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Issue 12: May 12, 2008
Topic 1: Federal Flood (But Not Wind) Bill
By a vote of 73-19, the United States Senate voted against an amendment to expand the National Flood Insurance Program (NFIP) to include windstorm coverage. Florida Senators Martinez and Nelson voted in favor the measure, which was passed by the United States House of Representatives as part of the NFIP reauthorization bill last year.
Currently 2.1 million Florida residents maintain flood insurance through the federal flood insurance program, comprising over 40 percent of policy holders nationwide. The current NFIP will expire in September, but the legislation in question would extend the program through 2013.
The bill would have also established a panel to study how best to establish a national catastrophe insurance program, one of Governor Crist's federal priorities. Senator Martinez told the Council of 100, at their meeting in Washington last Friday, that the defeat of the amendment caused Senator Nelson to pull from consideration an amendment to establish a National Catastrophe Fund. Based upon the defeat of the windstorm amendment, Martinez, a proponent of the measure, pronounced the catastrophe fund dead in the U.S. Senate.
Bottom Line: Without windstorm coverage, the National Flood Insurance Program is not good on balance for Florida. The Sunshine State provides a high percentage of the premiums, but receives back a much smaller percentage, as Floridians seldom make claims on their flood policies. Senators from inland states have little sympathy for Florida and other Gulf states susceptible to hurricanes. Unlike the House where large states receive proportional representation, small population inland states have power equal to Florida in the Senate.
As Senator Martinez predicted, despite his and Senator Nelson's good work, a national catastrophe fund, or adding windstorm coverage to the federal flood program, are measures that are likely dead in the current environment. In the absence of a national fund, look for Governor Crist to seek a regional fund comprised of Gulf States.
Topic 2: Citrus Canker
The first in a series of cases dealing with the destruction of a total of 16.5 million citrus trees to stop the spread of citrus canker saw its day in court last week. In Broward County, more than 133,700 citrus trees were destroyed as part of an effort by state officials to stop the spread of the citrus canker bacteria.
Fruit from trees infected with citrus cankers can still be eaten or used for the production of juice, but the fear that an uncontrolled spread of the bacteria could cripple Florida's citrus industry caused the state, in this case, to remove every citrus tree within 1,900 feet of an infected tree.
Last week, a group of 58,000 homeowners were awarded $11.5 million in damages for the lost trees. The award amounts to $86 per tree. An attorney representing the homeowners argued the payment did not amount to full compensation, required by the Constitution in cases where private property is taken for a public purpose. The homeowners determined full compensation as a range from $280 for a six-foot tree to $930 for a ten-foot tree. The Department of Agriculture, for its part, maintains the trees have no value after their exposure to the citrus canker bacteria.
Bottom Line: Look for an appeal by both the Broward homeowners and the state of Florida, as this case will likely set precedent for later cases in Palm Beach, Miami-Dade, Orange and Lee Counties.
Topic 3: New Protections for Condo Owners
Governor Crist recently signed legislation that provides expanded protections for members of condo associations throughout Florida. The bill gained notoriety in the last few weeks of the 2008 Legislative Session, when prior to passing, Florida House members heard the nearly 100 page bill read aloud in full during a session standoff that lasted for more than twelve hours.
The new legislation, dubbed by South Florida Business Review as the largest overhall in condo rules in more than 15 years, requires condo associations to provide 30 days notice before filing a lien against a unit owner. The new law also protects owners from association directors who have been charged with a felony, makes items easier to agenda for association meetings and makes meeting records more accessible to owners. Also, condo associations may have the ability to exercise emergency powers in the event of a hurricane or other natural disaster.
While condo residents obtained more rights under the new legislation, the fees paid by condo residents were swept, in part, to help fill the budget shortfall. The Florida Legislature swept $10 million from the $29 million Condo Fund to support other state programs. The funding, generated through a $4 annual fee on condominiums in the Sunshine State, is set aside for condo owner educational programs and fees related to accountants and investigation of complaints. The fund generates $5.6 million per year.
Bottom Line: With 1.4 million condominiums in Florida, the new condo laws, effective October 1, 2008, will impact millions of Floridians. The days of the all powerful "condo commandos" are over in Florida, and rank and file residents deserve to have more rights.
Topic 4: Judicial Appointment or Election
The Supreme Court will issue an advisory opinion on whether the vacancy created on the Leon County Court by the removal of Judge Tim Harvey will be filled by a gubernatorial appointment or an election. The Supreme Court recently removed Harvey, who suffers from Lou Gehrig's disease, granting him a disability retirement.
Under a 2002 Supreme Court opinion, when a vacancy occurs before a candidate has qualified the Governor is required to appoint an interim judge. When this vacancy occurred at midnight on Wednesday, April 30, no candidate had qualified; therefore, the Constitution and Supreme Court precedent should allow the Governor to appoint, a process that can happen within 30 to 60 days.
Complicating the matter is that before the Governor appointed a successor, three candidates qualified to run for the position. Accordingly, Governor Crist requested the Supreme Court to issue an advisory opinion regarding whether Harley should be replaced through an election or an appointment. Parties have until today (Monday) to submit their briefs to the court, who will then issue an opinion.
Governor Crist enjoys the power under Article IV, Section 1(c) of Florida's Constitution to seek an advisory opinion of the Florida Supreme Court. The President of the United States does not have the same prerogative. That matter was settled when President Washington sought an advisory opinion of the United States Supreme Court and was rebuked by Chief Justice Jay.
Bottom Line: If the Supreme Court rules that an election should determine the next judge, the seat will remain vacant for the next six months until the November General Election Ballot. By ruling in favor of the Governor's power to appoint, the vacancy can be filled in short order.
Topic 5: CSX Encore
As noted in last week's LeMieux Report, the highly debated proposal to divert freight traffic from the Orlando Metro Area towards Polk County in favor of a commuter rail, failed to pass the Florida Senate this year. Premature rumblings of a special session to deal with this issue have kept the proposal in the spotlight even as lawmakers and lobbyists return home.
While the bill failed due to reservations regarding the provision requiring the state to assume liability for accidents related to the project, opposition from Lakeland also played a factor in, no pun intended, derailing the proposal. In an effort to correct this pushback, Orlando Major Buddy Dyer, who chairs the Central Florida Commuter Rail Commission, a group comprised of leaders from Orange, Osceola, Seminole and Volusia Counties, reached out to Polk County opponents last week. Proponents of the project expressed a willingness to bring everyone back to the table, and noted the initiative would have increased the number of freight trains passing through Lakeland by only four trains per day.
On the other hand, the proposal's main adversary, the Florida Judicial Association (FJA), a group comprised of 4,000 trial lawyers, remains hard at work lobbying against the commuter rail based upon the liability provision. Supporters of the legislation maintain that the measure was defeated only when the initial pushback from Polk County residents was coupled with influence of the FJA.
Bottom Line: CSX's contract is valid until June 30, 2009. With local, state and federal monies involved and gas prices at an all-time high, alternative forms of transportation are all the more appealing. Despite initial setbacks, the commuter rail, and projects like it, are important to Florida's future from an environmental, growth management, and economical perspective.
Question of the Week
The 2008 Florida Legislature passed a comprehensive energy package addressing reduction of greenhouse gas emissions and the development of renewable energy sources in Florida. How will this new energy law affect my business practices in Florida?
Click here for the answer
Things to Watch
Board of Governors
Last week the Florida Board of Governors extended an olive branch to the Legislature by lowering its eight percent increase for tuition rates at state colleges and universities to six percent – in line with the increase approved in the 2008-2009 State Budget.
Court to Rule on Local Election Rules
The Florida Supreme Court this week heard arguments on a charter amendment that would call for a five percent of precincts to undergo an independent audit following an election. The amendment was brought forth by the Sarasota Alliance for Fair Elections and passed by the voters of Sarasota County by 55 percent. The lower court ruled in favor of the Sarasota Alliance for Fair Elections, while the 2nd District Court of Appeal ruled against the group, citing the amendment violates a requirement in state law for uniform election law. Currently, state law requires that one percent of precincts undergo an independent audit.
Hometown Democracy
The Supreme Court heard arguments regarding a financial statement on the Hometown Democracy ballot initiative, defeated earlier this year after failing to meet the number of signatures required to gain ballot access. All citizen initiatives are required to submit such a statement that details the financial impact of the proposal.
The original statement, ruled misleading, noted that local governments would incur significant costs. The new version mentions that these significant costs are also probable. Projections show the measure costing hundreds of millions statewide.
Falling State Revenues
Look for April revenue numbers, reported at the end of this week, to drop below projections. Revenue collections for March, the most recent data reported, were $54 million shy of already downward adjusted expectations. The House and Senate recently gave Governor Crist the ability to tap into reserves if revenues look to be insufficient to cover the budget, so legislators would not have to return in special session during an election year.
