Florida League of Cities, Inc. v. Department of Ins. and Treasurer
| Decision Date | 28 February 1989 |
| Docket Number | BS-397,Nos. BS-373,s. BS-373 |
| Citation | 540 So.2d 850,14 Fla. L. Weekly 554 |
| Parties | 14 Fla. L. Weekly 554 FLORIDA LEAGUE OF CITIES, INC., and City of St. Petersburg, Appellants, v. DEPARTMENT OF INSURANCE AND TREASURER and Florida State Lodge, Fraternal Order of Police, Appellees. |
| Court | Florida District Court of Appeals |
James R. Wolf, Tallahassee, for appellant Florida League of Cities, inc.
Michael S. Davis, City Atty., and Laura Bamond, Asst. City Atty., St. Petersburg, for appellant City of St. Petersburg.
Gabriel Mazzeo, Tallahassee, for appellee Dept. of Ins. and Treasurer.
Charles A. Salerno, Tallahassee, for appellee Florida State Lodge, Fraternal Order of Police, and for amicus curiae, Florida State Fireman's Ass'n.
This consolidated appeal arises out of an administrative proceeding initiated by the Florida League of Cities (League) and the City of St. Petersburg (City) pursuant to section 120.54, Florida Statutes (1985), to challenge the validity of more than two dozen rules proposed for adoption by the Department of Insurance (Department). The proposed rules, which are based upon 1986 amendments to chapters 175 and 185, Florida Statutes, and amend chapters 4-14 and 4-54, Florida Administrative Code, affect numerous retirement and pension plans for municipal firefighters and police officers in St. Petersburg and other Florida municipalities. The affected plans were created pursuant to special acts authorizing local option pension and retirement plans. The hearing officer's final order found no merit in appellants' allegations that the proposed rules were arbitrary and constituted an invalid exercise of delegated legislative authority and upheld the validity of all but two of the proposed rules. 1 The final order also denied appellants' challenge to the sufficiency of the Department's economic impact statements accompanying the proposed rules. We reverse the appealed order in part because the hearing officer erred in determining the applicable law in several material respects.
Chapter 175, Florida Statutes, regulates firefighters' retirement systems and pension Effective October 1, 1986, chapter 175 was substantially amended by chapter 86-41, Laws of Florida, and chapter 185 was similarly amended by chapter 86-42, Laws of Florida. In general, these amendments made significant changes in various requirements applicable to firefighter and police pension and retirement plans. Some requirements in these chapters are expressly applicable to both types of plans, while others are expressly applicable only to one or the other type of plan. Many of the sections of these chapters are silent as to their applicability to local law plans. Legislative intent has been further clarified by the following language in section 1, ch. 86-41, section 175.021:
plans in the state of Florida, including firefighters employed by municipalities. Chapter 185 regulates retirement systems and plans for police employed by municipalities. Both chapters authorize two types of retirement or pension plans. One type is known as "chapter plans" and the other as "local law plans." Chapter plans are those created under chapters 175 and 185, and the provisions of those chapters are controlling on the plans' terms, conditions, and benefits. 2 Local law plans are those created either by special act of the legislature or by municipal ordinance and contain provisions relating to terms, conditions, and benefits that may substantially differ from many requirements found in chapters 175 and 185 for chapter plans. 3 Both types of plans receive funds collected pursuant to a premium tax levied on fire and property insurance policies sold in Florida and administered by the Department
[The legislature] intends, in implementing the provisions of s. 14, Art. X of the State Constitution as they relate to municipal firefighters' pension trust fund systems and plans, that such retirement systems or plans be managed, administered, operated, and funded in such manner as to maximize the protection of the firefighters' pension trust funds. This chapter hereby establishes minimum standards for the operation and funding of municipal firefighters' pension trust systems and plans.
Similar language was added by section 1, ch. 86-42, to section 185.01 regarding police officers' trust funds.
To implement the new statutory changes, the Department proposed numerous amendments to rules in chapters 4-14 and 4-54 of the Florida Administrative Code. In the November 7, 1986 edition of the Florida Administrative Weekly, the Department published notice of a public hearing on December 2, 1986, to consider the adoption of such rules. The hearing was held and the rules, with certain modifications and deletions, were adopted substantially as proposed.
Prior to that hearing, on November 26, 1986, the League filed its Petition for Administrative Determination of the invalidity of certain of the proposed rules. 4 The petition The matter was referred to a DOAH hearing officer, who held an evidentiary hearing on January 12, 1987. The parties filed stipulations that reduced the number of proposed rules being challenged and agreed to the admissibility of certain joint exhibits. Appellants presented the testimony of two expert witnesses, while appellees presented none. The hearing officer, with the exceptions previously noted, 5 ruled that petitioners had "not sustained their burden of proof" and upheld the validity of the challenged rules. 6
alleged that the identified rules exceeded the Department's legislatively delegated authority and that the Department had failed to provide an adequate economic impact statement in violation of section 120.54(2)(b). Shortly thereafter, the City, after being granted leave to intervene as a petitioner in the proceeding initiated by the League, filed its petition similarly challenging the validity of most of the same rules that the League challenged. The Fraternal Order of Police was allowed to intervene as a respondent in January 1987.
On this appeal, the City and the League maintain their attack on the invalidity of the following rules (except for the rules identified by asterisk):
Chapter 4"54 Chapter 4"14
4"54.024(3) 4"14.033(3)
4"54.027 4"14.036
4"54.029(2) 4"14.037(2)
4"54.033(2)* 4"14.040(2)
4"54.034 4"14.041
4"54.035
4"54.036 4"14.042
4"54.037 4"14.043
4"54.039 4"14.045
4"54.040* 4"14.046
4"54.041 4"14.047
4"54.045 4"14.051
4"54.047
4.54.048(3)(5)(6)(7) 4"14.053(3)(5)(6)(7)
4"54.049 4"14.054
The statutory provisions and amendments in chapters 175 and 185 are substantially similar, and the proposed rules in chapters 4-14 and 4-54 implementing the amendments are correspondingly similar. In the interest of judicial economy, the parties, with the express approval of the hearing officer, stipulated that the case would be presented only on the basis of the proposed rules in chapter 4-54 (relating to firefighters) and that, while no evidence would be presented with respect to the proposed rules in chapter 4-14 (), any determination of invalidity of a proposed rule in chapter 4-54 would be treated as invalidating the corresponding rule in chapter 4-14. Therefore, further discussion in this opinion will be limited to the statutory amendments in chapters 175, Florida Statutes, and proposed rule changes in chapter 4-54, Florida Administrative Code. Our decision in respect to these statutes and rules, consistent with the parties' stipulation as approved by the hearing officer, should be treated as equally applicable to the corresponding statutory and rule provisions in chapters 185 and 4-14, respectively.
The basic issue before us, as it was before the hearing officer, is what provisions of chapter 175 became applicable to local law plans by reason of the 1986 statutory amendments. The League and the City's rule challenge focuses on the Department's interpretation of the amendments as directing, by implication, that local law plans henceforth meet all minimum requirements set forth in chapter 175 chapter 86-41, whether or not the amending statutes contain a provision expressly All parties agree that prior to the 1986 amendments, certain provisions in chapter 175 were applicable to chapter plans alone, certain provisions were applicable to local law plans, and certain provisions were applicable to both types of plans. In general, determining which provisions of that chapter were applicable to local law plans was essentially dependent upon whether an express statutory provision made it applicable to local law plans. After the 1986 amendments, the Department took a different view regarding the applicability of all minimum standard provisions in that chapter to local law plans, primarily based upon the added language of legislative intent in section 175.021, quoted above. § 175.021, Fla.Stat. (1986 Supp.). Accordingly, the Department promulgated the proposed rules to implement this new construction of chapter 175.
making the specific requirement applicable to local law plans. The City and the League complain that the Department's interpretation of the statutory amendments, when applied to local law plans under the proposed rules, will significantly burden existing local law plans beyond any expressed legislative intent, and will add substantially to the financial cost of such plans to the affected municipalities. Appellants contend that the "proposed rules are an attempt to preempt municipal authority over local law plans where no express preemption authority exists" in violation of Article VIII, section 2 of the Florida Constitution, and section 166.021(1), Florida Statutes (League's Initial Brief, ...
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