AIF Weekly Update From March 16, 2007

The second week of the 2007 session came to an end with the inaugural meeting of the Taxation and Budget Reform Commission (TBRC) on Friday, March 16th.  This constitutionally created commission is tasked with examining Florida's current tax system and making recommendations for ways to improve upon existing policies.  The Commission has the constitutional power to directly place amendments on the ballot for approval by Florida's citizens.  The Commission is composed of 25 members from diverse backgrounds, including elected officials. 

On Friday, the Commission members unanimously elected former Speaker of the House Allan Bense as Chairman and former Senate President Jim Scott as Vice-Chair.  The Commission also established an "organizational" committee that will establish the Commission's rules of procedure as well as select a staff.

Chairman Bense also announced the Commission will remain in an organizational posture until after the current legislative session is over in order for the Commission to react to any of the Legislature's actions.  The next meeting of the TBRC will be Friday, April 13th at 10:00 am.

In this week's report you will find the latest on the property tax debate as well as an important report on HB 733.  This bad bill promises to undermine the repeal of Joint and Several Liability.

Legal Reform

In 2006, Florida's business community reaped the rewards of over 30 years of legislative battles, in successfully and completely abolishing the doctrine of Joint and Several liability from Florida's comparative fault system, which governs all negligence cases. Unfortunately, that victory is already being threatened by the trial bar and on Wednesday, March 14th, some House members voted favorably for legislation that would effectively place the judiciary back in a posture of unfairness, similar to what existed before last year's victory.

The House Constitutional and Civil Law Committee, led by Chairman Marcello Llorente (R-Miami), passed HB 733 by Representative Mitch Needleman (R-Melbourne) on a 5-3 vote. HB 733 would prohibit defendants to a lawsuit from allocating any portion of liability or fault to any person or entity who is not a formal defendant to the lawsuit, whether or not the other entity actually caused the harm involved in the case. Current law was originally developed in 1993 by the Florida Supreme Court and was codified by the Florida Legislature in 1999. Last year's legislation to abolish joint and several liability only complimented that established course of jurisprudence.

If HB 733 were to become law, it would completely alter the way individuals and businesses, particularly those who are not fully responsible for harm but have perceived deep pockets, defend themselves in negligence cases. If current law is changed, defendants rather than plaintiffs would now bear the burden of proving that they were not responsible or only partially responsible. Current law places the burden on the plaintiff to prove their cases to the jury. This bill, however, places an onerous and unfair burden on businesses. The business community does not support any changes to current law. The business community is united in its opposition to this bill and to any amendments that are offered as its compromise. Current law does not need to be changed and this bill should be opposed.

View testimony by AIF General Counsel, Tamela Ivey Perdue.

There were 3 members of the committee who stood out as heroes for AIF and the business community. They are Vice Chair Representative Dorothy Hukill (R-Daytona Beach Shores), Representative Dave Mealor (R-Lake Mary) and Representative Anitere Flores (R-Miami). AIF salutes Representatives Hukill, Flores and Mealor for their NO vote on HB 733. Please contact these legislators and let them know how much you appreciate their courage and commitment to preserving and protecting fairness in Florida's judicial system for all individuals and businesses.

Wednesday's meeting was only the first committee of reference for this bill. So the fight will continue and AIF will continue to lead the charge to protect our current law. Please contact the members of the House Safety and Security Council, the bill’s next stop, and urge those legislators to oppose this bill.

Property Insurance Reform

On Wednesday, March 14th the Senate Banking and Insurance Committee heard a presentation from Garrett Walton, Chair of the Windstorm Mitigation Study Committee today.  The Windstorm Mitigation Study Committee was commissioned by the Legislature during the recent 2007 Special Session on Property Insurance Reform.  The study committee was asked to analyze short and long term solutions and programs that addressed Florida’s need to harden homes throughout the state.  The committee specifically looked at ways to improve the “My Safe Florida Home Program” (the state’s mitigation grant program) and for ways to enhance funding for mitigation through public and private methods.  Chief among the study committee’s recommendations was for the Legislature to fund additional research on mitigation techniques.  This additional research would help determine what techniques produce the most bang for the buck and it would help private insurance companies to apply the appropriate discount credits for homeowners that applied these techniques when hardening their homes.  Currently, the data available is from a 2001 study and is now outdated since it does not include the loss data from the unprecedented 2004-2005 hurricane season. 

Following Mr. Walton’s presentation, Chairman Bill Posey (R-Rockledge) emphasized that the focus “needs to be on 'best bang for the buck' items.”  Senator Posey will ask committee staff for recommendations, which can be moved quickly, and put into a proposed committee bill.   Senator Posey also said the Committee should consider requiring Citizens Insurance Company to require homeowners to undertake certain mitigation additions, such as storm shutters, in order to be eligible for insurance coverage through Citizens.  According to Senator Posey, the costs of mitigation will be recovered over time and he encouraged personal responsibility to harden one’s home.

On Thursday, March 15th the House Insurance Committee considered and approved proposed council bill JEC3 Relating to Mitigation this morning.  The 2006 Legislature created the “My Safe Florida Home” Program to promote home hardening and to administer a $250 million home inspection and mitigation grant program.  One of AIF’s top priorities is the improvement of this program to better meet the goal of reducing potential damage from hurricanes.  AIF strongly believes that mitigation is the ultimate long-term solution for the property insurance crisis. 

The bill includes several of AIF’s recommendations, which will streamline and partially privatize the program, resulting in a substantial increase in the number of homes inspected.  Furthermore, the bill should help get the grant monies into the hands of homeowners to help pay for recommended home improvements.  Home-hardening improvements, such as installation of shutters and roof tie downs, will substantially increase a home’s ability to withstand hurricanes.  The program to date has only completed 14,000 of a projected 66,000 annual inspections in the past year and has only provided 960 grants of a possible 50,000 which could be funded by the $250 million.

Property Tax Reform

On Friday, March 16th the House Policy & Budget Council debated one of the two major components of its property tax reform plan.  HB 7001 Relating to Ad Valorem Tax Millage by the House Government Efficiency & Accountability Council was passed on a 25-7 vote (three Democrats sided with the Republicans) after nearly 7 hours of debate and public testimony.  Essentially, HB 7001 proposes a property tax rate roll-back to 2000-2001 levels.  The rates would then be adjusted forward by accounting for population growth and inflation.  The bill was presented by House State Affairs Committee Chairman Frank Attkisson (R-Kissimmee) and was amended at the beginning of the meeting to address three major exemptions to the original bill.  Representative Bill Galvano (R-Bradenton) offered the amendment, which was adopted, that exempts all fiscally constrained counties (currently there are 30 fiscally constrained counties), all children services special districts, and all hospital districts from being affected by the rate roll-back. 

HB 7001 is now ready to be heard on the floor of the House, and we expect that it will be on the calendar sometime this week.  In addition, the House Policy & Budget Council will debate the second component of the House’s property tax reform plan, a constitutional amendment that would eliminate property taxes all together in exchange for a 2.5% increase in sales tax, at its next meeting on Friday, March 23rd.

Taxation

On Thursday, March 15th the House Jobs & Entrepreneurship Council heard HB 567 Relating to the Communications Service Tax (CST) by Representative Ron Regan (R-Sarasota).  This bill is one of AIF’s top priorities for the 2007 session because it lowers the tax on communications services by 1.17%.  This includes business land line telephone service, all wireless service, cable TV service and Satellite TV service.  Reducing this tax is critical to the business community because Florida’s CST (currently at 9.17%) is among the highest in the country.  Econometric models have shown that lowering this regressive tax will help stimulate additional investment in Florida’s communications infrastructure.  As prices go down, spending on communications services goes up.

An amendment by Representative Reagan was adopted that decreased the reduction from 1.17% to 0.25%.  This was done in order to match Governor Charlie Crist’s (R) budget proposal.  With budget projections falling way shorter than anticipated, even achieving this small reduction will be a challenge.  Chairman Reagan and House Speaker Marco Rubio (R-Miami) are showing their strong support of this tax cut by moving the bill forward regardless of the project budget shortfalls. 
On Friday, March 16th the House Policy & Budget Council approved HB 567.  Committee members where anxious to finish their long agenda, as such very little debate took place and no questions were asked of the bill sponsor.
HB 567 is now ready to be considered for final passage by the full House of Representatives.

Legal & Judicial

On Wednesday, March 14th the House Courts Committee unanimously passed HB 1167 by Representative David Simmons (R-Altamonte Springs). The bill sponsor intends to establish legislatively-funded business court divisions in the Ninth, Eleventh and Thirteenth Judicial Circuits of Florida. These court divisions have already been established by administrative orders by the chief judge of each circuit. The business courts will be authorized to decide complex business cases on a judicially enforced docketing schedule.

AIF has worked with Representative Simmons and the state's circuit judges to draft and refine this legislation. This bill is important to the business community because it will provide more predictable and quicker resolution of complex business cases, ultimately lowering the cost of doing business in Florida.

HB 1167 will now be heard by the House Policy and Budget Council.

State-Issued Cable Franchises

On Friday, March 16th the House Policy & Budget Council passed HB 529 Relating to Cable TV/Vide Service Franchises by Representative Trey Traviesa (R-Tampa).  This is one of AIF’s top priorities for the 2007 session and we congratulate Rep. Traviesa for his ability to work with all interested parties in making HB 529 one of the most pro-consumer bills of this year’s session.  The bill establishes the authority to issue statewide cable and video franchises within the Department of State (DOS) and designates DOS as the state franchising authority. The bill removes local government authority to negotiate cable service franchises.

During his presentation, Representative Traviesa stated that his bill “acknowledges the primacy of consumers” to be able to have a choice in the cable television market.  In addition, he stated that Floridians should see “between 15 - 41% reductions in their cable TV bills.”  These reductions would average between $400 to $600 million dollars in savings statewide.  According to the bill sponsor, increasing competition in the cable TV market would also increase and provide for new investments in infrastructure that would benefit all Floridians and bring the newest and best technology to all citizens regardless of race or socioeconomic status.  Several amendments were adopted that strengthened the non-discrimination language and improved sections of the bill dealing with impairment of contracts.  In addition, the bill was amended to provide for automatic enrollment for the state’s “Lifeline” program.  “Lifeline” is a program whereby the state provides economic assistance for Floridians who cannot afford basic telephone service.  This amendment was a priority of AARP and the Governor’s Office.

There was some concern on whether this new franchise process unfairly benefited the non-incumbent providers who were looking to get new franchises and whether the new providers would still provide the same number of public, educational, and government (PEG) channels.  Representative Traviesa explained that those providers currently holding franchise agreements would be able to take advantage of the same benefits created in the bill as those who were looking to enter the market.  In addition, he assured committee members that under the bill, new providers would have to offer the same number of PEG channels as those who are currently providing cable TV service.

HB 529 is now ready for final passage and will be considered on the House floor.

Health Care

On Tuesday, March 13ththe House Health Quality Committee unanimously passed HB 1121 Relating to the Florida Health Information Network by Representative Denise Grimsley (R-Sebring).  HB 1121 creates the Florida Health Information Network Corporation as a public/private partnership that will establish a secure, privacy-protected, and integrated statewide network for the communication of electronic health information.  The not-for-profit corporation will be managed by a board of directors that will consist of 15 members. 

One of the few concerns with this bill is the issue of privacy.  Committee members want to be reassured that a patient's privacy is well protected.  This bill is very important to the Speaker, as it is one of his 100 ideas.  Full implementation of the network will likely reduce the cost, and increase the quality, of health care by promoting continuity of care among providers and potentially reducing unnecessary treatments.  In addition, successful implementation of this proposal would encourage the adoption of electronic medical records throughout the state, thereby ensuring that a patient’s medical history will remain safe in the event of a hurricane or other natural disaster.

HB 1121 will now be heard by the House Policy and Budget Council.

Identity Theft

On Wednesday, March 14th the House Homeland Security & Public Safety Committee held a workshop on HB 1117 Relating to Personal Identification Information by Representative John Legg (R-Port Richey). The bill amends current law dealing with identity theft by enhancing the penalties for those individuals who willfully and without authorization fraudulently use personal identification information concerning an individual who is 65 years of age or older. In addition, the bill provides that any person who willfully possesses “sensitive personal information” concerning an individual without first obtaining that individual’s consent commits a third degree felony. The term “sensitive personal information” is defined to mean any name or number that may be used, alone or in conjunction with any other information, to identify a specific individual including bank account numbers, credit or debit card numbers, etc.

Nick Iarossi testified on behalf of several business groups and AIF and informed the committee that the business community would be working with the bill's sponsor to find some compromise. One suggestion presented by Mr. Iarossi was that the sponsor considers adding the term “fraudulently” in order to distinguish between an entity that uses this personal information legally and those who possess this information for illegal purposes. In addition, Mr. Iarossi pointed out that the Legislature had passed legislation last year, which allows citizens to place a credit freeze on their accounts if they suspected they were victims of identity theft. This ability to freeze your credit is one of the strongest ways to counteract identity theft.
HB 1117 was temporarily passed and Chairwoman Sandy Adams (R-Oviedo) urged all interested parties to work with the sponsor to come up with a consensus product.