A. General

1372. As noted in Section III A, above, Chapter 373 affords the District considerable discretion in implementing the three-prong test of Section 373.223(1). Discretion is inherent in the statutory definition of "reasonable-beneficial use" in Section 373.019(4), as well as the various policy pronouncements in the statute regarding the protection of fish and wildlife, conservation generally and protection of the water resources. See e.g., Sections 373.016(2)(a),(b) and (f); 373.043; 373.113; and 373.175.

1373. In carrying out its legislatively assigned responsibilities, the District must provide the regulated public with notice of its policies in accordance with Sections 120.535 and 120.54, F.S. It is admittedly a difficult task to balance the policy goals of Chapter 373 with the procedural requirements of Chapter 120.

1374. "There are quantitative limits to the detail of policy that can effectively be promulgated as rules, or assimilated." McDonald, supra, 346 So.2d 569, 581 (1979); accord, Gulf Coast Electric Cooperative, Inc. v. Florida Public Service Commission, 462 So.2d 1093, 1094 (Fla. 1985). Moreover, it is sometimes impractical to set forth in a rule exactly how various relevant factors will be balanced or weighed. Florida East Coast Industries, Inc. v. Department of Community Affairs, 677 So.2d 357, 360-361 (Fla. 1st DCA 1996).

1375. The evidence supports the District's contention that it is impossible to delineate all of the various considerations that might go into the application of the three-prong test. Certainly, permitting rules must be flexible enough to deal with site-specific characteristics and the District should be allowed to exercise professional judgment in dealing with these complex matters. See, Ameriquatic, Inc. v. Department of Natural Resources, 651 So.2d 114 (Fla. 1st DCA 1995). However, under Chapter 120, rules cannot be structured in a manner that immunizes an agency's exercise of discretion from meaningful review.¹⁷³

1376. Rule 40D-2.301(1), F.A.C., sets forth fourteen criteria to be used in evaluating WUP permit applications. It provides as follows:

1377. The introductory language of the rule indicates that applicants must demonstrate compliance with all fourteen criteria on both an "individual and cumulative basis." In actuality, only subsections (b), (c), (d), (f), (g), (h), (i) and (n) involve any cumulative analysis. Pinellas objects because nothing in the rule or the Basis of Review notifies potential applicants that a cumulative demonstration of compliance does not have to be made with respect to all fourteen criteria. While the wording of the rule is somewhat confusing, the remaining criteria by their very nature, can only be applied on an individual basis. Thus, this contention alone is not persuasive. However, there are some more fundamental problems with the current manner in which Rule 40D-2.301 is structured.

1378. The District states that the Conditions for Issuance in Rule 40D-2.301(1) are used to determine whether a permit applicant has met the three-prong test. This is explained in Section 4.0 of the BOR which provides in pertinent part:

1379. Pinellas alleges that Rule 40D-2.301(1) unlawfully enlarges and modifies the three-prong test of Section 373.223, F.S. The District claims the subsections of the rule are merely interpretive criteria that elaborate upon how the District will apply the test. The District asserts that these criteria "serve the purpose and requirements of the Ch. 120 rulemaking provisions by advising the regulated public of agency practices and procedures which are of general applicability and implement interpret, or prescribe law or policy. See, Sections 120.52(16), 120.535 and 120.54." District's proposed Conclusions of Law no. 187, p. 121.

1380. Pinellas' suggestion that consideration of the fourteen criteria set forth in the rule impermissibly enlarges the statutory three-prong test is rejected. The criteria in Rule 40D-2.301 closely track the relevant factors delineated in the State Water Policy in determining whether a use is reasonable-beneficial. See, Rule 62-40.401(2), F.A.C. Furthermore, many of these factors are relevant in determining whether a use is in the public interest. However, the State Water Policy implicitly anticipates a balancing approach where the various factors will be weighed together and the failure to satisfy a single criteria does not necessarily preclude issuance of a permit. Under the District's rule, the failure to satisfy any one criteria apparently results in denial of a permit, yet many of the criteria are only broadly defined.

1381. While the performance standards in the Basis of Review provide elaboration as to how the District will apply certain specific Conditions of Issuance,¹⁷⁴ the District's use of presumptions and the obligation to mitigate impacts "to the satisfaction of the District" mean that only the largest permits are scrutinized for their impact and those permits are issued at the discretion of the District with no clear delineation of the factors to be considered.

1382. For some of the criteria set forth in the rule, there may be a threshold or standard that no permit should exceed. The threshold may depend on the location and nature of the use. Rule 40D-2.301 provides little insight as to how these determinations are made.

1383. The District claims Pinellas is seeking "cookie cutter" certainty as to the outcome of a specific permit application from a reading of the District's rules. The District correctly asserts that such certainty is impossible given the factual, scientific and legal complexity of the issues involved in the permitting program. Nonetheless, the rules must adequately delineate the factors that will be considered in reaching permitting decisions and must provide a reasonable basis for review of those decisions.

1384. Several Petitioners have alleged that the District's use of broad terms such as "unacceptable" or "adverse" impact or "significant environmental impacts" renders a number of the criteria, such as Rule 40D-2.301(1)(c), F.A.C. and the related BOR provisions, unlawfully vague and/or that these terms vest the District with unbridled discretion because no standards are provided. The use of subjective terms such as "significant" or "unacceptable" to describe the types of impacts that are prescribed by the rules does not automatically render the rules invalid. For example, in Humhosco, Inc. v. Department of Health and Rehabilitative Services, 476 So.2d 258, 261 (Fla. 1st DCA 1985) the court rejected a claim that the use of terms such as "normally" and "substantially" rendered rules vague and/or afforded an agency unbridled discretion. Cf., Grove Isle, supra, 454 So.2d 571.

1385. It is appropriate and acceptable for rules to allow for the exercise of professional judgment. See, Ameriquatic, supra, 651 So.2d 114; see also, Marine Industries Assoc. of South Florida, Inc. v. Department of Environmental Protection, 672 So.2d 878 (Fla. 4th DCA 1996) (dealing with statutory terms); cf., Merritt, supra, 654 So.2d 1053. However, the rules cannot allow for the standardless exercise of that judgment without any chance for meaningful review, particularly when scientists do not have a uniform understanding of subjective terms such as "unacceptable environmental impact" or "adverse environmental impacts." Cortes, supra, 655 So.2d 132.

1386. In Ameraquatic, supra, the court upheld a rule establishing criteria for issuance of permits involving control of aquatic vegetation and held that the rule did not vest unbridled discretion in the agency even though there was an absence of weighing factors for application of the criteria. The rule contained a general enumeration of factors to be considered by the agency in applying the broad statutory criteria for issuing aquatic plant management permits. A key factor in the decision was the importance of site-specific considerations.

651 So.2d at 119-20.

1387. Unlike the rule in Ameraquatic, however, the District's permitting rules do not simply delineate the factors that are to be considered and weighed in deciding whether to issue a permit. Instead, Rule 40D-2.301(1) purports to allow the District to deny a permit if an applicant does not provide reasonable assurances that each of the subparts of the rule will be satisfied. The failure to meet certain of the conditions can be mitigated at the sole discretion of the District without any standards to evaluate the District's exercise of that discretion.

1388. In Cortes, supra, the court recognized that discretion is implicit in a broadly written statutory delegation. While the court acknowledged that an agency must have leeway to accomplish the statutory goals, that leeway does not allow an agency to exercise in "rule-engendered standardless discretion."

655 So.2d at 138.

1389. In sum, the District's existing rules do not fully and clearly describe an acceptable regulatory scheme. Rule 40D-2.301 indicates that an applicant must provide reasonable assurances that its proposed water use would on both an individual and cumulative basis, comply with all fourteen of the various sub-parts contained in the rule. From the face of the rule, an applicant's failure to satisfy any of the criteria would preclude the issuance of a permit. However, the District does not always require compliance with all of the conditions and/or it will allow an applicant to mitigate certain adverse impacts as reflected in Rule 40D-2.381(l) and (m). Such mitigation must be "to the satisfaction of the District" without any delineation as to the factors the District will consider in determining sufficient mitigation. Consequently, there is no basis for meaningful review of the District's exercise of discretion. See, Cortes, supra, 655 So.2d 132.

1390. The District suggests that applicants and third parties have an adequate opportunity for review of the District's exercise of its discretion because permitting decisions by the regulatory staff must be ratified by the Governing Board. Thus, according to the District all applicants have an opportunity to make their case before the Board if they believe that the rules are being improperly applied, thereby alleviating any concern regarding unbridled discretion. In support of its position, the District relies upon Metropolitan Dade County v. P.J. Birds, Inc., 654 So.2d 170 (Fla. 3d DCA 1995) where the court rejected a challenge that a county's historic preservation ordinance, which failed to define an "exceptional importance" criterion for designation of certain historical sites, was invalid because it allegedly vested unbridled discretion in the staff of the Historical Preservation Board. In that case, the elected Board of County Commissioners sitting as a legislative body ratified the Historic Preservation Board's determination. Thus, the decision focuses on the delegation from a legislative body to an administrative agency and does not address a situation where the agency's rules are the source of discretion. The court did not address the specific rulemaking requirements and standards of Chapter 120. Thus, the decision is not authority for concluding the District Board's consideration of District staff recommendations on WUP applications is by itself an adequate check against the exercise of unbridled and rule engendered standardless discretion.

1391. As noted in the Findings of Fact, there are a number of general objections that have been raised to the District's implementation of a permitting program through Rule 40D-2.301. While the above conclusions may moot some of the objections, a number of important matters have been raised which are discussed in the subsections that follow.

1. Consideration of Cumulative Impact

1392. Pinellas has alleged that, by requiring applicants to meet the permitting test on an individual and cumulative basis, the District has unlawfully enlarged Sections 373.223 and 373.226. Pinellas contends that both the two-prong and three-prong tests only require an applicant to demonstrate that its own water use will comply with the statutory requirements and that an applicant should not be required to analyze how its own use will combine with other permitted uses. Pinellas acknowledges that Section 373.233 implies that the District can consider cumulative impacts of "competing applications", but argues that the District cannot consider the cumulative impacts of existing permits and pending applications which are not competing.

1393. Pinellas' argument ignores one of the main goals of Chapter 373 which is to protect the water resources. For any regulatory scheme to be effective, there has to be an ability to take cumulative impact into account. Section 373.223 provides that water use should be regulated in the public interest. It is clearly within the public interest to protect environmental resources, and these resources will not be protected in the absence of consideration of cumulative impact. See, Art. II, Section 7, Fla. Const. (1968).

1394. Pinellas alleges that Rule 40D-2.301(1) vests unbridled discretion in the District to determine compliance on a cumulative basis because the rules and the Basis of Review allegedly fail to provide guidance as to what constitutes cumulative impact. The determination of cumulative impact unavoidably involves site-specific considerations which render it impractical to adopt rule criteria that can be applied with "cookie cutter" certainty. See, Ameriquatic, supra, 651 So.2d at 114. The BOR performance standards set forth criteria for determining whether certain types of impacts exceed a de minimis level and are sufficiently adverse so as to be "unacceptable." Unfortunately, under the current rules it is not clear whether such impacts are always unacceptable and/or what factors will be considered in deciding to issue a permit anyway.

2. Regulation without Minimum Levels

1395. Pinellas has challenged several of the District's existing rules, including Rule 40D-2.301(1)(c), on the grounds that they seek to regulate issues such as environmental impacts that can only be addressed through the establishment of minimum flows and levels pursuant to Section 373.042, F.S., and/or through the reservation of quantities of water for environmental and resource protection pursuant to Section 373.223(3), F.S. While minimum flows and levels and the reservation of water are potentially the most effective mechanisms for regulating cumulative impacts, it is erroneous to conclude that these provisions are the only factors the District can consider. See, Sections 373.616 and 373.6161, F.S.

1396. Pinellas' suggestion that the District should not attempt to regulate the withdrawal of water from a resource unless the withdrawal results in a violation of an established minimum flow or level or conflicts with a reservation of water, ignores several important statutory provisions and is rejected. Section 373.219, F.S., authorizes a water management district to "impose such reasonable conditions as are necessary to assure that such use is consistent with the overall objectives of the district or department and is not harmful to the water resources of the area." Moreover, the public interest provision in Section 373.223(1) provides authority to regulate a resource before a minimum level is reached since at that point it may be too late to address certain adverse impacts.

1397. The contention that the only mechanism under Chapter 373 for addressing adverse impacts to environmental resources is through the establishment of minimum flows and levels was rejected in City of St. Petersburg v. Southwest Florida Water Management District, 355 So.2d 793 (Fla. 2d DCA 1977), appeal dismissed, 358 So.2d 129 (Fla. 1978), cert denied, 368 So.2d 1364 (Fla. 1979), in which a writ of certiorari to review an order granting a water use permit was denied. The order contained specific volume limitations on pumpage and reduced the allocation in comparison to the quantity that was used prior to implementation of the regulatory system because the applicant had not demonstrated a need for a reasonable beneficial use beyond the amount specified. The court noted as follows:

Id. at 799-800.

1398. Finally, it should be noted that Pinellas' position could have the effect of shifting the burden of proof from the applicant, who must demonstrate entitlement to a permit, to the District to establish a minimum level for each and every lake, wetland, aquifer, or other environmental resource within the District before it could regulate. Such a result would negate the District's ability to protect environmental resources contrary to one of the clear goals of Chapter 373.

3. Incorporation by Reference

1399. Rule 40D-2.091, F.A.C., incorporates by reference the Basis of Review and contains citations to specific rulemaking authority and laws implemented. The "Specific Authority" and "Law Implemented" provisions of existing Rule 40D-2.091 read as follows:

1400. None of the BOR chapters, sections, or subsections are accompanied by additional references to a specific rulemaking authority or a statute being implemented. Certain Petitioners have argued that a more specific correlation of statutes and rules is necessary and that the existing citation of specific authority is inadequate for the variety of the subjects covered in the Basis of Review.

1401. The Basis of Review addresses a wide-range of issues, but they are all related to the WUP process. So long as the provisions in the BOR fit within the statutory framework and are tied directly to the WUP process, the failure to provide additional references for each provision is not a basis for invalidation. There is no requirement that a specific rulemaking authority and/or law implemented be cited for each provision within a document which is incorporated by reference. The only statutory requirement for adoption by reference is that the document must exist on the date of rule adoption. See, Section 120.54(8), F.S.

1402. The SWUCA Rules include proposed amendments to Rule 40D-2.091 which would add eight citations to the "Specific Authority" and seventeen citations to the "Law Implemented." While these additional citations are helpful, the current references in Rule 40D-2.091, provide adequate authority for a comprehensive permitting program.

4. Section 373.2235, Florida Statutes.

1403. Pinellas alleges that several of the District's rules, including Rules 40D-2.301(1)(h), 40D-2.381(3)(m), and 40D-2.801(2)(e), elevate property boundaries and land ownership to a level not authorized by Chapter 373 and establish an impossible burden of proof because Section 373.2235, F.S., prohibits an applicant from presenting evidence of land ownership. Pinellas' argument misconstrues the intent of the statute. Section 373.2235 prevents an applicant from relying upon the mere fact of acquisition of property for a wellfield or right-of-way as a substitute for a demonstration that the use of the water will be reasonable-beneficial. The proper construction of this provision, read in pari materia with the other provisions of Chapter 373, is that water allocation should be based upon the nature of the use and available supply rather than land acquisition.

5. Use of Presumptions

1404. The District's use of "presumptions" as part of its regulatory scheme has been the source of great controversy in this proceeding. The District contends that it has specified in its BOR that the presumptions are to be applied only as guidelines for screening permit applications to isolate those which need further site-specific review and analysis.

1405. According to the District, Petitioners' objections to the use of presumptions are not well-founded because the presumptions can be overcome by site-specific evidence. The District downplays the significance of the presumptions as follows:

District Proposed Conclusions of Law Nos. 237-238, pp. 158-159.

1406. A permit applicant has the burden of proof and persuasion that it is entitled to a permit through all permit proceedings. Florida Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1st DCA 1981). The BOR presumptions allow a permit applicant to avoid its burden of proof with regard to the environmental impacts associated with its proposal, and/or shift the burden to the District or a third-party challenger to prove that a proposed water use will not meet the statutory permitting criteria.

1407. The District acknowledges that "the presumptions may assist the applicant in making its prima facie case of entitlement to the permit...." District's Conclusions of Law No. 237, p. 158. However, the District claims that "in the case of a third-party challenger, ...the presumptions fall off entirely, and...the analysis becomes site-specific at that point, with the challenger under the burden to present additional site-specific information or show why the available site-specific information indicates that the permit should not issue." District's Conclusions of Law 239, p. 159. This result is not evident from the face of the rules. At a minimum, the current rules are vague and ambiguous as to how the presumptions are to be applied in a contested permitting case. See, Merritt, supra, 654 So.2d 1051.

1408. The District claims that its presumptions are "non-evidentiary". From the face of the rules, however, it is not clear that the presumptions are to be used merely as screening tools. Instead, they purport to establish critical inferences based upon modeled water table drawdowns. The authority of an administrative agency to adopt any evidentiary presumption is open to serious question. Presumptions have been described as follows:

Ehrhardt, Florida Evidence (1995 Ed.), Section 301.1 (footnotes omitted)

1409. Generally, presumptions can be categorized as "conclusive" or "rebuttable". Conclusive presumptions are irrebuttable and even the legislature is prohibited from creating such presumptions. Ehrhardt, Florida Evidence, Section 301.3 (footnotes omitted), citing, Straughn v. K & K Land Management, Inc., 326 So.2d 421, 424 (Fla. 1976) and Savannah, Florida & Western Railroad Co. v. Geiger, 21 Fla. 669 (1886).

1410. As for rebuttable presumptions:

Ehrhardt, Florida Evidence, Section 302.1(footnotes omitted)

1411. From these authorities, it is clear that an agency can never adopt a conclusive, non-rebuttable evidentiary presumption. See e.g., B.L. and R.W.H. v. Department of Health and Rehabilitative Services, 545 So.2d 289, 292 (Fla. 1st DCA 1989); See also, Chandler v. Department of Health & Rehabilitative Services, 593 So.2d 1183, 1184 (Fla. 1st DCA 1992).¹⁷⁵

1412. Pinellas claims based on the authority of McDonald v. Department of Professional Regulation, Board of Pilot Commissioners, 582 So.2d 660 (Fla. 1st DCA 1991), that an administrative agency such as the District cannot adopt any presumptions even if they are rebuttable. "A state executive branch agency lacks implied or inherent power to fashion, adopt, or apply a legal presumption for application in an administrative proceeding in absence of specific authority in a statute or the constitution." Id. at 663. Similarly, in B.R. & W.C. v. Department of Health & Rehabilitative Services, 558 So.2d 1027-1029 (Fla. 2d DCA 1989), rev. denied, 567 So.2d 434 (Fla. 1990), the court stated: "An agency of the executive branch of our government has no authority to formulate an evidentiary presumption." The presumptions invalidated in both of these cases had the effect of aiding the agency in avoiding its burden of proof in proceedings that were penal in nature.

1413. The District claims that an agency has the authority to adopt a rebuttable evidentiary presumption without legislative authorization. See, Austin v. Department of Health and Rehabilitative Services, 495 So.2d 777 (Fla. 1st DCA 1986), (rejecting a challenge to an HRS rule which presumed noncooperation by welfare recipients under certain circumstances; the court emphasized that the opportunity to raise defenses prevented automatic application of the presumptions). In this regard, the District claims that the presumptions in the cases cited by Pinellas were not rebuttable and had to be invalidated. The dissent in McDonald, however, acknowledged that the court's decision limited agencies from adopting even rebuttable presumptions. McDonald, supra, 582 So.2d at 676.

1414. Thus, in proceedings that are penal in nature, the McDonald decision raises serious question as to an agency's authority to adopt presumptions, even if they are rebuttable. It is not clear whether or how this principle should be applied in the permitting context where an applicant has the burden of proof. Arguably, an agency should be allowed, indeed encouraged, to enunciate where possible the thresholds or impacts that will be considered unacceptable. In addition, an agency should be allowed to utilize screening mechanisms that serve to alert the regulated and interested public as to how the agency will process and evaluate permit applications. See, Section 120.535, F.S.

1415. When a screening mechanism is adopted by rule, substantially affected persons are afforded an opportunity to challenge the policy prior to adoption pursuant to Section 120.54(4) or after adoption pursuant to Section 120.56. These opportunities provide some protection from standards that are arbitrary. However, while it may be useful to delineate screening tools in an agency's rules, thresholds based on broad generalizations or correlations should not be used to establish contested facts in an adverserial proceeding. Such a use would shift the burden of proof from the applicant. Only the legislature has authority to fundamentally change the permitting process in this manner. Because the presumptions in the District's BOR are not specifically limited to use as screening tools, they are invalid in their current form. This conclusion is particularly warranted in this proceeding because the evidence established that the BOR presumptions are largely based on scientific generalities and broad correlations. Even when an agency has statutory authority to adopt presumptions, a presumption is only valid when there is a rational connection between the fact proven (i.e., the amount of withdrawal of stream flow) and the ultimate fact presumed (i.e., an acceptable or an unacceptable environmental impact.) See, Straughn, supra, 326 So.2d 421. With respect to virtually all of the District's permitting presumptions, there is no direct or specific connection between the fact proven and the ultimate fact presumed.

1416. The District claims that the broad rulemaking authority granted to it in Chapter 373 is sufficient authority to adopt the BOR presumptions because:

1417. District's proposed Conclusions of Law No. 249, p. 166. However, in Chandler, the court rejected the notion that administrative convenience can serve as a basis for an agency's adoption of a conclusive presumption. Chandler, supra, 593 So.2d at 1184.

1418. It should be noted that in connection with management and storage of surface water (MSSW) permits, the legislature granted authority to the District to create a permitting presumption. See, Section 373.414(3). There is no similar grant of authority in Part II of Chapter 373.

1419. Quoting from Jax Liquors, supra, the District argues that, because the presumptions have been "on the books" since 1989 and there has been no legislative action to overturn them, "[T]he presumption of the Rule's validity gains added weight from its having laid upon the public record in [the] Florida Administrative Code for several legislative sessions without disapproval or interference by either the legislature or its Administrative Procedures Committee." District's Conclusions of Law No. 249, pp. 166-167 quoting from Jax Liquors, supra, 388 So.2d 1306, 1308. The dicta in this decision does not explain how a rule's longevity is to be factored into a rule challenge proceeding under Section 120.56. In such a proceeding, the analysis is ultimately whether the rule constitutes an invalid exercise of delegated legislative authority irrespective of how long the rule has been in existence.

1420. In sum, merely providing that the presumptions can be rebutted by site-specific evidence does not immunize them from challenge. At a minimum, the District's current rules are vague as to how the presumptions should be used. As discussed below, some of the individual presumptions incorporate concepts, such as stage-volume thresholds and streamflow maintenance, which are potentially useful in water resource regulation. It may be appropriate to incorporate some of these concepts into rules as caps or screening mechanisms. However, the wording of the District's current rules impermissibly extend the presumptions beyond an acceptable role.