2009 Florida Legislative Session Recap

On May 8, 2009, after a one-week extension, the Florida Legislature adjourned sine die, bringing the 2009 Regular Legislative Session to a close. What follows is a summary of bills that passed during the 2009 session. Also included are bills of interest which did not pass, but may be considered again during the 2010 session which begins on March 2, 2010. For the 2009 session, 271 bills passed both the House and Senate, specifically 235 general bills, 27 local bills, four concurrent resolutions, three joint resolutions and two memorials. Surprisingly, this represents fewer bills passed than any session since 1998 – 44 percent fewer bills than the 1998-2008 average.

In this issue:

CONSTRUCTION

CS/CS/CS/CS/HB 425 makes numerous changes to the laws relating to the Department of Business and Professional Regulation (DBPR). This bill amends Chapter 455, F.S., to: (1) delete requirements for notarization of license applications; (2) add grounds for disciplinary actions against licensees who fail to report criminal convictions or no-contest pleas within 30 days or who fail to comply or complete or terminate from a drug or alcohol treatment program; and (3) authorize agency representatives to appear in criminal proceedings against licensees. This bill also affects:

• Talent Agents and Talent Agencies (Chapter 468, Part VII)
• Building Code Administrators and Inspectors (Chapter 468, Part XII)
• Professional Engineers (Chapter 471)
• Certified Public Accountants¹ (Chapter 473)
• Realtors (Chapter 475)
• Barbers (Chapter 476)
• Cosmetologists (Chapter 477)
• Architects and Interior Designers (Chapter 481)
• Construction Industry Licensing Board (Chapter 489, Part I)
• Electrical Contracting Licensing Board (Chapter 489, Part II)
• Public Lodging and Food Service Establishments (Chapter 509)
• Boxing Commission (Chapter 548)

Other major features of the legislation include: (1) adding a Division of Services Operations to DBPR, to include the licensee examination functions; (2) directing the Office of Program Policy Analysis & Government Accountability (OPPAGA) to study and make recommendations for laws to provide protection and remedies for unregulated on-line poker; (3) repealing the posting of room rates in lodging establishments; (4) granting greater rights to artists under contract with Talent Agencies; (5) repealing the need for construction-related licensees to have completed a “core code curriculum” regarding the statewide building code; (6) extending statutory notice requirements to owner-builders; (7) exempting manufacturers of commercial food service equipment from licensure requirements as interior designers under limited circumstances; (8) changing requirements for licensing “specialty” contractors; (9) deleting unenforceability of construction contracts for locally unlicensed contractors (including electrical); and (10) deleting statutory references to “certificate of authority” for contractors.

If approved by the Governor, the effective date of this bill is October 1, 2009, except as otherwise expressly provided. 

CS/CS/HB 611 changes some of the requirements of Chapter 255, F.S., relating to local government bidding and contracting for public construction projects to increase the requirements imposed where such work is not publicly procured. Changes include: increasing thresholds for competitive procurement from $200,000 to $300,000 ($50,000 to $75,000 for electrical contracting); adding definitions of “repair” and “maintenance” in an effort to exclude new construction or substantial additional extensions or upgrades exceeding the threshold amounts and 20 percent of the estimated total costs; requiring public availability of estimated costs and allowing qualified contractors to present evidence at a public hearing regarding the estimated project costs; exempting airport and port facilities, as well as public and mass transit systems, where repairs and maintenance are to be performed by local government employees; disqualifying for five years contractors found guilty of certain federal labor or employment tax laws; and indexing threshold amounts to the January 2009 Engineer News-Record’s Building Costs Index (in lieu of the January 1994 Consumer Price Index).

If approved by the Governor, the effective date of this bill is October 1, 2009. 

CS/CS/SB 1552 amends Section 48.23, F.S., regarding the effect of a Notice of Lis Pendens recorded in connection with litigation involving real estate in an effort to improve the enforceability of certain liens, such as construction liens, by: eliminating the adverse effect of a notice on junior liens after the notice has expired or been withdrawn or discharged; extending the time for the holder of an unrecorded lien to intervene from 20 to 30 days; and requiring the court to discharge the notice when the action no longer affects the real estate (such as a transfer of security from the property to a surety bond).

If approved by the Governor, the effective date of this bill is July 1, 2009.

CS/SB 2064 amends portions of Chapter 558, F.S., which requires that a pre-suit notice of a construction defect and an opportunity to cure any such defect be given to a contractor by: adding a definition of “completion” to mean the issuance of a certificate of occupancy (or its equivalent); adding a definition of “service” (in lieu of “receipt”) to include hand delivery, or use of postal or courier services with written evidence of delivery or attempted delivery; adding a statement that the pre-suit notice requirements are not intended to interfere with the property owner’s ability to complete construction that has not been substantially complete (and is not required for a project that has not reached the stage of completion); adding a requirement for restoration when destructive testing has been agreed to, but denying any lien rights for repairs unless agreed to by the property owner; adding a requirement that an owner who refuses to allow destructive testing loses any claim for damages that could have been avoided or mitigated if the owner “thereafter permits” destructive testing; adding a provision that a contractor’s service of the owner’s notice on a subcontractor, supplier or design professional does not constitute an admission of any liability by the contractor (overriding a court decision to the contrary); requiring any requested exchange of documents be made within 30 days; and applying the notice requirement to all contracts for improvements entered into after October 1, 2009, unless the parties have agreed in writing to opt out of these statutory provisions.

If approved by the Governor, the effective date of this bill is October 1, 2009.

CS/SB 2666 creates a new statutory section regarding state construction management contracting, and amends existing Section 255.103, F.S., relating to local government (re-defined to now include school districts, in addition to counties, cities and special districts) construction management programs, as well as the requirements for the acquisition of certain professional services (architects, engineers, landscape architects, and surveyors and mappers) and commodities, and the contracting and construction techniques for educational facilities.

New Section 255.32, F.S. directs and authorizes the Department of Management Services (DMS) to select and contract with general and building contractors, on a competitive basis under current law, to coordinate and supervise a grouping of minor or substantially similar fixed capital outlay state construction projects from conceptual development through final completion, including scheduling, selection, contracting and directing specialty trade contractors and through value engineering. This new statutory authority includes the state (or local governments) entering into a “continuing” contract for construction projects in which the estimated cost of each individual project does not exceed $2 million. For state projects, this section also allows the use of guaranteed maximum pricing and completion dates, if the management entity secures a surety bond. DMS is also given rulemaking authority for the use of such construction services by other state agencies.

For professional service continuing contracts, the current statutory thresholds for estimated total construction cost of each individual project is increased from $1 million to $2 million and from $50,000 to $200,000 for professional services study activity. Advertising is removed from the exemption from competitive bidding for artistic services. Finally, in addition to the current law governing the construction of new educational facilities by competitive bids, design-build or construction management, these techniques will now also be available for remodeling, renovations, maintenance and repairs to existing educational facilities.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

Building Code Changes: No building code bills passed this year, although CS/CS/SB 2100 cleared the Senate Regulated Industries Committee. This is the first year since 2000 that legislation to change Florida’s Building Code has not passed. Therefore, look for this issue to be addressed next session.

Construction Lien Law: There were a handful of bills (SB 466, SB 696, SB 560) filed this session to change Florida’s construction lien law (Chapter 713). None of these bills passed this session, even though the Senate Regulated Industries Committee had issued an Interim Study Report prior to the session suggesting needed reforms to the law.

Construction Industry Licensing Board: Additional DBPR, including the Construction Industry Licensing Board, licensure changes regarding determination of financial responsibility, delivery of continuing education courses and application review procedures (the latter of which have been successfully challenged in court) were filed this session but did not pass. (SB 2598, CS/HB 1413)

Crane Regulation: The regulation of tower cranes (SB 1654, HB 923), to preempt local government regulations (such as those in Miami-Dade County that were partially struck down by court order shortly before this year’s session began), will be back. There is now a new coalition that has banded together on this issue.

EDUCATION

School Voucher Program

CS/CS/HB 453 will expand the funding base for the Corporate Income Tax Scholarship program by offering insurance premium tax credits and some sales tax credits to companies that donate to the scholarship program. Currently, the program offers about 24,000 students scholarships worth $3,950 each, so that low income students can attend private institutions. An OPPAGA report on the scholarship program found that the state saved $1.49 in state education funding for every dollar lost in corporate income tax revenue due to credits for scholarship contributions.

If approved by the Governor, the effective date of this bill is July 1, 2009.

State University Tuition

CS/CS/SB 762 allows Florida’s universities to charge differential tuition rates. The measure came out of a proposal from the Governor to let all of the universities individually raise tuition rates instead of relying on the Legislature to do so. The state university system has long advocated that tuition rates were too low and that the universities could not keep pace with student growth without additional revenue. The bill allows individual universities to raise tuition by up to 15 percent until the national average is reached, based on the needs of the university. To ensure the affordability of higher education, at least 30 percent of the differential tuition must be used for need-based student financial aid, or universities can waive the differential for financially needy students. The university’s board of trustees must use the balance of the differential tuition for improvements in undergraduate education such as attracting and retaining top-notch faculty and researchers. The average national tuition rate for 2007-2008 was $5,390. It is estimated that the total cost of attending a Florida university will increase an average of $400.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

Bright Futures Scholarship Program: CS/CS/HB 719 would have altered the Bright Futures Scholarship Program so that the state would no longer pay for courses dropped after a college or university’s drop/add period. In 2008-2009, the scholarship program received $435 million and served 168,922 Florida students. Approximately 87 percent of in-state freshmen at universities qualify for one of the awards.

Class Size Amendment: The 2002 Constitutional class size amendment approved by voters in 2002 requires schools by the 2010 school year to cap class sizes at 18 students for pre-K through third grade, 22 students for grades four through eight and 25 for grades nine through 12 . SJR 1828 and HJR 919 would have asked voters in 2010 to alter this constitutional provision by allowing schools to meet average classroom size requirements per grade, instead of holding them to the stricter, per-classroom limits that the current law requires.

High School Standards: CS/CS/HB 1293 and CS/SB 2654, called the “21st Century Diploma Initiative,” aimed to raise high school graduation standards and align the requirements for the Bright Futures Scholarship Program with the new graduation requirements. The legislation attempted to raise the current standards for high school students by adopting the requirements for students to take higher level math and science classes in order to graduate, beginning with the 2014 graduating class. The bill passed the House by a vote of 75-42, but eventually died in the Senate.

Mandatory School Attendance: SB 92 would have changed compulsory school attendance from age 16 to 18 in Florida. According to the National Conference of State Legislatures, 26 states set the school drop-out age at 16 and the remaining states set the age at 17 or 18.

Pre-K Degreed Teachers: SB 602 and HB 487 would have required one Bachelor-degreed teacher in every pre-K classroom by 2013.

Teacher Merit Pay: CS/CS/HB 1411, the “Quality Teachers for All Students Act,” was aimed at better appraising and rewarding teachers on the basis of merit. The bill was among the measures being pushed by former Governor Jeb Bush’s education advocacy group. The bill passed the House by a partisan vote of 71-46, but died in the Senate.

Teacher Salaries: Constitutional amendments, HJR 617 and SJR 232, would have set pay for Florida’s teachers at the national average. The national average for teachers is $51,009, while Florida’s average pay is $47,219.

ENERGY

Although Governor Crist designated energy as one of his legislative priorities for the 2009 session, and despite considerable effort on the part of the Florida Senate, no substantive energy legislation was passed. The Legislature’s failure to pass the Governor’s energy package is somewhat surprising, particularly because last year, the Legislature passed a comprehensive energy bill that contemplated that the 2009 Legislature would address and advance substantive renewable energy and climate change policies.

While the 2009 Legislature failed to pass a comprehensive energy bill, it did pass several bills designed to streamline the procedures by which certain energy efficiency and renewable energy projects can apply for federal and state funding.

Florida Energy and Climate Commission

The Legislature passed CS/CS/HB 167 which essentially allows the Florida Energy and Climate Commission (FECC) to continue to administer an energy efficiency appliance rebate program funded by the American Recovery Reinvestment Act of 2009 (Recovery Act) – the federal law that took effect in February 2009. The 2009 Legislature also included monies in the budget which will enable the FECC to administer federal funds made available through the Recovery Act for certain commercially viable energy efficiency and renewable energy projects. More specifically, Florida is expected to receive approximately $174.5 million in federal funding for renewable energy technologies, energy efficiency initiatives, solar rebates and rebates for residential Energy Star products.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Florida’s Innovation Incentive Awards Program

The Legislature passed CS/CS/HB 7031 which confirmed that certain alternative and renewable energy projects are eligible to receive incentives under Florida’s Innovation Incentive Awards Program – a program which allows Florida to compete with other states for major innovation projects that will create significant new jobs and make large capital investments within the state. The bill also clarifies the criteria for alternative and renewable energy projects to receive such funding. However, because of budgetary constraints, state funds under this program are scarce.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

Clean/Renewable Energy: Last year’s energy bill (HB 7135) directed the Florida Public Service Commission (FPSC) to adopt a renewable energy portfolio standard (RPS) Rule requiring electric utilities to supply a percentage of renewable energy to customers from a portfolio of different sources. However, the legislation forbade the RPS Rule from being implemented until it was submitted to and ratified by the Legislature. Pursuant to that directive, the FPSC adopted its RPS Rule and submitted it to the Legislature for consideration and ratification on February 1, 2009. (See FPSC Docket No. 080503-EI) Using the FPSC’s RPS Rule as a catalyst, the Senate passed CS/CS/CS/SB 1154, which, among other things, amended the renewable energy policy in the 2008 legislation by requiring electric utilities to supply a percentage of “clean energy” to customers. In other words, the Senate replaced the FPSC’s RPS Rule with a clean energy portfolio standard (CPS). The Senate defined “clean energy” to include renewable energy, as well as energy produced from nuclear facilities and integrated gasification combined cycle (IGCC) plants with carbon controls. The House refused to take up CS/CS/CS/SB 1154 or HB 7133; thus, the Governor’s energy package ultimately failed. It is anticipated that this issue will be back next session.

Offshore Oil Drilling: The House did pass an energy-related bill – CS/CS/CS/HB 1219 – that authorized the Florida Cabinet to approve offshore natural gas and oil drilling leases in certain areas of the Gulf. However, the Senate refused to take up this measure and thus the legislation ultimately failed. It is expected that offshore drilling legislation will resurface next session.

ENVIRONMENTAL AND LAND USE

Conservation Easements

In 2008, voters ratified a constitutional amendment proposed by the Taxation and Budget Reform Commission which would authorize a real property tax exemption for property held in perpetuity for conservation purposes and a reduction in assessment for property used for conservation purposes. As approved by the Senate, CS/CS/CS/SB 2244 would have made it much easier for property owners to gain a full exemption for property subject to a conservation easement or a reduction in assessment for lands managed for a conservation purpose. Ultimately, HB 7157, the House companion measure with a more conservative approach, was approved by the Legislature. The first part of the bill grants an ad valorem tax exemption to real property subject to a conservation easement held in perpetuity for conservation purposes. Land less than 40 acres in size does not qualify unless the Acquisition and Restoration Council finds the conservation of the property is in the public interest. Income-producing conservation property is only subject to a 50 percent exemption unless all of the income goes toward funding the conservation management plan. Any land qualifying for the federal income tax exemption will also qualify for the state ad valorem tax exemption. The second part of the bill authorizes the property appraiser to take into consideration in its assessment, lands which are used for conservation purposes. Under this approach, lands could be made subject to a 10-year conservation management plan and would qualify for a lesser assessment based on its conservation use. The supporters of this bill believe this will be an important tool in the toolbox for private land conservation for years to come.

If approved by the Governor, the effective date of this bill is January 1, 2010.

Expedited Permitting for Economic Development Projects

HB 73 requires DEP and the water management districts to adopt programs to expedite the processing of permits for certain economic development projects. The bill also provides shorter timeframes for permit application approval or denial.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Florida Forever

In 2008, the Legislature authorized the extension of the Florida Forever program for $300 million per year for 10 years and increased the bonding capacity to make that work. The collapse of the real estate market, however, meant significant decreases in documentary stamp tax revenues which fund the program. With insufficient revenue to fund the bonded indebtedness, the Legislature attempted to withdraw the appropriations in the interim budget passed earlier this year. Governor Crist vetoed that provision of the bill, thus leaving intact the earlier appropriations for Florida Forever. Nevertheless, there were still insufficient revenues to fund the program and bonds have still not been issued for fiscal year 2008-09. In the 2009 Session, the Legislature wrestled with these issues again. The Senate supported full funding for Florida Forever, while the House supported no funding. In the end, the Legislature passed CS/CS/CS/SB 2430 which extends the documentary stamp tax to transfers of beneficial interests in real property effectively overruling the Florida Supreme Court in Crescent Miami Center, LLC v. Florida Department of Revenue 903 So.2d 913 (Fla. 2005). This expansion of the tax should bring in sufficient revenues to fund the $300 million in bonds for fiscal year 2009-10. On the other hand, the 2009-10 Appropriations Act does not fund Florida Forever going forward. DEP and the water management districts have numerous option contracts awaiting funding, so once the bonds are issued from fiscal year 2008-09 and those contracts are closed, then the Florida Forever Program will be in a suspension mode. This is the first time since the authorization of Preservation 2000 in 1990 that new revenues have not been appropriated for environmental land acquisition.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Growth Management

CS/CS/SB 360 was one of the last bills passed during the 2009 session and represents significant changes to the Growth Management Act. If signed by the Governor, the Community Renewal Act will bring sweeping changes to Florida’s urban areas by giving them new tools for urban redevelopment and affordable housing. Last year, proposed changes to growth management ended without agreement between the House, Senate and Florida Department of Community Affairs (DCA) Secretary Tom Pelham. This year, DCA signaled its desire to work with the Senate position while the House passed a bill which would have discarded long time aspects of growth management. All of this discussion was with sunset review of DCA in the forefront. The bill authorizes streamlined review of proposed new development in urban areas and gives relief from transportation concurrency in major urban areas. The centerpiece of the legislation is a new definition for “Dense Urban Land Areas” for cities over 5,000 in population with a density of at least 1,000 people per square mile or a county with a population of at least 900,000 and 1,000 people per square mile. Within these dense urban areas, requirements for transportation concurrency, review of capital improvement plans and developments of regional impact are significantly streamlined. Specifically, local government will not be bound by Florida Department of Transportation (FDOT) level of service standards within transportation concurrency exception areas so that the effect is that they can allow more dense development and more congestion in those urban areas. For schools, the legislation would roll back the current deadline for school concurrency and authorize charter schools and portable classrooms to meet the level of service standards. In a provision designed to save time in the process, zoning petitions would be authorized to be processed concurrently with applications for change in land use. The bill also recognizes that a number of approved projects have been stalled because of the overall economic climate and authorizes a two-year extension of major environmental permits and local government development orders. In addition, the bill has significant provisions relating to affordable housing. One of the new concepts is the Community Lands Trust (CLT) which is authorized to accept federal grants for affordable housing. The bill brings these CLT provisions in line with the federal program. All told, the Community Renewal Act will give urban local governments tools to increase density and promote more economic development with urban service areas. Large, new developments will find approvals more streamlined and projects that have been approved but caught in the recession have an extra two years to wait without having to re-apply.

If approved by the Governor, this bill will become effective upon becoming law.

Impact Fees

CS/CS/HB 227 requires that, in any action challenging an impact fee, the local government has the burden of proving certain elements by a preponderance of the evidence, and prohibits the court from applying a deferential standard.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Permit Extensions

A provision in the growth management bill (CS/CS/SB 360) extends certain permits and approvals for two years. The two-year extension applies to any permit issued by DEP or a water management district under Part IV of Chapter 373, F.S., which has an expiration date of September 1, 2008, through January 1, 2012. This extension includes any local government-issued development order or building permit. The holder of a valid permit or authorization must notify the authorizing agency in writing no later than December 31, 2009, identifying the specific authorization for which the holder intends to use the extension and the anticipated timeframe for acting on the authorization.

If approved by the Governor, this bill will become effective upon becoming law.

Water Resources

SB 2080 provides criteria for the Southwest Florida Water Management District (District) to meet in implementing the West-Central Florida Water Restoration Action Plan (WRAP). The WRAP works with local and regional participants to implement agricultural best management practices (BMPs) and stormwater treatment, restore surface water storage and flows, and maximize use of alternative supplies to further reduce groundwater withdrawals. The legislation requires an action plan and report to the Legislature prior to the 2010 session. If the Legislature takes no action on the plan, it will be deemed approved. The need for funding of the WRAP programs is noted in the legislation.

One of the most significant changes to the District’s regulatory programs is the requirement that the Governing Boards delegate to the Executive Director and his staff, the authority to take final action on permit applications under Part II (Water Use) or Part IV (Environmental Resource Permits) or petitions for variances or waivers of permitting requirements under Part II or Part IV. However, the legislation also provides that recommendations for denial must be referred to the Governing Board for action. A rule governing such referrals must be adopted. Previously, delegation of permitting authority to staff was optional.

Other changes approved by the legislation include revisions to application requirements for water well contractor licensure and a directive to provide model, Florida-friendly landscaping ordinances to local governments.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

Consolidation of Federal and State Wetlands Permitting: CS/SB 2016 and CS/CS/HB 1123 would have directed FDEP to seek general permits in an effort to obtain delegation of federal wetlands permitting.

Contamination Notification: CS/CS/SB 114 and CS/CS/HB 1229 would have expanded contamination notification requirements for certain discharges discovered during cleanup activities.

Permit Streamlining/Regulatory Reform: CS/HB 7143 would have made a number of changes to streamline environmental permitting and regulation.

Springs Protection: CS/CS/SB 274 would have required DEP to delineate the springsheds of specified springs, to adopt spring protection zones and to adopt total maximum daily loads and basin management action plans for spring systems. The bill also would have established stringent requirements for onsite sewage treatment and disposal systems.

Submerged Lands: CS/CS/SB 1012 would have increased lease fees for submerged lands.

Working Waterfronts: Legislation implementing the Working Waterfronts Constitutional Amendment died for lack of agreement between the House and Senate. In 2008, the Taxation and Budget Reform Commission proposed and the voters ratified a constitutional amendment which would require property appraisers to value waterfront real estate on the basis of the use of the land rather than its highest and best use. In other words, a fish house, bait shop, or boat launching facility should be assessed as such rather than its possible highest and best use as a multi-story waterfront condominium. CS/CS/SB 1468 and CS/HB 825 would have created a process and standards for property appraisers to assess working waterfront for ad valorem purposes. While both Chambers passed their version of the bill, they were unable to reach agreement on the last day of the session. According to the terms of the constitutional amendment, the assessment takes effect on January 1, 2010. Since tax bills for 2010 will not be sent out until later next year, the Legislature still has another year in which to reach agreement.

HEALTHCARE

Biomedical Research: CS/SB 1664 increases funding for biomedical research programs and $50 million is provided in the Department of Health budget for funding cancer research.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Prescription Drug Database

CS/CS/CS/CS/SB 462 authorizes Florida to join 38 other states that have established prescription drug monitoring programs. It requires the Department of Health to design and establish a comprehensive electronic database to monitor the prescribing and dispensing of certain controlled substances by December 1, 2010. It also creates a 12-member Program Implementation and Oversight Task Force to monitor the implementation and safeguarding of the system. The bill requires any physician who practices in a privately-owned pain management facility to register the facility with the Department of Health. The legislation requires the pharmacy or dispensing entity to submit certain information no less than 15 days after the controlled substance is dispensed. This system will give access to pharmacies, prescribers or dispensers for information necessary to review the prescription drug histories of patients.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Low Income Pool Council

The Low Income Pool (LIP) Council was created as part of the Medicaid waiver Florida received from the federal government. The LIP Council is charged with dividing up $1 billion to various Medicaid providers throughout the state. CS/HB 285 changes the membership of the LIP Council by increasing the number from 17 to 24 members. One addition is that the Council will be chaired by the Secretary of the Agency for Health Care Administration as a non-voting member. The other six new members are made up of appointees from the Speaker of the House and the Senate President, each having two appointments of which one each must be a trauma center doctor. The remaining two additional members must include a representative from the Department of Health and one from a federally-qualified health center.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Florida KidCare Program

The Florida KidCare Program is part of the state’s Medicaid program that provides insurance to uninsured or low income children. CS/CS/SB 918 makes many changes aimed at providing better access to those children and families in need. One such change was the deletion of a provision that a child be previously uninsured in order to be eligible for the program. The bill also deletes the provision that an applicant must reapply if not enrolled after 120 days. Additionally, the bill reduces the waiting period from six months to 60 days for eligibility for families who have voluntarily cancelled their employer-sponsored or private healthcare coverage.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Medicare Supplement Policies

CS/CS/HB 675, the “Alonzo Mourning Access to Care Act,” places certain requirements on companies that offer Medicare supplement policies in Florida. It requires that insurers issuing Medicare supplement policies to offer on a guaranteed-issue basis to qualified Medicare beneficiaries who are under 65, enrolled in Medicare Part B, are residents of Florida and who qualify for Medicare because of disability or end-stage renal disease. It also allows for insurers to rate under-65 beneficiaries separately from the 65 and over beneficiaries. Additionally, it provides for a six month open enrollment period beginning October 1, 2009.

If approved by the Governor, the effective date of this bill is October 1, 2009.

GAMING

Seminole Indian Gaming Compact

CS/CS/SB 788 sets the parameters for a new Seminole Indian Gaming Compact. Governor Crist had entered into a gaming compact with the Seminole Tribe, which was challenged by the Florida House of Representatives. Ultimately, the Florida Supreme Court declared that the Governor’s compact was unconstitutional. This bill proposes new compact terms that are to be negotiated by the Governor and Seminole Tribe on or before August 31, 2009 and is subject to future Legislative approval. An earlier Senate proposal had called for a wide expansion of gaming at non-Indian facilities, which included the addition of slot machines and blackjack at all existing horse tracks, dog tracks and jai alai frontons, but ultimately the Senate agreed to the House position. The legislation:

• allows slot machines in Broward and Miami Dade Counties and reduced task rates there from 50 percent to 35 percent on slot revenue
• imposes a statewide prohibition on electronic gaming
• allows slot machines at pari-mutuels in counties where voters approve by referendum without an automatic nullification of the Seminole compact
• maintains a prohibition on historic racing at all tracks; historic racing is a relatively new product; terminals randomly select a race from an archive of thousands of tracks from across the country, then customers have an opportunity to review the odds and statistics for each horse prior to placing their bets
• allows no-limit poker at existing pari-mutuels; hours are also extended to 18 hours a day/Monday-Friday and 24 hours per day on the weekend

The bill is contingent upon the Governor and a representative of the Seminole Indian Tribe executing an Indian Gaming Compact, which must then be ratified by the Legislature.

INSURANCE

Citizens Property Insurance Corporation

CS/CS/CS/HB 1495 changes the rates that can be charged by the state-run Citizens Property Insurance Corporation. In January 2007, the Legislature imposed a rate freeze upon Citizens until early next year. Many were concerned that once the freeze expired, Citizens’ rates would rise to the market levels which would result in significant increases in the monthly premiums paid by homeowners in high-risk areas. In response, the Legislature implemented a rate “glide path,” which caps Citizens’ rates at 10 percent per year until Citizens’ rates are actuarially sound. Proponents hope this change will encourage homeowners to seek insurance in the private market which will result in fewer policies being written by Citizens and thus limiting the liability the state could face in the event of another major hurricane or disaster.

If approved by the Governor, this bill will become effective upon becoming law.

Property Insurance

CS/CS/HB 1171 provides consumers with the opportunity to purchase property insurance that is not regulated by the Office of Insurance Regulation (OIR). Currently, OIR reviews and must approve insurance rates before a policy can be offered in the market. Prior to the 2009 session, this procedure drew much attention due to State Farm’s announcement that it would no longer be writing property insurance policies in Florida due to what it perceived as OIR’s unfair refusal to approve its rate increase. This legislation, referred to as the “State Farm bail-out bill,” will allow consumers the ability to purchase a homeowner’s insurance policy that does not require an OIR determination as to whether the rate is excessive or unfairly discriminatory. While certain disclosures must be made, these policies will allow consumers to remain with State Farm or other carriers, despite the fact that their rate may be much higher than those approved by OIR. While the bill passed easily in the House and Senate, many believe the Governor will ultimately veto this bill.

If approved by the Governor, this bill will become effective upon becoming law.

Surplus Lines

CS/HB 853 clarifies the regulatory requirements for surplus lines insurance. Surplus lines refer to a category of insurance for which there is no market available through standard insurance carriers. There are currently 166 surplus lines insurance companies which are writing insurance in Florida. Most of the statutory provisions relating to insurance regulation are contained in Chapter 627, F.S. Historically, surplus lines insurance companies have not abided by the same insurance regulatory requirements due to an exemption in Chapter 627, F.S. However, the Florida Supreme Court and U.S. Court of Appeals for the Eleventh Circuit recently determined that surplus lines insurers were required to comply with all the insurance regulatory requirements in the Insurance Code. In response to these decisions, the Legislature passed legislation clarifying that surplus lines insurance is exempt from Chapter 627, F.S.

If approved by the Governor, this bill will become effective upon becoming law.

Bills That Did Not Pass:

SUSORP: SB 600 and HB 621 would expand the current number of provider companies for the State University System Optional Retirement Program (SUSORP) from five to seven.

Autism Spectrum Disorder: SB 308 involved developmental disabilities and would have required a physician to refer a minor to an appropriate specialist for screening for autism spectrum disorder or other developmental disability and inform the parent or legal guardian of the right to direct access to that specialist under certain circumstances did not pass. The bill also would have required certain insurers and HMOs to provide direct patient access to an appropriate specialist for screening, evaluation of, or diagnosis for autism spectrum disorder.

Mental and Nervous Disorders: SB 354 revised the requirements and limitations for optional health insurance coverage for mental and nervous disorders. Additionally, the bill would have repealed a specified provision relating to optional coverage required for substance abuse impaired persons.

STATE AND LOCAL TAXES

Corporate Income Tax “Piggyback”

The annual corporate income tax “piggyback” bill was adopted bringing Florida’s income tax law into conformity with federal law as of January 1, 2009, except that the legislation adopted will not allow for bonus depreciation or for the deferral of cancellation of debt income as provided in the American Recovery and Reinvestment Act of 2009. However, CS/SB 2504 will allow for subtractions from Florida taxable income in subsequent years to ultimately allow taxpayers to take a deduction for these items.

If approved by the Governor, this bill will become effective upon becoming law and shall operate retroactively to January 1, 2009.

Corporate Income Tax Bonus Depreciation

Early in the 2009 session, the Legislature addressed issues that arose from 2008 legislation that excluded the bonus depreciation provisions contained in Sections 102 and 103 of the Economic Stimulus Act of 2008 from the annual piggyback. SB 1112 allows taxpayers to make Florida subtractions for that depreciation in later years in accordance with regular depreciation provisions.

These provisions were approved by the Governor and took effect on March 17, 2009, and shall operate retroactively to January 1, 2008. Chapter 2009-18, Laws of Florida

Copy of Chapter Law

Property Tax Burden of Proof

CS/CS/HB 521 changes the burden of proof in ad valorem tax challenges to lessen the burden imposed on taxpayers challenging assessments. The legislation expressly rejects the “every-reasonable-hypothesis” burden previously imposed on taxpayers and instead adopts a preponderance of the evidence standard.

If approved by the Governor, this bill will become effective upon becoming law and shall first apply to assessments in 2009.

Property Tax Constitutional Amendment

CS/SJR 532 will place proposed amendments to the Florida Constitution on the ballot in 2010 that would, if approved by voters: (1) lower the cap on assessment increases for non-homestead property from 10 percent to 5 percent; and (2) provide a partial tax exemption for first-time home buyers.

If approved by the Governor and the voters in 2010, the constitutional amendment reducing the limit on the maximum annual increase in the assessed value of non-homestead property will take effect January 1, 2011. The amendment providing for an additional homestead exemption for persons who have not owned a principal residence within an eight-year period shall take effect January 1, 2011, and shall be available for properties purchased on or after January 1, 2010. 

Documentary Stamp Tax

CS/CS/CS/SB 2430 & SB 1960 will limit, if not eliminate, the ability to avoid the documentary stamp tax on deeds by way of transfer of realty via the transfer of the entity that owns the realty. The legislation was adopted in direct response to the Florida Supreme Court decision in Crescent Miami Center LLC v. Department of Revenue, 903 So.2d 913 (Fla. 2005), which held that no documentary stamp tax is due on a deed transferring unencumbered real estate between related parties. Because Florida does not tax transfers of ownership interests in entities, this decision provided an opportunity for avoiding the deed transfer tax altogether. The legislation will impose tax on the transfer of ownership interests in “conduit entities” when realty was transferred to such an entity by its owner within three years of the transfer of the interest in the entity. The legislation applies to ownership transfers of conduit entities to which realty is first transferred after July 1, 2009.

If approved by the Governor, the effective date of this bill is July 1, 2009, and the amendment to s. 201.02(1), F.S., made by this act, applies to transfers for which the first transfer to a conduit entity occurs after July 1, 2009. 

Tobacco Surcharge Tax

CS/CS/SB 1840 imposes a $1 per pack “surcharge” on cigarettes and a “surcharge” on other tobacco products equal to 60 percent of the product’s wholesale price. Revenues from the surcharges are to be deposited into the Health Care Trust Fund. The surcharges will be imposed on all products in dealer inventories on July 1, 2009.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

Corporate Income Tax: There were a variety of other proposed corporate income tax changes which did not pass such as adoption of a “water’s edge” unitary tax contained in SB 2270 and HB 1247 and the throw-out provisions and add-backs for expenses attributable to intangible assets and using customer-based sourcing for receipts contained in CS/SB 2546 and HB 7155.

Internet Sales: HB 579, SB 1970 and SB 2518 addressing the taxation of hotel rooms purchased over the Internet through on-line travel companies failed this session.

Repeal of Sales Tax Exemptions: As in 2008, there was discussion of repealing sales tax exemptions and the House Finance & Tax Committee did actually review a number of existing exemptions. However, no exemptions were repealed during the 2009 session. (HB 7159, HB 51, HB 225, HB 863, SB 300, CS/SB 618, SB 1362, CS/SB 2376)

Sales Tax Holidays: Legislation was proposed in 2009 to authorize sales tax “holidays” for clothes, school supplies and hurricane-preparedness items. However, as in 2008, the legislation failed to pass. (SB 396, HB 595, HB 815, SB 214, HB 373)

Streamlined Sales & Use Tax: Florida lawmakers continued to balk at adoption of the Streamlined Sales & Use Tax for fear that it could be construed as a tax increase. HB 329 and SB 1134, proposed to bring Florida law into compliance and adopt the Streamlined Sales & Use Tax, failed.

Tax Administration: As in 2008, the Department of Revenue’s “administrative bill” failed to pass during the 2009 Legislative Session. CS/SB 2578 and HB 7155 included a variety of primarily administrative changes although one provision would have made substantive changes to the law relating to sales tax transferee liability.

TRANSPORTATION

Omnibus Transportation Bill

HB 1021 is the omnibus transportation bill. It addresses many different issues relating to the Florida Department of Transportation. This bill, among other things:

• provides for improved integration of airport planning and adjacent land use as part of the comprehensive planning process
• exempts certain port-related industrial or commercial projects from development of regional impact review
• authorizes transportation concurrency backlog authorities to issue bonds and, upon agreement of all taxing authorities, exceed the 25 percent ad valorem tax increment rate
• authorizes FDOT to pay stipends to design-build firms that submit responsive proposals for construction contracts
• requires a contractor to maintain, but not record, a payment and performance bond prior to beginning work on a transportation construction contract
• adds exemptions to the requirement that a utility relocate its facilities at its own expense
• provides for installation of public pay telephones, and related advertising, within certain rights-of-way
• requires interoperability of electronic toll collection systems on new limited access facilities or existing transportation facilities with FDOT’s electronic toll-collection system
• provides for tolling of high-occupancy toll lanes or express lanes on I-95 in Broward and Miami-Dade Counties, and authorizes FDOT to request the issuance of bonds secured by such toll revenues
• prohibits the tolling of any portion of an interstate highway where tolls were not charged as of July 1, 1997, other than high-occupancy toll lanes or express lanes, and not including the Florida Turnpike
• provides for use of new technologies and process by the Florida Turnpike Enterprise in its collection of tolls
• eliminates the requirement for equalization of tolls on the Florida Turnpike
• increase from $100 million to $250 million the limit on the amount of projects funded by other governmental entities that may be added FDOT’s work program
• creates a loan program for certain small county projects not included in the adopted work program
• changes the notification process for amendments to the adopted work program
• provides for a transportation study of alternatives parallel to I-95
• abolishes the Tampa Commuter Transit Authority
• amends provisions making it illegal to race on highways

If approved by the Governor, the effective date of this bill is July 1, 2009.

Seat Belts

CS/SB 344, which is titled the “Dori Slosberg and Katie Marchetti Safety Belt Law,” amends the existing Florida Safety Belt Law to provide for primary enforcement of violations by operators and front seat passengers over the age of 18 years of age. This will allow law enforcement officers to stop motorists on the sole basis that the operator or front seat passenger is not wearing their safety belts. The law currently provides for primary enforcement only with respect to passengers under 18 years of age with all other violations subject to secondary enforcement. The bill also removes an exemption for passengers in the front seat of a pickup truck where the number of passengers exceeds the number of safety belts installed.

The bill was approved by the Governor on May 6, 2009, and will take effect on June 30, 2009.
Copy of Chapter Law

Airport Wildlife Management

Wildlife strikes against airplanes not only pose a serious hazard to human life, but can result in significant costs to civil aviation. Complex, and sometimes inconsistent, laws and regulations make it difficult for airports to properly manage wildlife. CS/HB 1065 creates Section 370.2293, F.S., titled the “Airline Safety and Wildlife Protection Act of Florida.” The Act provides an airport authority or entity owning an airport with immunity from any administrative or civil penalty, restriction or sanction with respect to any authorized action taken for the purpose of protecting human life or aircraft safety from wildlife hazards. An authorized action is defined as one taken pursuant to the airport’s wildlife hazard management plan as approved by the FAA, or an action taken pursuant to other specified governmental permits, orders, or regulations. The immunities of the Act extend to officers, employees, contractors, or employees of contractors, as well as the governing body of an airport, provided such actions are authorized. However, there is no immunity from liability with respect to intentional or negligent torts.

If approved by the Governor, this bill will become effective upon becoming law.

Motor Vehicle Accident First Responders

CS/SB 2282 prohibits a county or municipality from imposing a fee or seeking reimbursement for costs or expenses incurred by first responders handling motor vehicle accidents, except costs associated with the cleanup of reportable quantities of hazardous materials. As used in the bill, the term “first responder” includes law enforcement officers, firefighters, emergency medical technicians and paramedics, whether employed as such or as a volunteer.

If approved by the Governor, the effective date of this bill is July 1, 2009.

Bills That Did Not Pass:

SunRail: CS/CS/SB 1212 and HB 7009, proposing a Central Florida commuter rail system, did not pass this session.

Red Light Cameras: CS/CS/CS/HB 439 and CS/CS/CS/SB 2004 would have authorized the use of red light cameras for traffic enforcement on a statewide basis.

KEY:

Committee Substitute (CS) – A Senate or House bill going through the committee hearing process sometimes has numerous amendments, or the amendments change the original concept of the bill. In these instances the bill is rewritten and becomes a “committee substitute.” The next committee of reference may again rewrite the bill, and more than one bill may be combined. The committee substitute continues to carry the identifying number(s) of the original bill(s) filed. A CS/CS is a Committee Substitute for Committee Substitute.

Enacted – The Florida State Constitution requires that each bill be prefaced by the phrase: “Be It Enacted by the Legislature of the State of Florida” which is referred to as the enacting clause. Enacted legislation refers to a bill which has been passed into law.

Enrolled Bill (ER) – A Senate or House measure approved by both houses and signed by the legislative officers which is then sent to the Governor for action and transmittal to the Secretary of State or filed directly with the Secretary of State. The bill is enrolled in the house of origin under the supervision of the Secretary of the Senate or the Clerk of the House.

Joint Resolution (SJR, HJR) – A resolution that is the only authorized method by which the legislature may propose amendments to the Florida Constitution. If passed, the proposed amendment would appear on a statewide ballot for voter approval or rejection. It must pass each house by a three-fifths vote of the membership.

Law – An act becomes a law when the Governor either approves it or fails to sign or veto it within the period specified in the Florida State Constitution. An act also can become a law when a subsequent legislature overrides a veto by the Governor. While the legislature is in session, the constitution allows a seven-day period following presentation of a bill to the Governor within which the Governor can sign, allow to become law without his signature or veto the bill. If the legislature adjourns sine die before an act is presented to the Governor or while an act is in the Governor’s possession, the Governor has 15 days following the date of presentation in which to take action. The identifying number assigned by the Secretary of State to a bill that has been enacted or passed into law is referred to as the Chapter Law. The Chapter Law number indicates the year passed and the printing number. For example, Chapter 2009-100 represents the 100th law printed in the year 2009. Chapter laws are compiled and published annually in the Laws of Florida.

¹ See also SB 1640 for major changes in Chapter 473 regulating public accountants.