Pursuant to industry input, amendments to the citrus fruit dealer licensing process to ensure better protection for the Florida citrus grower.

 

DEPARTMENT OF CITRUS

RULE NOS.:RULE TITLES:
20-108.001General Provisions
20-108.002Processing of Applications
20-108.004Determination of Minimum Bond Required
20-108.006Investigation and Determination of Financial Responsibility
20-108.007Disposition of Application
20-108.008Special Presentations
20-108.009Treatment of Persons Protected Under the Bankruptcy Act
PURPOSE AND EFFECT: Pursuant to industry input, amendments to the citrus fruit dealer licensing process to ensure better protection for the Florida citrus grower.
SUMMARY: Citrus Fruit Dealer licensing process and requirements.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:
The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.
The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: upon review of the proposed changes to these rules and incorporated forms, the department has determined that
the amendments will not exceed any one of the economic analysis criteria in a SERC as set forth in s. 120.541(2)(a), F.S.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 601.10(1),(7), 601.56, 601.57(7), 601.61(1)(a) FS.
LAW IMPLEMENTED: 601.03(8), 601.10(1),(5),(7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: December 19, 2012, 9:00 a.m.
PLACE: Florida Department of Citrus, 605 E. Main Street, Bartow, FL 33830
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Alice Wiggins, License & Regulation Specialist, P. O. Box 9010, Bartow, FL 33831 or [e-mail] or [phone]

THE FULL TEXT OF THE PROPOSED RULE IS:

20-108.001 General Provisions.

(1) All citrus fruit dealer license application forms (CIT/LIC/01 Rev. 5-31-07, subsection 20-100.004(1), F.A.C. and CIT/LIC/02 rev. 6-22-04, subsection 20-100.004(2), F.A.C.) must be properly completed with accompanying documentation and filed at least 30 days before the applicant intends to operate; however, for the application for licensure to be considered prior to the start of each shipping season (which, pursuant to Section 601.55(2)(a), Florida Statutes, begins August 1 of each year), the application for licensure must be properly completed and timely filed no later than June 30 and timely filed by the applicant by June 15 of each year. These forms can be downloaded at http://www.fdocgrower.com/category/forms/. Each properly completed application shall be carefully reviewed and appropriate investigation made by the staff as hereinafter provided. and any errors or omissions noticed to the applicant in accordance with the provisions of the Administrative Procedures Act, s.120.60, Florida Statutes. In accordance with the provisions of the Administrative Procedure Act, Section 120.60, Florida Statutes, within 30 days of receipt of any application containing any apparent errors or omissions, Department staff shall notify an applicant of such errors or omissions. The applicant shall have 15 days from the date of such notification to provide the additional information required by the Department.

(2) No change.

Rulemaking Specific Authority 601.10(1), 601.56 FS.  Law Implemented 601.03(8), 601.10(5), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS. History--Formerly 105-2.02(1), Formerly 20-108.01, Amended 4-23-95, 7-2-03,

___________.

20-108.002 Processing of Applications.

"New applications" and "repeat applications" as defined by Section 601.55, Florida Statutes, shall be processed as follows:

(1)  If the application is properly completed, and the review and investigation reveals no unusual or questionable circumstances which have not been satisfactorily resolved answered, the staff shall be authorized to give conditional approval and transmit the application to the Department of Agriculture and Consumer Services for issuance of a license pending final approval by the Commission as outlined in Section 601.57, Florida Statutes.  A list of all applications so processed shall be furnished to each Commission member and Commission consideration of final approval shall occur by the Commission of each shall be requested at the next applicable Commission meeting in accordance with 20-108.002(4) F.A.C. Applicants shall be made aware that pursuant to Section 601.57, Florida Statutes, only the Florida Citrus Commission has the authority to approve or deny a license application. Staff’s “conditional approval” is subject to approval by the Commission and shall, in no way, vest applicants with any rights pursuant to Chapter 120, or otherwise. Staff may rescind such conditional approval at any time prior to the Commission giving final approval in the event additional facts are discovered which evidence:

a. The applicant owes additional assessments or is not current on the payment of its assessments;

b.   The applicant has failed to report outstanding debt as required by the application;

c.    The applicant has misrepresented the applicant’s work/employment or criminal history;

d.  Other factors which would constitute grounds for disapproval of the application as specified under Section 601.57(4), Florida Statutes and /or Section 601.641, Florida Statues.

In the event staff rescinds such conditional approval, notice of such action shall be provided to the Department of Agriculture and Consumer Services and the applicant shall immediately cease all operations affected.

(2) If the staff review and investigation of a properly completed application reveals unusual or questionable circumstances which cannot be satisfactorily resolved answered, the application shall not be given conditional staff approval but shall be presented to the Commission at its next regularly scheduled meeting (subsection 20-108.002(4) below) along with a staff report outlining all pertinent information concerning the application.  A staff recommendation for approval, disapproval or other action appropriate under the particular circumstances shall be included in the report.

(3) In the event staff recommends denial of an application, or approval of an application subject to placing conditions on the license, such staff recommendation shall constitute an agency determination affecting the substantial interest of the applicant, and the applicant may, within 15 days of receipt of the notice of the staff recommendation, request an administrative hearing pursuant to Section 120.569, Florida Statutes, which hearing shall be conducted pursuant to Section 120.57, Florida Statutes. In the event the Department adopts the recommended order of the administrative law judge, pursuant to Rule. 20-108.007, F.A.C., the Commission shall treat the administrative law judge’s recommendation as the Staff’s recommendation regarding the application.

(4)(a) At least 30 days prior to an application being considered by the Commission at its regularly scheduled meeting, a list of all applications for Commission consideration at that meeting, along with staff’s recommended action on the application, shall be posted on the Department’s fdocgrower.com website. Failure to meet this 30-day posting deadline due to an incomplete application shall cause the application, once completed, to be presented for consideration at the next regularly scheduled meeting of the Commission. The posting deadline shall not impact the department’s authority to grant conditional approval of completed applications, pursuant to subsection 20-108.002(1), F.A.C.

(b) Any person wishing to file a written challenge to staff’s recommendation regarding the issuance of such license, the recommended minimum bond amount or recommended conditions on the license, shall, no later than 20 days prior to the Commission meeting at which the Commission is scheduled to consider the application, shall provide the Department (with a copy to the applicant) with specific, written reasons why the license should not be granted to the applicant and/or why the recommended minimum bond amount or conditions placed on the license are insufficient. To be considered by staff and/or the Commission, any such written challenge shall be signed by the person submitting the challenge and shall contain sufficient material to substantiate a challenge. If such written challenge results in a changed staff recommendation regarding the application, the staff shall provide the applicant with an opportunity to (i) postpone consideration of the application until the next regularly scheduled Commission meeting; (ii) request an administrative hearing pursuant to Section 120.569, Florida Statutes, which hearing shall be conducted pursuant to Section 120.57,  Florida Statutes; or (iii) proceed with the Commission’s consideration of the license application as scheduled. In acting upon the application, the Commission shall consider, in addition to all other relevant factors, any such timely submitted written challenge.

Rulemaking Specific Authority 601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS. History--Revised 12-18-74, Effective 12-31-74, Formerly 105-2.02(2), Formerly 20-108.02, Amended 4-23-95,__________ .

20-108.004 Determination of Minimum Bond Required.

(1)  Subject to the provisions in subsection 20-108.004(4), F.A.C., the following schedule shall be used in calculating the amount of surety bond, certificate of deposit, or cash bond posted in support of the applicant’s citrus fruit dealer’s license:

(a)  $1,000 up to 2,000 boxes;

(b)  $2,000 up to 5,000 boxes;

(c)  $3,750 up to 7,500 boxes;

(d)  $5,000 up to 10,000 boxes;

(e)  $10,000 up to 20,000 boxes;

(f)  $1,000 for each additional 20,000 boxes or fraction thereof in excess of 20,000 boxes, with a maximum bond of $100,000.

(2)(1) Repeat applications:

The minimum bond to be posted in support of repeat such applications shall be not less than the amount required to cover the total volume of fruit handled by the dealer during the previous season for which bond was required.  Exceptions to this rule shall only be made by special approval of the Commission, by majority vote, based upon the written request of the applicant which written request must be received by the Department no later than 20 days prior to the Commission meeting at which the application will be considered by the Commission.  The applicant's written request shall give a full explanation of why the applicant feels he will handle deal with less bondable fruit during the season for which application is made, than was handled dealt with by the applicant him during the previous season.

(3)(2) New applications:

(a) The minimum bond required of new applications shall be based on the volume of fruit stated in the application which the applicant expects to handle as that expected to be handled during the season for which the application is made and for which bond is required.  As an additional basis for determining minimum bond the Commission shall take into consideration such factors as any past history of the applicant which may be available; the type of business to be conducted by the applicant; and any other information appropriate to make a proper determination as to the minimum bond required to assure reasonable protection to growers and dealers with whom the new applicant may be expected to do business.

(b) When the facts indicate there is a valid reason to require a larger minimum bond than that indicated by the volume of bondable fruit shown on an application, the staff shall prepare a recommendation to the Commission as to an appropriate minimum bond to be required prior to the application being approved.  No such application shall be given conditional staff approval unless the applicant posts a bond in accordance with the staff's recommendation.  Final decision as to the minimum bond required shall be made by the Commission at the time the application is presented for final approval.

(4) General minimum bond requirements for both repeat and new applications:

(a) As an additional basis for determining minimum bond required, the staff (in making recommendations) and the Commission (in setting the bond requirements) shall take into consideration such factors as any past history of the applicant (or anyone affiliated with the applicant as contemplated in Section 601.57(1) and (5), Florida Statutes) which may be available ; the type of business to be conducted by the applicant; submissions by the public as outlined in subsection 20-108.002(4), F.A.C.; and any other information appropriate to make a proper determination as to the minimum bond required. In assessing all factors, the staff and the Commission shall, to the extent possible, assure reasonable protection to the growers and dealers with whom the applicant may be expected to do business.

(b) When the facts, including, but not limited to, those adduced by staff pursuant to Rule 20-108.006, F.A.C., indicate there is a valid reason to require a larger bond than indicated by the volume of bondable fruit shown on an application, the staff shall have the authority to recommend and the Commission shall have the authority to require, the applicant to post a higher bond which may exceed the $100,000 maximum contained within subsection 20-108.004(1), F.A.C., in order to ensure reasonable protection to the growers and dealers with whom the applicant can be expected to conduct business. Such facts shall include, but not be limited to:

1. The applicant’s amount of “overdue debt” as defined in  Rule 20-108.006, F.A.C., is greater than 50% of the amount of the citrus fruit dealer’s bond coverage;

2. The applicant’s past history indicates the applicant poses a special risk of non-payment; or

3. Industry input as contemplated in paragraph 20-108.002(4)(b), F.A.C., suggests that the applicant poses a special risk of non-payment.

(c) The increased amount of surety bond, certificate of deposit, or cash bond posted in support of the applicant’s citrus fruit dealer’s license shall be determined by adding the minimum bond required for an applicant based on the schedule set out in subsection 20-108.004(1), F.A.C., plus an additional amount equal to the amount of overdue debt as defined in subsection 20-108.006(1), F.A.C. Under this rule, the increased bond amount may exceed the $100,000 maximum contained within subsection 20-108.004(1), F.A.C.

The staff shall prepare a recommendation to the Commission as to an appropriate bond amount prior to the application being approved. Final decisions as to the bond amount required shall be made by the Commission at the time the application is presented to the Commission for final approval.

Rulemaking Specific Authority 601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS. History--Revised 12-18-74, Effective 12-31-74, Formerly 105-2.02(4), Formerly 20-108.04, Amended 4-23-95, 11-27-12,                                       .

20-108.006 Investigation and Determination of Financial Responsibility.

It is the express intention of the Department of Citrus that the Department staff make of Citrus staff make a reasonable effort in its review and investigation of each application to determine applicant's financial responsibility to citrus growers and dealers. In order to facilitate this investigation, each new applicant shall submit at least three business references (grower or credit, as provided on the citrus fruit dealer application) and supply the department with the requested information necessary to conduct a Florida Department of Law Enforcement background check. Such determination additionally shall consider the following factors:

(1) For the purpose of this rule, the term “overdue debt” means that a valid invoice from a grower or dealer remains unpaid by the applicant (or anyone affiliated with the applicant as contemplated in Section 601.57(1) and (5), Florida Statutes,) for more than 90 days (and that the creditor has not signed off on the debt).

(2)(1) Where information on an applicant shows outstanding debts to growers or dealers, which are not shown as being overdue, involving the handling, purchase or sale of citrus fruit, the staff shall make a determination as to whether or not the number and total amount of such debts appear to be within the normal range for such debts that might be expected for the type and size of operation taking into account the current market price for fruit, the amount of citrus fruit dealers bond coverage, the time of year and any other factors or information pertinent to the particular situation.  If the staff feels it is necessary to do so in order to clarify the status of indebtedness of the applicant, it shall contact each creditor or take such other action it deems necessary to verify the amount and due date of each debt and the degree of satisfaction with which the debt is being handled.

(3)(2) Where information on an application shows overdue debts to growers or dealers involving the handling, purchase or sale of citrus fruit, the staff shall determine whether or not a formal complaint has been filed with the Department of Agriculture and Consumer Services by each creditor.  Where a formal complaint has been filed, the amount claimed and the amount of indebtedness shown on the application shall be checked for accuracy.  If no formal complaint has been filed, the staff shall notify each creditor, as shown on the application or otherwise known by the staff to exist, and verify the accuracy and due date of the debt and advise the creditor of his right to file formal complaint with the Department of Agriculture and Consumer Services.  Where the circumstances appear to warrant it, all creditors covered by this section shall be contacted by the staff in writing by certified mail, return receipt requested, and asked to make recommendation to the Department of Citrus as to whether or not the applicant should be approved for issuance of a new license.  If any such creditor objects to such approval, the staff shall not be authorized to give conditional approval of the application.

(4)(3) If the staff review and investigation of a properly completed application reveals unusual or questionable financial circumstances, which cannot otherwise be satisfactorily resolved answered, staff shall require the applicant to furnish a financial statement which shall be considered “additional information” as contemplated in Section 120.60(1), F.S., and subsection 20-108.001(1), F.A.C., and, therefore, must be submitted to the Department within 15 days of Department’s request for the same.

(5)(4) Staff shall not have the authority to give conditional staff approval nor shall the Commission approve a license application without specific conditions being placed on the license if: Conditional staff approval shall not be given nor shall final Commission approval be granted if:

(a) The total amount of overdue debt indebtedness is greater than 75% of the amount of citrus fruit dealers’ bond coverage; and/or

(b) The application bears shows the name of any individual who has a past history of a direct connection with a citrus fruit dealer against whom there is still a record of outstanding debts which arose out of his dealings in citrus fruit.

Nothing herein shall prohibit the Commission from denying the license based on the above criteria.

Rulemaking Specific Authority 601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS. History--Revised 12-18-74, Effective 12-31-74, Formerly 105-2.02(5) (c), (d), Formerly 20-108.06, Amended 4-23-95,                                      .

20-108.007 Disposition of Application and Revocation of Licenses.

Each application presented to the Commission shall be accompanied by a recommendation from the staff as to disposition, or, in the event an applicant has sought administrative review of a staff recommendation as outlined in Section 120.569, Florida Statutes, and subsection 20-108.002(3), F.A.C., an administrative law judge’s recommended order, and shall be acted upon in the following manner:

(1) Denial: All applications presented to the Commission with a recommendation for denial shall be accompanied by a staff report setting forth a summary of the staff's review and investigation of the application.; the basis for the recommendation; The staff recommendation shall include, in addition to other information helpful to the Commission, the basis for the recommendation, and, if applicable, a copy of the administrative law judge’s recommended order.  and provisions for a hearing if one should be requested by the applicant.  The Department of Citrus shall inform the applicant of any right to a hearing pursuant to Section 120.57, Florida Statutes, on a Commission action denying an application.  The Commission, by a majority vote of the members present, shall decide by roll call vote the action to be taken on all applications so presented.

(2) No change.

(3) Approval Subject to Conditions: Conditional approval:  Whenever the facts warrant it, an application shall be presented to the Commission with the staff recommendation that the Commission approve the application contingent upon such reasonable conditions as the Commission may order endorsed thereon, based on the staff report setting forth the facts, grounds and basis for such conditions.  The Commission in so granting approval of a license subject to conditions a conditional approval shall include in its action appropriate sanctions to ensure compliance with the conditions endorsed thereon. Approval of a license subject to conditions Conditional approval of any application shall be by majority vote of the Commission members present.

(4) Such conditions may include but are not limited to:

(a) Require that the applicant post a higher bond pursuant to paragraph 20-108.004(4)(b), F.A.C.

(b) Require that the applicant and license be reviewed by the Commission at their regularly scheduled meeting six months after issuance of the license subject to conditions, and if the Commission does not meet six months after the issuance of the license subject to conditions then the applicant and license will be reviewed at the next regularly scheduled Commission meeting following the passage of the initial six month review period.

(c) Require the applicant to operate on a cash basis, and/or

(d) Require that the applicant make payments according to a schedule subject to the Commission’s final approval.

(5) Approval of a license subject to conditions shall be by majority vote of the Commission members present. Additionally, a list of all applicants that have been granted a license subject to conditions by the Commission, including the conditions and/or sanctions that accompany the license, shall be posted on the Department’s website.

(6)(4) Deferred action:  Commission action on any application may, by majority vote, be deferred to a subsequent date for final action, however, in accordance with Section. 120.60, Florida Statutes, final action must be taken within 90 days after receipt of the original application or receipt of timely requested additional information or correction of errors or omissions.

(7) Final Agency Action: A vote by the Commission to deny, approve, or approve a license subject to conditions, shall be considered final agency action subject to judicial review as prescribed in Section 120.68, Florida Statutes.

(8) The Commission shall have the authority to revoke a license where facts and circumstances indicate that the licensee has failed to satisfy a condition of its licensure, pursuant to Section 120.60, F.S., when such facts and circumstances as those contemplated in Sections 601.64 and 601.641, F.S., indicate that revocation is necessary in order to protect the growers and others in the industry with whom the licensee has or will conduct business during the term of the license.

Rulemaking Specific Authority  601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS. History--Revised 12-18-74, Effective 12-31-74, Formerly 105-2.02(6) (a), (b), Formerly 20-108.07, Amended 4-23-95,                                        .

20-108.008 Special Presentations.

(1) All applications from persons who during the current or immediately prior season were the subject of a disciplinary order of the Commissioner of Agriculture shall be presented separately to the Commission with a brief outline of the order and the circumstances surrounding the order. The Commission, by a majority vote of the members present, shall decide by roll call vote the action to be taken on all applications so presented.

(2) No change.

Rulemaking Specific Authority 601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.55, 601.56, 601.57, 601.58, 601.60, 601.61 FS  History--Revised 12-18-74, Effective 12-31-74, Formerly 105-2.02(6) (c), Formerly 20-108.08, Amended 4-23-95,                                   .

20-108.009 Treatment of Persons Protected Under the Bankruptcy Act.

(1) The Commission shall not deny a license application nor place conditions upon the license of any applicant solely because such applicant, or another person with whom the applicant has been associated, is or has been a debtor under the Bankruptcy Reform Act of 1978 (Pub.L. 95-598, 92 Stat. 2549, November 6, 1978).  However, nothing herein shall prohibit the Commission from the consideration of other factors, such as future financial responsibility or method and manner of doing business.

(2) Where an applicant's license is conditioned upon doing business on a "cash only" basis, a bond or certificate of deposit in excess of the schedule in subsection 20.108.004(1), F.A.C. s. 601.61(1), Florida Statutes, shall not be required unless the Commission has reason to believe that the applicant may violate such condition of his license.  In making such determination, the Commission shall consider applicant's reputation as shown by past and current activities, including his method and manner of doing business.

Rulemaking Specific Authority 601.10(1), (7), 601.56 FS. Law Implemented 601.03(8), 601.10(1), (5), (7), 601.57, 601.58, 601.60, 601.61(1) FS. History--New 1-11-89, Repromulgated 4-23-95, Amended                         .

NAME OF PERSON ORIGINATING PROPOSED RULE: William Roberts, Acting General Counsel
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Florida Citrus Commission
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 12, 2012
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: October 1, 2012