05-003674RX Peter J. Singhofen, P.E. And Streamline Technologies, Inc. vs. Board Of Professional Engineers Status: Closed DOAH Final Order on Thursday, March 2, 2006.

Summary: The evidence showed that the Rule is inconsistent with guidelines that the State rules be consistent with. The Rule is an invalid exercise of delegated legislative authority.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PETER J. SINGHOFEN, P.E. AND )

STREAMLINE TECHNOLOGIES, INC., )

)

Petitioners, )

)

vs. ) Case No . 05 - 3674RX

)

BOARD OF PROFESSIONAL )

ENGINEERS, )

)

Respondent. )

)

FINAL ORDER

Pursuant to notice, a formal hearing was held in this case

before the Division of Administrative Hearings, by its

designated Administrative Law Judge Diane Cleavinger, on

November 29, 2005, in Tallahassee, Florida.

APPEARANCE S

For Petitioner: Edwin A. Bayo, Esquire

Gray Robinson, P.A.

301 South Bronough Street, Suite 600

Tallahassee, Florida 32301

For Respondent: Lee Ann Gustafson, Esquire

Office of the Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

STATEMENT OF THE ISSUE

The issue in this case is whether Florida Administrative

Rule 61G15 - 22.011(2 ) is an invalid exercise of delegated

legislative authority.

PRELIMINARY STATEMENT

Petitioner Peter J. Singhofen, is the President and sole

stockholder of Petitioner Streamline Technologies (Streamline).

Streamline filed an application for approval a s a Continuing

Education (CE) provider with the Respondent, Board of

Professional Engineers. Streamline's application was denied

based on Florida Administrative Code Rule 61G15 - 22.011(2),

providing that a continuing education provider shall have no

financ ial or commercial interest, direct or indirect, in any

technology that is the subject of the continuing education

course. On October 6, 2005, based on the Board’s denial,

Petitioners filed a Petition for an Administrative Determination

of the Invalidity o f Florida Administrative Code Rule 61G15 -

22.011(2).

At the hearing, Petitioner Singhofen testified on his own

behalf as well as on behalf of Streamline and offered the

testimony of one witness. Petitioners also offered seven

exhibits into evidence. Respondent did not present any

witnesses or exhibits.

After the hearing, the Petitioners and Respondent filed

Proposed Final Orders on January 9 and 10, 2006, respectively.

FINDINGS OF FACT

1. Petitioner Peter J. Singhofen is a licensed

profe ssional engineer in the State of Florida. He is the

President and sole stockholder of Petitioner Streamline.

2. In the 1980’s, Mr. Singhofen had a need for and

developed engineering software that specialized in stormwater

management for the terrain found in Florida. The software had

to be specific to Florida because the terrain in the state is

different from the terrain in many other parts of the country,

and the Florida Statutes and rules governing stormwater

management are some of the most string ent in the country.

3. The software that Mr. Singhofen developed uses the

Interconnected Channel and Pond Routing model (ICPR). This

system performs complex calculations utilized in stormwater

management and planning. It was the first proprietary m odel to

be formally reviewed and accepted as a nationally accepted

hydraulic model.

4. ICPR is also extensively used by local and state

government agencies throughout Florida, both to review

stormwater permit applications as well as for the development o f

stormwater management master plans. Some of the users of

Petitioners’ software are the Southwest Florida Water Management

District, Department of Environmental Protection, South Florida

Water Management District, St. Johns Water Management District,

and Department of Transportation. Indeed, ICPR may be the most

popular program of its type in the State of Florida.

5. Streamline sells the stormwater management software and

offers training and technical support for the software it sells.

Clearly Petitio ners have a direct financial interest in the

engineering software they developed and own.

6. As part of its business, Streamline conducts eight - to -

ten workshops each year. Many of the state and local agencies

that use ICPR send their engineers to these training programs.

7. These workshops take three days. The first two days

consist of intense lectures supported by hands - on exercises on

computers provided by Petitioners. On the third day

participants perform a "real world" project, using aerial

photographs and survey notes to work on the project. The

evidence was clear that these workshops are not “shill”

presentations that are tantamount to product promotions or

advertisements.

8. Florida Statutes require licensed professional

engineers to o btain a minimum of four professional development

hours in the licensees' area of practice each biennium, or two

hours per year. The Board approved Streamline as a CE provider

during the 2001 - 2003 and 2003 - 2005 bienniums. However,

Streamline's applicatio n for approval for the 2005 - 2007 biennium

was denied as a result of amendment to Florida Administrative

Code Rule 61G15 - 22.011(2), effective August 8, 2005.

9. The amendment to the Rule in question reads as follows:

. . . The continuing education provi der

shall not have any financial or commercial

interest, direct or indirect, in any

technology that is the subject of the

instruction.

10. The denial, and thus the Rule, has the potential to

affect Petitioners’ substantial interests in its product since

their training can no longer qualify for CE credits for the

engineers who need training and technical support in order to

better use this complex software.

11. The Notice of Rulemaking published in the Florida

Administrative Weekly listed the author ity for the Rule as

Section 471.017(3), Florida Statutes. Section 471.017(3),

Florida Statutes, grants the Board rulemaking authority and

requires that the CE rules be consistent with the guidelines of

the National Council of Examiners for engineering and Surveying

(NCEES) for multijurisdictional licensees.

12. The Notice of Rule Development published in the

Florida Administrative Weekly, as well as the Notice of

Rulemaking, stated the purpose and effect of the Rule was to

include a prohibition of conflict of interest as an added

requirement for Board approval of CE providers. The same reason

was provided in the Additional Statement to the Secretary of

State under the Statement of Facts and Circumstances Justifying

Proposed Rule. However, there wa s no discussion or finding by

the Board prior to engaging in rulemaking that a CE provider who

taught about technology over which he or she had a commercial

interest would be engaging in a conflict of interest. In fact,

the NCEES guidelines do not contain such a prohibition.

According to the Board’s Director, the statement that the

purpose and effect of the Rule was to avoid a conflict of

interest was "erroneous" and that "it was erroneous three times

if it was published three times." Indeed, other than minor

references in various minutes of Board meetings, there was very

little official Board discussion about the Rule prior to its

adoption. The evidence on the rationale behind the Rule showed

that there was general concern by the Board over prohibiting

“shill” CE courses that were nothing more than product

promotions or advertisements. The fact that the published

purpose of the Rule was erroneous is a material failure to

follow the rulemaking process since notice to the public of the

Rule’s purpose is a n important aspect of rulemaking.

13. Notably, the Board does not directly approve

individual courses. It approves CE providers. Under the Rule

the courses must be offered or sponsored by an approved CE

provider. NCEES model rules do recognize that a governmental

authority may approve CE providers. In Appendix C, the

guidelines indicate that provider approval be contingent upon

the provider permitting a Board to attend courses and review

course material to determine whether the course meets the

standa rds of the Board.

14. In the process of applying for CE provider status, the

Board requires the applicant to provide course descriptions,

syllabuses, and a list of courses intended to be provided.

15. Section 456.025(7), Florida Statutes, mandates that:

[e]ach board . . . shall establish, by rule,

a fee not to exceed $250 for anyone seeking

approval to provide continuing education

courses or programs and shall establish by

rule a biennial renewal fee not to exceed

$250 for the renewal of providersh ip of such

courses. The fees collected from continuing

education providers shall be used for the

purposes of reviewing course provider

applications, monitoring the integrity of

the courses provided, covering legal

expenses incurred as a result of not

gran ting or renewing a providership, and

developing and maintaining an electronic

continuing education tracking system.

16. Florida Administrative Code Rule 61G15 - 22.011 provides

that:

a. The Board retains the right to audit

and/or monitor courses [61G15 - 2 2.011(7)],

which the guidelines require the provider to

permit;

b. The Board retains the right to review

course materials [61G15 - 22.011(7)], which

the guidelines require the provider to

supply;

c. The provider must provide a description

of the type of c ourses or seminars the

provider expects to conduct [61G15 -

22.011(3)(a)] and a sample of intended

course materials [61G15 - 22.011(3)(d) and the

course curriculum [61G15 - 22.011(3)(f)],

which the guidelines require a provider to

supply;

d. The provider must d emonstrate the

education and/or experience necessary to

instruct engineers in the conduct of their

practice [61G15 - 22.011(2)], which reflects

the guideline requirement that providers

ensure instructors are qualified;

e. The provider must list anticipated

locations to conduct the course [61G15 -

22.011(3)(3)], which the guidelines require

the provider to supply after the course is

presented.

Based upon information an applicant has provided, the Board has

in the past denied applications for CE providers propo sing to

offer "shill" courses. Additionally, an existing rule of the

Board, as well as NCEES guidelines, specifically provides that

equipment demonstrations or trade show displays do not qualify

as continuing education activities. See Fla. Admin. R. 61G1 5 -

22.005. The evidence was not clear on how denial of CE provider

status, because the provider had a financial interest in the

technology which is the subject of a CE course, would prohibit

“shill” courses without limiting otherwise legitimate CE courses

such as the one here. Indeed, the most logical person to

present a course on the software at issue here would be

Petitioners, since they are the developers of the software.

17. The NCEES guidelines at Section 2 set forth model

rules for continuing profe ssional competency.

18. NCEES guideline 2B4 defines course/activity as any

qualifying course or activity with a clear purpose and objective

that will maintain, improve, or expand the skills and knowledge

relevant to the licensee's field of practice. Rul e 61G15 -

22.002(5) defines course/activity as any qualifying course or

activity with a clear purpose and objective that will maintain,

improve or expand the skills and knowledge relevant to the

licensee's area of practice. Clearly, Petitioners’ workshops

m eet these definitions.

19. NCEES guideline 2C sets forth the ways licensees can

earn the necessary CE credit through patenting inventions,

active participation as an officer in professional or technical

societies, authoring published papers, articles, bo oks or

accepted licensing exam items, teaching or instructing college

courses or continuing education courses, completion of college

courses, CE courses, correspondence, televised, videotaped and

other short courses or tutorials, seminars, in - house courses ,

attendance at workshops, professional and technical

presentations made at meetings, conventions or conferences.

Similarly, Florida Administrative Code Rule 61G15 - 22.003, sets

forth qualifying activities for the area of practice

requirements and generall y lists the same types of activities as

the NCEES guidelines. Petitioners’ course specifically falls

within both the NCEES guidelines and the Board’s rules defining

qualifying activities for CE credit. Thus, the Board’s

amendment to Florida Administrativ e Code Rule 61G15 - 22.011

results in a qualifying activity being excluded from such

recognition, and thereby is inconsistent with NCEES guidelines.

Such inconsistency is outside of the Board’s rulemaking

authority and the amendment to Florida Administrativ e Rule

61G15 - 22.011(2) is an invalid exercise of delegated legislative

authority.

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. § 120.56(3), Fla. Stat.

21. S ection 120.52(8) defines "invalid exercise of

delegated legislative authority" as follows:

a) The agency has materially failed to

follow the applicable rulemaking procedures

or requirements set forth in this chapter;

b) The agency has exceeded its grant of

rulemaking authority, citation to which is

required by s. 120.54(3)(a)1.;

c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required

by s. 120.54(3)(a)1.;

d) The rule is vague, fails t o establish

adequate standards for agency decisions, or

vests unbridled discretion in the agency;

e) The rule is arbitrary or capricious. A

rule is arbitrary if it is not supported by

logic or the necessary facts; a rule is

capricious if it is adopted w ithout thought

or reason or is irrational; or

f) The rule imposes regulatory costs on the

regulated person, county, or city which

could be reduced by the adoption of less

costly alternatives that substantially

accomplish the statutory objectives.

22. Petitioners have challenged Rule 61G15 - 22.011 on the

grounds that it was improperly promulgated; that it enlarges,

modifies, or contravenes the specific provision of law

implemented; that it is vague, fails to establish adequate

standards for agency decisi ons, or vests unbridled discretion in

the agency; that it is arbitrary; and that it imposes regulatory

costs on the regulated person which could be reduced by the

adoption of a less costly alternative that substantially

accomplishes the statutory objective s.

23. Petitioners have the burden of proof in this

proceeding and must demonstrate by a preponderance of the

evidence that the Rule is an invalid exercise of delegated

legislative authority. § 120.56(3), Fla. Stat.

24. Section 471.017(3), Florida Stat utes (2004), provides:

(3) The board shall require a demonstration

of continuing professional competency of

engineers as a condition of license renewal

or relicensure. Every licensee must

complete 4 professional development hours,

for each year of the li cense renewal period.

For each renewal period for such continuing

education, 4 hours shall relate to this

chapter and the rules adopted under this

chapter and the remaining 4 hours shall

relate to the licensee's area of practice.

The board shall adopt ru les that are

consistent with the guidelines of the

National Council of Examiners for

Engineering and Surveying for

multijurisdictional licensees for the

purpose of avoiding proprietary continuing

professional competency requirements and

shall allow nonclas sroom hours to be

credited. The board may, by rule, exempt

from continuing professional competency

requirements retired professional engineers

who no longer sign and seal engineering

documents and licensees in unique

circumstances that severely limit

oppo rtunities to obtain the required

professional development hours. (e.s.)

25. Section 120.58(8), Florida Statutes (2004), defines

"invalid exercise of delegated legislative authority" as "action

which goes beyond the power, functions, and duties delegate d by

the Legislature." See Pedersen v. Green , 105 So. 2d 1 (Fla.

1958); State, Department of Rehabilitative Services v. McTigue ,

387 So. 2d 454 (Fla. 1st DCA 1980) ("it is axiomatic that an

administrative rule cannot enlarge, modify, or contravene the

pro visions of a statute. A rule which purports to do so is an

invalid exercise of delegated legislative authority"). State,

Department of Business and Professional Regulation v. Salvation

Limited, Inc. , 452 So. 2d 65 (Fla. 1st DCA 1984).

26. In this case, Florida Administrative Code Rule 61G15 -

22.011(2), constitutes an invalid exercise of delegated

legislative authority under Section 120.52(8)(c), Florida

Statutes. It eliminates for consideration a category of

continuing education that is a qualified acti vity under the

NCEES guidelines and is therefore, inconsistent with those

guidelines and contravenes the specific provisions of Section

417.017(3), Florida Statutes. The evidence also showed that the

Rule was improperly promulgated since the Notice of Rul emaking

published in the Florida Administrative Weekly listed an

erroneous purpose for the Rule. The evidence did not

demonstrate that the Rule was vague or vested unbridled

discretion in the Board. The meanings of the terms, such as

“indirect interest,” in the Rule are sufficiently well known

that any further application of them must be done on a case - by -

case basis.

ORDER

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

ORDERED:

That the Petition for Administrative Deter mination of the

Invalidity of Rule 61G15 - 22.011(2) is granted, and that said

Rule constitutes an invalid exercise of delegated legislative

authority.

DONE AND ORDERED this 2nd day of March, 2006, in

Tallahassee, Leon County, Florida.

S

DIANE CLEAVINGER

Administrative 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 March, 2006.

COPIES FURNISHED :

Edwin A. Bayo, Esquire

Gray Robinson, P.A.

301 South Bronough Street, Suite 600

Tallahassee, Florida 32301

Lee Ann Gustafson, Esquire

Office of th e Attorney General

The Capitol, Plaza Level 01

Tallahassee, Florida 32399 - 1050

Simone Marstiller, Secretary

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Josefina Tamay o, General Counsel

Department of Business and

Professional Regulation

Northwood Centre

1940 North Monroe Street

Tallahassee, Florida 32399 - 2202

Paul J. Martin, Executive Director

Board of Professional Engineers

2507 Callaway Road, Suite 200

Tallahassee , Florida 32303 - 5267

Doug Sunshine, Esquire

Vice President for Legal Affairs

Florida Engineers Management Corporation

2507 Callaway Road, Suite 200

Tallahassee, Florida 32303 - 5267

Scott Boyd, Executive Director

And General Counsel

Administrative Proc edures Committee

Holland Building, Room 120

Tallahassee, Florida 32399 - 1300

Liz Cloud, Program Administrator

Administrative Code

Department of State

R. A. Gray Building, Suite 101

Tallahassee, Florida 32399

THE NOTICE OF RIGHT TO JUDICIAL REV IEW

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 agency 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 Appellat e District where the party resides. The notice of

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

be reviewed.