concerns; and that the Rule does not promote the

health, safety or welfare of the public and, therefore, cannot

be supported by competent substantial evidence. Petitioner also

alleges that application of the two working day notice

requirement has an anti - competitive effect on the LP gas market.

14. Rule 5F - 11.047(1), Florida Admi nistrative Code,

pertains to disconnecting LP gas containers. No statute

prohibits a person or gas company from disconnecting another gas

company’s LP gas container. However, Section 527.07, Florida

Statutes, prohibits a person or gas company from fillin g,

refilling, using, or delivering another gas company’s LP gas

container without authorization from the gas company that owns

the container. Section 527.07, Florida Statutes, reads:

No person, other than the owner and those

authorized by the owner, shal l sell, fill,

refill, deliver, permit to be delivered, or

use in any manner any liquefied petroleum

gas container or receptacle for any gas or

compound, or for any other purpose.

Section 527.07, Florida Statutes, is one of the statutes

implemented by Ru le 5F - 11.047(1), Florida Administrative Code,

the other being Section 527.06, Florida Statutes. As a

practical matter, when a gas customer wants to change LP gas

companies, his new choice of companies cannot use his existing

gas company’s LP gas container unless authorized by the existing

company, which owns the installed container. So, if the

customer does not own his own container 5 and authorization to use

the existing company’s container is not obtained, the existing

container will have to be disconnec ted so the new company can

install its own container. Section 527.07, Florida Statutes.

15. When one gas company disconnects another gas company’s

container in order to install its own container, it is called a

“switch - out” or “changeover.” Rule 5F - 11.04 7, Florida

Administrative Code, determines when the disconnect notification

must occur. When disconnected, a LP gas container is either

empty (out - of - gas) 6 or it contains LP gas. If the tank is empty,

the tank owner must be notified within 24 hours after the empty

tank has been disconnected. See Rule 5F - 11.047(2), Florida

Administrative Code. Thus, no advance notice is required when

the customer is out - of - gas.

16. However, if the existing container contains gas

(hereinafter referred to as a “gas - fille d container”), 7 Rule

5F - 11.047(1), Florida Administrative Code, requires the new,

incoming gas company to give two working days advance notice to

the existing gas company/tank owner that it intends to

disconnect the existing container after two working d ays.

Rule 5F - 11.047(1), Florida Administrative Code, reads:

(1) No person, firm or corporation, other

than the owner and those authorized by the

owner, shall connect or disconnect any

cylinder, tank, or system containing

liquefied petroleum gas , excep t in an out -

of - gas situation, unless due and sufficient

notice has been give n by any person, firm or

corporation to the owners of any cylinder or

tank, prior to disconnecting or connecting

such cylinder, tank, or system . Due and

sufficient notice shall be received by the

owners at least two (2)working days prior to

installing the cylinder, tank, or system of

said person, firm, or corporation, and shall

be evidenced by a signed receipt.

Acceptable evidence of receipt of

notification shall be a signed certi fied

mail receipt, signed receipt of hand

delivery or facsimile transmission receipt.

If after two working days the cylinder,

tank, or system has not been disconnected by

the owner, the said person, firm or

corporation may then disconnect downstream

of th e system regulator or meter. It shall

be mandatory that the person, firm or

corporation who so disconnects any such

cylinder or tank, whether empty or full,

upon the premises of a consumer, does so in

a manner that renders the cylinder or tank

tight with valves turned off, the cylinder

or tank service valve plugged with brass or

steel fittings, and all other cylinder, tank

or system openings properly plugged. In

addition, any cylinder, tank, or system

disconnected must be done so in a manner

that is in co mpliance with the requirements

of NFPA 58. (Emphasis supplied).

The advance notice requirement only applies to gas - filled

containers.

17. After receiving two working days notice, the existing

company/tank owner has several options: 1) The tank

owner/co mpany can disconnect and remove its gas - filled container

from the property within the two working days; 2) swap

containers with the incoming company, exchanging the existing

container with a similar container delivered to its storage yard

by the incoming c ompany; 3) sell the existing gas - filled

container to the incoming company or the consumer; 4) coordinate

a switch - out with the incoming company; or 5) if it knows and

trusts the safety training of the incoming company’s personnel,

it can authorize the inco ming company to disconnect its tank and

put it in an agreed - upon safe location at the customer property

until it can be picked up in a reasonable time.

18. Disconnecting a gas - filled container is an inherently

dangerous activity even though the person do ing the disconnect

has been properly trained. If the existing gas - filled container

is sold or swapped to the incoming gas company, the inherently

dangerous disconnect is not required. By contrast, after a gas -

filled container is disconnected it must be t emporarily stored

on the customer property if it is not immediately removed.

19. As established by testimony of the Department’s safety

expert even trained persons sometimes store gas - filled

containers on customer property in an unsafe and improper

manne r. Even LP gas companies’ employees are known to violate

the two working day notice requirement leaving another company’s

gas - filled container, unplugged, unprotected hazardous, unsafe

condition on the consumer’s property.

20. The two working day notice requirement of

Rule 5F - 11.047(1), Florida Administrative Code, provides

sufficient time for the two gas companies to work out the

switch - out or terms of transfer. Less than two working days'

notice would not be sufficient to promote the safe han dling of

LP gas and proper installation of LP gas equipment.

21. The Department presented the testimony of a Suburban

Propane (“Suburban”) employee, Tom Ross. Ross is Suburban’s

Florida regional manager. Suburban is a multi - state marketer

and is the third largest propane company in Florida. Suburban’s

29 Florida locations are licensed by the Department and serve

80,000 customers. Suburban has twice as many LP gas containers

in the field in Florida as any other region due largely to the

fact that Fl orida has a lot of small volume users.

22. Ross testified that training of personnel to perform

disconnect varies, some companies providing better training than

others. Suburban prefers to disconnect its own gas - filled tanks

primarily because it knows t he training its employees have

received, and has no idea what kind of training a competitor

company’s personnel may have received.

23. Ross testified that as it relates to Suburban,

Rule 5F - 11.047(1), Florida Administrative Code, promotes the

safe ha ndling of propane gas. The two working day notice

requirement gives Suburban the opportunity to evaluate the

safety/liability of the situation and the potential

safety/liability involved in moving the tank. Safety/liability

issues related to the disconne ct and removal of the gas - filled

tank may make it advantageous for the existing tank owner to

negotiate a tank swap with the company taking over the account.

In that circumstance, no disconnect is required.

24. The Department presented the testimony of Mike

Ivestor. Ivestor is the operations manager of Quality Propane

in Havana, Florida, a small mom - and - pop, independent LP gas

company. Ivestor knows his own employees have been properly

trained, but he cannot be sure how well all his competitors

train t heir employees. Ivestor has a good relationship with

most, but not all, competitors in his market. There are some LP

gas companies Ivestor would not want to disconnect his company’s

tanks. In the past, competitor gas companies have disconnected

Quality Propane tanks and left them on a customer's property in

unsafe condition. Two working days allows Ivestor sufficient

time to coordinate with the incoming gas company a time to

disconnect his tank so as to not interfere with the new

installation or disrupt ing service to the customer. If Ivestor

knows the incoming company, he may authorize it to disconnect

his gas - filled container and temporarily store it in an

agreed - upon place at the customer property which Ivestor knows

is safe.

25. Ivestor is conce rned about his company’s liability

when he has no control over who, when, or how his gas - filled

tank is disconnected and set aside. Petitioner and the

Department stipulated that if one gas company disconnects

another company’s gas - filled container and rel ocates it on the

customer’s property, it creates liability for the owner of the

container. Rule 5F - 11.047, Florida Administrative Code, is a

safety rule, not a rule that regulates competitiveness.

Further, the two working days' notice promotes proper

ins tallation and transporting of LP gas equipment.

26. Rule 5F - 11.047, Florida Administrative Code, states

that it implements Section 527.06, Florida Statutes. The

Florida Legislature provided in Section 527.06(1), Florida

Statutes, that:

The department ma y adopt rules necessary to

effectuate any of the statutory duties of

the department in the interest of public

health, safety, and welfare and to promote

the safe handling of liquefied petroleum gas

and proper installation, storing, selling,

utilizing, tran sporting, servicing, testing,

repairing, and maintaining of liquefied

petroleum gas equipment and systems. The

department shall adopt rules reasonably

necessary to assure the competence of

persons to safely engage in the business of

liquefied petroleum ga s, including, but not

limited to, the licensure, testing, and

qualifying of such persons for the

protection of the health, welfare, and

safety of the public and persons using such

materials. These rules shall be in

substantial conformity with generally

ac cepted standards of safety concerning the

same subject matter and shall not extend,

modify, or conflict with any laws of this

state or the reasonable implications of such

laws.”

27. The Florida Legislature also provided in

Section 527.06(2), Florid a Statutes that:

(2) The department shall promulgate and

enforce rules setting forth minimum general

standards covering the design, construction,

location, installation, and operation of

equipment for storing; handling;

transporting by tank truck, tank tr ailer, or

pipeline; and utilizing liquefied petroleum

gases and specifying the odorization of such

gases and the degree thereof. The rules

shall be such as are reasonably necessary

for the protection of the health, welfare,

and safety of the public and pe rsons using

such materials and shall be in substantial

conformity with the generally accepted

standards of safety concerning the same

subject matter.

28. Petitioner and the Department each presented testimony

of Vicki O’Neil in their respective case - in - chief. Ms. O’Neil

has been Bureau Chief of the Bureau of LP Gas Inspection since

August 1994. She oversees Bureau licensing, training,

investigations, examinations, and the marketing assessment

program.

29. Ms. O’Neil testified that the Department’s

in terpretation of Section 527.06(1), Florida Statutes, is that

the Department may take reasonable steps necessary to ensure the

public’s safety through the rule - making process, and that the

safe handling of LP gas is in the interest of the public health,

saf ety, and welfare. This has been the Department’s

interpretation of Section 527.06, Florida Statutes, since 1994

when responsibility for LP gas regulation was transferred from

the DOI to the Department, along with Ms. O’Neil.

30. As established by Ms. O’ Neil's testimony, the

Department’s policy is that proper installation, storing,

selling, utilizing, transporting, servicing, testing, repairing,

and maintaining of LP gas equipment and systems is in the

interest of the public health, safety, and welfare an d that

Rule 5F - 11.047, Florida Administrative Code, is an exercise of

the Department’s power and duty to promote those public

interests. The Department’s policy is that Rule 5F - 11.047(1),

Florida Administrative Code, is a safety rule necessary to

promote the safe handling of LP gas.

31. Rule 5F - 11.047(1), Florida Administrative Code, is a

safety rule, which is in substantial conformity with the

published standards of the National Fire Protection Association

and is also in substantial conformity with gener ally accepted

standards of safety.

32. As a result of the two working day notice requirement,

the incoming and outgoing LP gas companies can dialogue about

the proposed disconnection, repairs, safety, or hazardous

conditions that might exist. The dialog ue may also result in

the two companies swapping tanks; thus, the inherently dangerous

process of disconnecting the tank is avoided altogether.

33. In light of recent terrorist events in this country,

law enforcement has taken a heightened interest in LP g as and

gas - filled LP gas containers. Security bulletins from various

federal agencies, including the U.S. Department of

Transportation, show the potential for terrorist groups to

target commercial LP gas tanks and hazardous material storage

facilities . There is a potential for theft of even small

quantities of these materials for the purpose of making weapons

of mass destruction.

34. Each Category I LP gas dealer must have one “master

qualifier” at each business location. Each Category I LP gas

deale r must also have one “qualifier” for each 10 employees

performing LP gas work. A gas company employee does not have to

be a qualifier or a master qualifier to connect or disconnect LP

gas containers for the company.

35. Any gas company employee can disc onnect gas - filled

containers if he or she has been trained by the gas company to

do so. These employees are not required to receive training or

testing from the Department. The gas company must only document

employee training in their company files. The Department

generally does not know if a company employee is actually

performing disconnects correctly or not, nor whether the

employee has ever been disciplined by the employer for safety

violations.

36. The quality of employee training varies from compan y

to company. For this reason, some LP gas companies prefer to

have their own trained employees disconnect their tanks. Even

though companies train their employees, some have been known to

leave disconnected gas - filled containers in unsafe, hazardous

con dition on a customer’s property.

37. As established by testimony of Ernest Barany, an

employee of the Department within the Department’s Bureau of LP

Gas Inspection for seven years and current supervisor of the

Department’s LP gas inspectors, the Rule’s two working day

notice requirement applies to LP gas containers in residential

and commercial locations, LP gas dispensers, and containers

installed in school facilities. Further, the two working day

notice requirement of the Rule promotes public safety a nd the

safe handling of LP gas. The two working day notice requirement

of the Rule promotes the proper installation, storage, selling,

and transporting of LP gas equipment.

38. A customer’s existing gas company usually has superior

knowledge of safety c onditions at the LP gas installation

because it installed the container and/or the entire LP gas

system; has been delivering LP gas into the container; has

maintained and/or repaired the system; and knows about any

"red - tag" situations that exist on the LP gas system.

39. In the LP gas industry, a red tag is a warning of an

unsafe or hazardous condition in a LP gas system. The red tag

is a paper tag hung by a wire from the tank cover or an

appliance or other system component to warn all persons who see

it that there is a problem or unsafe condition in the system.

40. A gas company/tank owner will red - tag its LP gas

container, appliance, or other system component when a temporary

repair has been made or when the gas company knows of a defect

in the sys tem. A common temporary repair requiring a red tag is

when the on - and - off valve leaks gas that can be detected at the

threads between the handle and the body of the valve. The leak

can be temporarily stopped by fully opening the valve and then

with hand pressure turning the valve counterclockwise a little

harder. A red tag would then be put on the tank saying "don’t

refill until a permanent repair is made." Next, when the tank

goes empty the repair can either be made on site or by changing

the container on a scheduled basis.

41. Customers sometimes remove a red tag after it is

placed on the system by the current gas company. If the red tag

is removed, the new, incoming LP gas company coming to

disconnect the gas - filled container would not be aware tha t the

system has a problem, defect, or temporary repair unless the

existing gas company/tank owner has informed them. Accidents

have occurred because customers have removed red tags without

the knowledge of the gas company. The two working day notice

req uirement allows the existing company to address safety

matters that are unknown to the incoming company, thus promoting

a safe transfer of gas service.

42. A switch - out or changeover requires more that just

safely disconnecting the gas - filled container . If a gas company

does not disconnect and remove its own gas - filled container, the

gas - filled container must be disconnected and temporarily stored

on the consumer’s property by the new incoming company.

43. A disconnected gas - filled container is more da ngerous

than a disconnected empty container. Gas - filled containers

temporarily stored on the customer’s property present a variety

of safety concerns. If a gas - filled cylinder is disconnected

and stored on its side at the customer location, liquid propan e

coming into contact with the safety valve can cause the valve to

fail and leak. A gas filled cylinder can fall over creating a

hazardous situation if it is punctured, or falls, and begins to

roll or hits a person or vehicle. Failure to comply with

R ule 5F - 11.047(1), has resulted in at least one fatality in

Florida because the tank was stored improperly on the customer

property.

44. Sometimes there is no safe place to temporarily store

a gas - filled container on the customer property. In

metropolitan markets there are unique safety concerns requiring

that a gas - filled container be removed immediately upon

disconnection. In some metropolitan areas there are limited

property lines on residential tanks, underground tanks,

commercial tanks that are stack ed up behind strip malls with no

place to move them, and tanks that are installed around schools

or parks that could be tampered with by children. Without

advance notice the tank owner cannot address these

safe/liability concerns and responsibility for mi shaps fall

squarely on him. The two working day notice requirement gives

the tank owner time to review customer records, evaluate the

situation, and coordinate the disconnection and removal of its

gas - filled tank.

45. Sometimes the terrain makes safe te mporary storage

impossible or immediate removal of the tank required. In flood

plain areas, local ordinances require the container to be

chained or bolted down or bracketed to a wall. Vehicular

traffic conditions at some locations require that a gas - fill ed

container be protected behind a barrier. If the location

requires that the new container be installed behind the existing

barrier, the disconnected gas - filled container may end up stored

in an un - barricaded area.

46. The gas company that owns the exist ing installed

container, has an investment in it, has serviced the customer

location, and often will know whether or not there is a safe

place to temporarily store the disconnected gas - filled container

on the property. Two days' advance notice allows the existing

gas company time to assess the safety situation unique to a

customer location, thus promoting a safe transfer of gas

service.

47. Some LP gas containers are buried underground and must

be excavated so the incoming gas company can install its own

container underground. A crane, back - hoe, or other special

equipment may be required to unearth and move the tank. The

existing tank owner may also have to locate existing utilities

and obtain governmental authorization or permits to excavate the

tank. Some localities require the tank owner to notify local

fire or building officials or apply for permits to move the

container. If the tank is buried, other buried utilities on the

property must be located before excavation.

48. A gas - filled container some times must have the gas

pumped out of it before the tank can be transported on Florida

roads. This usually requires special equipment and two

different kinds of trucks. The existing tank owner also has to

schedule his employees to do the work. The Rule gives the tank

owner the time to work out the logistics and scheduling of

equipment to draw the gas out of the tank before it can be

transported from the consumer’s property.

49. In 1958, Florida’s tank disconnect rule was called LP

Gas Regulation 11, o f the Fire Marshall’s rules. LP Gas

Regulation 11, Circa 1958 reads:

No person, firm or corporation, other than

the owner and those authorized by the owner

so to do, shall connect or disconnect or

transport or carry any means of conveyance

whatsoever, any cylinder or tank containing

Liquefied Petroleum Gas, whether in the

liquid or vapor state.

Thus, in 1958 all disconnects were prohibited unless authorized

by the tank owner. A tank owner could monopolize a customer’s

LP gas system by simply withholding authorization for the

disconnect. The Insurance Commissioner at the time asked for an

opinion from the Attorney General because he was troubled that a

natural gas supplier was disconnecting LP gas containers without

authorization from the owner. Voicing public safety concerns,

the Attorney General opined that:

Serious problems of public safety are

involved in the disconnecting of L.P. gas

cylinders and tanks and the above rule has

its legitimate purpose in insuring public

safety. I am of the opinion tha t this

regulation can be legitimately enforced

against the private utility in question,

however, it must be applied in terms of

public safety and not in such a manner as

will unreasonably restrict competition.

50. Acknowledging the serious public safety concerns

related to LP gas tank disconnections, Attorney General Ervin

also saw the potential evil of construing Regulation 11 to

prohibit tank disconnections “under any circumstances.”

“Advanced reasonable notice” was the cure. Attorney General

Ervin op ined:

Said rule should not be construed to

prohibit the private utility from

disconnecting the L.P. gas tanks and

cylinder under any circumstances. If after

reasonable notice to the LP gas dealer said

dealer does not disconnect his cylinders or

tanks, the private utility should be

permitted to disconnect them if it does so

in a manner which leaves the tanks or

cylinders in a safe condition. If the

private utility should persist in failing to

give reasonable notice and in leaving the

tanks and cylinders in an unsafe condition,

the State Fire Marshal may hold a

hearing . . . and issue a cease and desist

order.

51. Subsequent to the Attorney General’s July 3, 1958,

Opinion, on February 27, 1959, Regulation 11 was amended after

Public Hearing. The revised, adopted Regulation 11 provided for

“due and sufficient” notice to the tank owner prior to

disconnecting his tank. Thus, in similar fashion to

Rule 5F - 11.047(1), Florida Administrative Code, if the notified

tank owner did not disconnect hi s tank after a reasonable time,

the tank could be disconnected by the company desiring to

install its own tank.

CONCLUSIONS OF LAW

52. The Division of Administrative Hearings has

jurisdiction over the parties in this proceeding pursuant to

Subsections 12 0.56(1) and (3), Florida Statutes.

53. LP gas cylinders and tanks are “liquefied petroleum

gas containers” within the meaning of Section 527.07, Florida

Statutes. LP gas cylinders, tanks or containers are “liquefied

petroleum gas equipment” within the mea ning of Section 527.06,

Florida Statutes.

54. Rule 5F - 11.047, Florida Administrative Code, was

properly renumbered, transferred, and filed for adoption by the

Department effective March 15, 1994, pursuant to the

requirements of Chapter 120, Florida Statute s, and Chapter 1S - 1,

Florida Administrative Code. Adoption of the Rule was not

procedurally infirm.

55. Rule challenge proceedings are conducted pursuant to

Section 120.56, Florida Statutes. Subsection 120.56(3), Florida

Statutes, applies to existing rul e challenge proceedings and, by

contrast, Subsection 120.56(2), Florida Statutes, applies in

proposed rule challenge proceedings. Rule 5F - 11.047(1), Florida

Administrative Code, is an adopted, existing rule, to which

Subsection 120.56(3), Florida Statutes , applies.

56. Because Petitioner is asserting that existing

Rule 5F - 11.047(1), Florida Administrative Code, constitutes an

invalid exercise of delegated authority, Petitioner has the

burden of proving the invalidity of the challenged existing

rule, St. Johns River Water Management District v.

Consolidated - Tomoka Land Company , 717 So. 2d 72 (Fla. 1st DCA

1998), by a preponderance of the evidence. Board of Trustees of

Internal Improvement Trust Fund v. Levy , 656 So. 2d 1359, 1363

(Fla. 1st DCA 1995) .

57. Further, Rule 5F - 11.047(1), Florida Administrative

Code, is presumed valid because it is an existing rule, which

underwent extensive rule promulgation process and review by the

Joint Administrative Procedures Committee (JAPC) in the 1990’s.

Only p roposed rules are neither presumed valid nor invalid.

58. Legislative changes to Chapter 120, Florida Statutes,

in 1996 and 1999 have not removed the presumption of validity

accorded existing rules under the Florida cases. “If an

agency's interpretation of its governing statutes is one of

several permissible interpretations, it must be upheld, despite

existence of reasonable alternatives.” Board of Trustees of the

Internal Improvement Trust Fund v. Levy , 656 So. 2d 1359 (Fla.

1st DCA 1995). “If we are t o regard seriously the incentives

for rulemaking under the APA scheme, and if we are to credit the

deliberative process that the legislature has prescribed for the

development of agency policy, then surely an interpretative rule

emerging from this process should be accorded a most weighty

presumption of validity.” State Department of Rehabilitative

Services v. Framat Realty, Inc. , 407 So. 2d 238, 242 (Fla. 1st

DCA 1981). Hence existing Rule 5F - 11.047, Florida

Administrative Code, is accorded a presumption of validity.

59. Subsection 570.07(23), Florida Statutes, authorizes

the Department to adopt rules pursuant to Sections 120.536(1)

and 120.54, Florida Statutes, to implement provisions of

law - conferring duties upon the Department. Section 527.055 ,

Florida Statutes, grants to the Department authority to

administer and enforce the provisions of Chapter 527, Florida

Statutes, and rules promulgated related thereto.

Subsection 570.07(16)(k), Florida Statutes, grants to the

Department the functio n, power, and duty to enforce the state

laws and rules relating to the sale of liquid fuels.

Section 527.07, Florida Statutes, is a state law related to the

sale of liquid fuels, which the Department has a statutory duty

to enforce.

60. Section 527.07 , Florida Statutes, does not prohibit

one company from disconnecting another company’s gas - filled

tank. 8 However, the statute does force two eventualities when

one gas company plans to sell LP gas to a customer who currently

has another gas company’s cont ainer installed at his home or

business: 1) the new incoming company will either use or fill

the existing gas - filled container with permission from the tank

owner; or 2) the tank must be disconnected because the new

incoming company needs to install his o wn tank.

61. Rule 5F - 11.047(1), Florida Administrative Code,

requires the new incoming gas company proposing to sell gas to

the customer to initiate communication to the existing tank

owner so the eventualities appurtenant to the proposed sale of

gas can be addressed by the tank owner. By contrast, if no

advance notice was required, the gas - filled tank would be

disconnected and stored on the customer’s property, 9 and this

would occur without the tank owner’s knowledge.

62. “The authority to adopt an ad ministrative rule must be

based on an explicit power or duty identified in the enabling

statute. Otherwise, the rule is not a valid exercise of

delegated legislative authority.” Florida Board of Medicine v.

Florida Academy of Cosmetic Surgery, Inc. , 808 So. 2d 243 (Fla.

1st DCA 2002), citing Southwest Florida Water Management

District v. Save the Manatee Club, Inc. , 773 So. 2d 594, 599

(Fla. 1st DCA 2000). “Moreover, the authority for an

administrative rule is not a matter of degree. The question is

w hether the statute contains a specific grant of legislative

authority for the rule, not whether the grant of authority is

specific enough.” Id. This question is one that must be

determined on a case - by - case basis.

63. As authority for Rule 5F - 11.047(1) , Florida

Administrative Code, the Department relied on Section 527.06,

Florida Statutes, which gives the Department rulemaking

authority to “adopt rules necessary to effectuate any of the

statutory duties of the Department in the interest of public

health , safety, and welfare and to promote the safe handling of

liquefied petroleum gas and proper installation, storing,

selling, utilizing, transporting, servicing, testing, repairing,

and maintaining of liquefied petroleum gas equipment and

systems.”

64. Di sconnecting, connecting, and storing a gas - filled

container at a residential, commercial, or public site is

inherently dangerous. See Noack v. B.L. Watters, Inc. , 410

So. 2d 1375 (Fla. 5th DCA 1982), concur Hartford Fire Insurance

Company v. Public Ser vice Commission of Colorado , 676 P.2d 25

(Colo. App. 1983). A disconnected gas - filled container is more

dangerous than a disconnected empty container.

65. Additionally, promoting the safe handling of liquefied

petroleum gas and proper installation, stor ing, selling,

utilizing, transporting, servicing, testing, repairing, and

maintaining of liquefied petroleum gas equipment and systems is

in the interest of the public health, safety, and welfare. The

pre - disconnection notice requirement of Rule 5F - 11.047 (1),

Florida Administrative Code, is directly related to these public

health, safety, or welfare interests.

66. The two working day notice requirement of

Rule 5F - 11.047(1), Florida Administrative Code, falls within the

class of powers and duties delegated to the Department to adopt

rules under Section 527.06, Florida Statutes. The fact that a

Rule falls within the class of powers and duties delegated to an

agency will not alone make the Rule a valid rule. Southwest

Florida Water Management Dist rict v. Save the Manatee Club,

Inc. , 773 So. 2d 594, 599 (Fla. 1st DCA 2000).

67. In addition to being within the general class of

powers and duties delegated to the Department,

Rule 5F - 11.047(1), Florida Administrative Code , implements and

interprets the specific powers and duties identified in

Section 527.06, Florida Statutes, “ to promote the safe handling

of liquefied petroleum gas and proper installation, storing,

selling, utilizing, transporting, servicing, testing, repairing,

and mai ntaining of liquefied petroleum gas equipment and

systems.” Id.

68. "[A]n agency may adopt only rules that implement or

interpret the specific powers and duties granted by the enabling

statute." Section 120.52(8), Florida Statutes. "[I]t is clear

tha t the authority to adopt an administrative rule must be based

on an explicit power or duty identified in the enabling

statute." Southwest Florida Water Management District v. Save

the Manatee Club, Inc. , 773 So. 2d 594, 599 (Fla. 1st DCA 2000).

“A rule t hat is used to implement or carry out a directive will

necessarily contain language more detailed than that used in the

directive itself. Likewise, the use of the term "interpret"

suggests that a rule will be more detailed than the applicable

enabling sta tute. There would be no need for interpretation if

all of the details were contained in the statute itself.” Id.

69. The language in Rule 5F - 11.047(1), Florida

Administrative Code, is more detailed than the language in the

enabling statute. Rule 5F - 11.0 47(1), Florida Administrative

Code, specifies with detail when and under what conditions

notice is required, and how much time in advance notice must be

given. This does not make the Rule invalid. To the contrary,

the notice requirement is a Department directive which

implements the powers and duties identified in Section 527.06,

Florida Statutes. In General Motors Corporation v. Florida

Department of Highway Safety and Motor Vehicles , 625 So. 2d 76

(Fla. 1st DCA 1993), the court affirmed the Administra tive Law

Judge’s order finding that an existing rule, imposing a 12 - month

time period, did not constitute an invalid exercise of delegated

authority. Petitioner did not argue that the time period chosen

by the Department was unreasonable and, therefore, a rbitrary and

capricious. Rather Petitioner argued, unsuccessfully, that

since the statute being implemented did not contain a time

limit, the Department lacked authority to adopt a time limit by

rule. The General Motors Corporation court looked at the

Le gislature’s intent to protect the public health, safety, and

welfare of Florida citizens in the context of motor vehicle

dealer licensing. Id. at 77.

70. Further, “rulemaking authority may be implied to the

extent necessary to properly implement a statu te governing the

agency's statutory duties and responsibilities." General Motors

Corporation , citing Department of Professional Regulation, Board

of Professional Engineers v. Florida Society of Professional

Land Surveyors , 475 So. 2d 939, 942 (Fla. 1st DC A 1985).

Fairfield Communities v. Florida Land and Water Adjudicatory

Commission , 522 So. 2d 1012 (Fla. 1st DCA 1988).

71. Rule 5F - 11.047(1), Florida Administrative Code, is

necessary to carry out the provisions of Section 526.06, Florida

Statutes.

It is well established in Florida that the

Legislature, having enacted a Statute

complete in itself which declares a

legislative policy or standard and

operates to limit the power delegated, may

authorize an administrative agency to

prescribe rules and regulat ions for its

administration. . . . Where the empowering

provision of a statute states simply that an

agency may "make such rules and regulations

as may be necessary to carry out the

provisions of this Act," the validity of

regulations promulgated thereund er will be

sustained so long as they are reasonably

related to the purposes of the enabling

legislation, and are not arbitrary or

capricious.”

General Motors Corporation , citing Florida Beverage Corporation

v. Wynne , 306 So. 2d 200, 202 (Fla. 1st DCA 197 5) (citations

omitted). Accord General Telephone Company v. Florida Public

Service Commission , 446 So. 2d 1063 (Fla. 1984). General Motors

Corporation v. Florida Department of Highway Safety and Motor

Vehicles , 625 So. 2d 76, 78 (Fla. 1st DCA 1993)

72. The Department demonstrated by competent substantial

evidence how and why the two working day notice requirement of

Rule 5F - 11.047(1), Florida Administrative Code, is necessary to

implement or interpret the specific powers and duties identified

in Section 527.06, Florida Statutes.

73. “A capricious action is one which is taken without

thought or reason or rationality. An arbitrary decision is one

not supported by facts or logic, or despotic.” Board of

Trustees of the Internal Improvement Trust Fund v. Le vy , 656

So. 2d 1359 (Fla. 1st DCA 1995). It is significant that

Rule 5F - 11.047(1), Florida Administrative Code, requires “two

working days” notice, rather than 48 hours, two days, or no

advance notice at all. The designation of “working” days

logica lly reflects the reality that planning, coordination, and

execution of the excavation, disconnection, gas evacuation, and

transportation of gas - filled containers obviously must be

performed on work days when those persons required to perform

the activities are working. In some instances application for

governmental authorization must also be made. The fact that

"working" days was specified suggests that these factors were

considered. The two working day advance notice requirement of

Rule 5F - 11.047(1), Fl orida Administrative Code, is not an

arbitrary or capricious; rather it is a safety standard which is

thoughtful, logical, and reasonably related to promoting the

safe handling of LP gas and the proper installation, storing,

selling, utilizing, transportin g, servicing, testing, repairing,

and maintaining of liquefied petroleum gas equipment and

systems, and the proper storage and transport of LP gas

containers.

74. Rule 5F - 1.047(1), Florida Administrative Code,

promotes tank swaps, thus making the inherent ly dangerous

disconnect process unnecessary. Tank swaps also make temporary

storage of disconnected gas - filled containers on the public or

private property unnecessary. Promoting tank swaps promotes the

safe handling of LP gas and the proper selling, sto ring and

utilizing of LP gas equipment. Without two days' advance

notice, the opportunity to swap tanks is lost, because the

disconnect will have already occurred before the two gas

companies even discuss it.

75. Rule 5F - 11.047(1), Florida Administrative Code,

reduces the likelihood of injury or damage to persons and

property during the disconnect process. Financial interests

motivate the owner of a gas - filled container to preserve his

equipment and the gas product at a consumer site, and to protect

himse lf against liability which results from mishaps. The tank

owner is the most knowledgeable about the LP gas system because

he installed the container and perhaps the system, he has

delivered the LP gas, and may have serviced or repaired system

components. His interest in, his knowledge of, and experience

with a particular gas system, gives him superior knowledge of

any latent safety conditions, temporary latent repairs, and/or

red - tag situations that exist.

76. The two working day notice requirement of

Rule 5F - 11.047(1), Florida Administrative Code, facilitates the

tank owner warning the incoming gas company of latent safety

hazards or potentially unsafe conditions. Without advance

notice, there is no opportunity to warn another. Even if the

in coming company’s employee is properly trained, without

knowledge of a hidden danger, he may disconnect the gas - filled

container and find himself in an unexpected, perilous, and

uncontrollable situation, endangering himself, other persons and

property.

77. Another basis of authority to adopt the two working

day notice provision of Rule 5F - 11.047(1), Florida

Administrative Code, is the specific powers and duties

identified in Section 527.06(2), Florida Statutes, to promulgate

and enforce rules setting forth m inimum general standards

covering the design, construction, location, installation, and

operation of equipment for storing, handling, transporting by

tank truck, tank trailer, or pipeline and utilizing liquefied

petroleum gases, as are reasonably necessary for the protection

of the health, welfare, and safety of the public and persons

using such materials that are in substantial conformity with the

generally accepted standards of safety. Rule 5F - 11.047(1),

Florida Administrative Code, is a minimum general standard which

covers the location, installation, and operation of equipment

for storing, handling, and transporting by tank truck, LP gas.

78. Notice to the existing tank owner is a prerequisite to

the location and installation of the new LP gas equipme nt, and

as such, is a minimum general standard reasonably related to

those activities. With notice, the gas - filled tank owner can

work out the logistics necessary to pump LP gas from a tank that

will be a disconnected tank, so the tank can be transported from

the site. With notice the tank owner can apply for governmental

permits, locate piping, and other buried utilities, all of which

are attendant to the deinstallation and removal of existing

equipment so new gas equipment can be installed. For these

r easons, Rule 5F - 11.047(1), Florida Administrative Code, is a

minimum general standard that covers the location and

installation of equipment for storing, handling, and

transporting LP gas.

79. Rule 5F - 11.047(1), Florida Administrative Code, is in

substa ntial conformity with generally accepted standards of

safety, and with the published standards of the National Fire

Protection Association. See Section 527.06(3), Florida

Statutes.

80. Rule 5F - 11.047(1), Florida Administrative Code,

continues the “adv ance notice” concept which was amended into a

Regulation 11 in 1959, after Attorney General Ervin expressed

some concern that, an earlier version of the safety regulation

could conceivably have had an anti - competitive effect if

disconnections were forbidde n under any circumstances.

Rule 5F - 11.047(1), Florida Administrative Code, does not

prohibit disconnections under any circumstances, so the evil

warned of in the earlier regulation is not present in the

challenged Rule.

81. The two working day noti ce provision of Rule

5F - 11.047(1), Florida Administrative Code, in no way

economically harms the consumer, instead it provides beneficial

economic opportunities for the consumer, and is not anti -

competitive from the consumer standpoint. Petitioner presented

no competent substantial evidence that the Rule denied him

access to the market. This case is distinguishable from Florida

Board of Medicine v. Florida Academy of Cosmetic Surgery, Inc. ,

808 So. 2d 243 (Fla. 1st DCA 2002), where Section 455.544,

Florida Statutes, specifically granted power to the Secretary of

Health to challenge a rule if it unreasonably restricted

competition. Antitrust laws are enacted for the protection of

competition, not competitors. Brunswick Corporation v. Pueblo

Bowl - O - Mat, Inc ., 97 S. Ct. 690 (1977). The fact that

application of Rule 5F - 11.047(1), Florida Administrative Code,

results in economic benefits to consumers indicates healthy

competition, and that the rule has a pro - competitive effect.

FINAL ORDER

Based on t he foregoing Findings of Fact and Conclusions Law

set forth herein, it is

ORDERED:

That the Petition is dismissed.

DONE AND ORDERED this 2nd day of January, 2003, in

Tallahassee, Leon County, Florida.

___________________________________

DON W. DAVIS

Ad ministrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of January, 2003.

ENDNOTES

1/ One hundred and forty - five pounds PSI at ambient outside

temperature at 70 degrees Fahrenheit.

2/ Regulation 11 (Department's Exhibits 2 and 3)

3/ DOI's tank disconnect rule was iden tical to the challenged

rule.

4/ Department's Exhibit 8.

5/ Rule 5F - 11.047(1), Florida Administrative Code, does not

prohibit people from disconnecting the gas cylinders on their

barbecues because such cylinders are typically owned by the

consumer.

6/ A LP gas container is out of gas when there is not

sufficient gas in it to support combustion of a pilot light on

an appliance.

7/ "Gas - filled container" in this Order simply means the

container has gas in it, even though it may not be filled with

gas.

8/ If one company was prohibited from disconnecting another

company's tank without authorization, the company with its tank

connected to the gas system could monopolize a customer account

by simply refusing to authorize that its tank be disconnected.

9 / The disconnecting gas company is prohibited from using,

filling or delivering the container to the tank owner by Section

527.07, Florida Statutes, so once disconnected it would have to

be stored on the customer's property.

COPIES FURNISHED :

Steven M. Malono, Esquire

Pennington, Moore, Wilkinson,

Bell & Dunbar, P.A.

Post Office Box 10095

215 South Monroe Street, 2nd Floor

Tallahassee, Florida 32302 - 2095

Dana H. Plummer, Esquire

Department of Agriculture and

Consumer Services

407 South Calhoun Str eet

Mayo Building, Suite 520

Tallahassee, Florida 32399 - 0800

Honorable Charles H. Bronson

Commissioner of Agriculture

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Richard Ditschler , General Counsel

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Brenda D. Hyatt, Bureau Chief

Bureau of License and Bond

Department of Agriculture and

Consumer Services

407 South Calhoun Street, Mail Stop 38

Tallahassee, Florida 32399 - 0800

Carroll Webb, Executive Director

Joint Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399 - 1300

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 the original notice of appeal with the Clerk of the

Division of Administrative Hearings and a 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 notic e of

appeal must be filed within 30 days of rendition of the order to

be reviewed.