Purpose


There exists an immediate danger to the public health, safety and welfare due to a final order concluding that the Division of Alcoholic Beverages and Tobacco’s implementation of s. 210.25(13), F.S., qualifies as an unadopted rule. On March 3, 2016, the Division of Administrative Hearings issued a final order in consolidated case number 15-6108RU and 15-6148RU, holding that the Division’s inclusion of “non-OTP items” such as federal excise tax and shipping within the wholesale sales price is an unadopted rule. This final order is unexpected and will be appealed. The Division of Alcoholic Beverages and Tobacco believes that it has implemented the plain meaning of a statute which has been judicially recognized as clear. The Division has not imposed a requirement not specifically required by s. 210.25(13), F.S. An emergency rule is necessary during the pendency of the appeal as taxpaying distributors’ reliance on the final order will have a substantial and irreparable effect on revenues that are intended for the Health Care Trust Fund within the Agency for Health Care Administration. The Division remitted approximately sixty seven million dollars from the collection of surcharge on tobacco products to the Agency for Health Care Administration in fiscal year 2014-15 and is projected to remit approximately seventy million dollars to the Agency for Health Care Administration in fiscal year 2015-16. These funds are used to pay Medicaid providers for medical assistance related services, including hospice, hospital in-patient care, physician and health care practitioner services, pre-paid health plans, prescribed medicine and drugs, nursing home care, and pre-paid long term care. Without an emergency rule, the final order will, at a minimum, affect these revenues by fifty percent. As such, the final order qualifies as an exigent circumstance resulting in an immediate danger to the public health, safety and welfare. The emergency rule defines “established price”, as used in s. 210.25(13), F.S., and concerns the assessment of tobacco products. The language of the emergency rule substantially comports with the Division’s longstanding understanding and interpretation of s. 210.25(13), F.S., which has been adopted in large part by HB 7099 (2016), a taxation bill which has been passed by the House and approved by the Senate Finance and Tax Committee. The language of HB 7099, as presently drafted, would become effective on July 1, 2016.