Meeting Packet - Florida House of Representatives Commerce Committee (February 27, 2020)
Summary
A meeting packet for the Commerce Committee of the Florida House of Representatives, meeting on Thursday, February 27, 2020 at 8:00 am, with Mike La Rosa as Chair. The meeting agenda lists bills for consideration, including CS/CS/HB 65 Fireworks, CS/HB 295 Construction Defects, CS/HB 723 Peer-to-Peer Car Sharing and HB 7099 Essential State Infrastructure, and proposed committee substitutes including PCS for HB 1165 -- Beverage Law. The packet includes the staff analysis of CS/CS/HB 65 Fireworks, which begins by stating that federal laws regulate the manufacture, sale and use of fireworks.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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Commerce Committee
Thursday, February 27, 2020
8:00 AM -12:00 PM
Webster Hall (212 Knott)
Meeting Packet
Jose Oliva Mike La Rosa
Speaker Chair
The Florida House of Representatives
Commerce Committee
Jose Oliva Mike La Rosa
Speaker Chair
Meeting Agenda
Thursday, February 27, 2020
8:00 am - 12:00 pm
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
Ill. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• CS/CS/HB 65 Fireworks by Local, Federal & Veterans Affairs Subcommittee,
Business & Professions Subcommittee, Rodriguez, A. M.
• HB 207 Acquisition of Water and Wastewater Systems by McClain
• CS/HB 295 Construction Defects by Civil Justice Subcommittee, Santiago
• CS/HB 537 Home-based Businesses by Business & Professions
Subcommittee, Donalds
• CS/CS/HB 623 Community Associations by Civil Justice Subcommittee,
Business & Professions Subcommittee, Shoaf
• CS/HB 723 Peer-to-Peer Car Sharing by Insurance & Banking Subcommittee,
Fischer
• HB 771 Motor Vehicle Insurance by Grall
• CS/CS/HB 1339 Housing by Ways & Means Committee, Local, Federal &
Veterans Affairs Subcommittee, Yarborough
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
• HB 7041 Litigation Financing Consumer Protection by Civil Justice
Subcommittee, Leek
• HB 7099 Essential State Infrastructure by State Affairs Committee, lngoglia
Consideration of the following proposed committee substitute(s):
• PCS for CS/CS/HB 895 - Insurance
• PCS for HB 1165 -- Beverage Law
• PCS for HB 1265 -- Verification of Employment Eligibility
V. Closing Remarks
VI. Adjournment
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 65 Fireworks
SPONSOR(S): Local, Federal & Veterans Affairs Subcommittee, Business & Professions Subcommittee,
Rodriguez, A. M. and others
TIED BILLS: IDEN./SIM. BILLS: SB 140
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 7 Y, 5 N, As CS Brackett Anstead
2) Local, Federal & Veterans Affairs Subcommittee 10 Y, 1 N, As Moehrle Miller
cs
3) Commerce Committee Brackett /) Hamon
SUMMARY ANALYSIS
Federal laws regulate the manufacture, sale and use of fireworks. The U.S. Bureau of Alcohol, Tobacco,
Firearms and Explosives (ATF) as well as the U.S. Consumer Product Safety Commission (CPSC) have
general jurisdiction over what types of fireworks may be legally sold in the United States. Federal law sets the
minimum standard. States are permitted to enact laws that are more stringent.
In Florida, the sale and use of fireworks are generally prohibited.
However, many exceptions to the prohibition exist. The most commonly used exceptions allow approved
fireworks to be sold by a licensed retailer to a buyer who:
• has obtained a permit for a public display from a municipality or a board of county commissioners;
• is using the fireworks to scare birds away from agricultural works or fish hatcheries.
The bill creates an additional exception to the prohibition of the sale and use of fireworks.
The bill provides that federally approved consumer fireworks may be imported, sold, purchased, and used
solely and exclusively for the following holidays:
• New Year's Eve, December 31st;
• New Year's Day, January 1st;
• Memorial day, the last Monday in May; and
• Independence Day, July 4th.
The bill also:
• States it is not intended to provide for the comprehensive regulation of fireworks nor is it intended to
supersede any local government regulation relating to the use of fireworks;
• Provides that a person must be at least 18 years of age to purchase fireworks;
• Provides an affirmative defense for a retailer or seasonal retailer who acts in good faith and
inadvertently sells fireworks to a minor; and
• Permits seasonal retailers to sell sparklers and fireworks from May 12th through June 1st.
The bill is not expected to have a fiscal impact on state and local governments.
The bill takes effect upon becoming law.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Background
Chapter 791, F.S., regulates the sale and use of fireworks and sparklers in Florida. No person may
offer for sale, sell at retail, or use or explode any fireworks unless they meet the provisions or
exceptions in Florida law. 1 Sparklers are permitted under Florida law under certain conditions.
According to the American Pyrotechnics Association, 46 states plus the District of Columbia allow some
or all types of consumer fireworks, three states (Ohio, Illinois, and Vermont) allow only wire or wood
stick sparklers, and one state (Massachusetts) bans all consumer fireworks. 2
Federal Regulation of Fireworks
Fireworks are regulated by the federal government though the ATF, and the CPSC.
Federal explosives laws categorize fireworks into three types - display fireworks, consumer fireworks,
and articles pyrotechnic. 3
Display Fireworks
"Display fireworks" are defined as "large fireworks designed primarily to produce visible or audible
effects by combustion, deflagration, or detonation." The ATF requires anyone engaging in the business
of manufacturing, importing, or dealing in display fireworks to have an ATF explosive license, and
anyone importing for their own use or receiving or transporting display fireworks to have an ATF
permit. 4
"Display fireworks" include but are not limited to:
• Aerial shells containing more than 2 grains of explosive materials;
• Aerial shells containing more than 40 grams of pyrotechnic compositions;
• Other display pieces that exceed the limits of explosive materials for consumer fireworks; and
• Fused set pieces containing components which together exceed 50 milligrams of salute
powder. 5
Consumer Fireworks
"Consumer fireworks" are defined as "any small firework device designed to produce visible effects by
combustion and which must comply with the construction, chemical composition, and labeling
regulations of the U.S. Consumer Product Safety Commission." Manufacturers of "consumer fireworks"
must have an ATF license. However, the ATF generally does not regulate the importation, distribution,
and storage of consumer fireworks.
1
See ch. 791, F.S.
2
The American Pyrotechnics Association was found in 1948, represents the entire fireworks industry, and works toward the
responsible regulation of the fireworks industry. APA, 2019 State Fireworks Control Laws,
https://www.americanpyro.com/assets/docs/FactsandFigures/Rev2019%20State%20Laws%20Firework%20Map.pdf (last visited on
Oct. 29, 2019).
3
27 C.F.R. § 555 (2019) & 27 C.F.R. § 555.11 (2019).
4
27 C.F.R. § 555.26 (2019) & 27 U.S.C. § 555.41 (2019).
5
27 C.F.R. § 555.11 (2019).
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The definition also includes "some small devices designed to produce audible effects ... such as":
• whistling devices,
• ground devices containing 50 mg or less of explosive materials, and
• aerial devices containing 130 mg or less of explosive materials." 6
Articles Pyrotechnic
"Articles pyrotechnic" are defined as "pyrotechnic devices for professional use similar to consumer
fireworks in chemical composition and construction but not intended for consumer use." 7 A
manufacturer of articles pyrotechnics must have an ATF manufacturer's license. 8
The Federal Hazardous Substances Act (FHSA)
The CPSC regulates the use of consumer fireworks under the FHSA. 9 The FHSA prohibits the sale to
consumers of the most dangerous types of fireworks including:
• Large reloadable mortar shells;
• Cherry bombs;
• Aerial bombs;
• M-80 aerials; and
• Larger firecrackers containing more than 2 grains of explosive materials. 10
Any person who imports, distributes, or sells a prohibited firework under the FHSA to a consumer is
guilty of a misdemeanor and subject to a fine of not more than $500 and/or imprisonment for not more
than 90 days. For second or subsequent offenses, or if the person intended to defraud or mislead, the
person is subject to a fine of up to $250,000 and/or imprisonment for not more than 5 years. Any
person who imports, distributes, or sells a prohibited firework under the FHSA to a consumer may also
be subject to a civil penalty up to $100,000 for each violation and up to $15,000,000 for any series of
violations. 11
The determination of who may purchase and use consumer fireworks is left up to the states. However,
the CPSC advises that young children should not be allowed to use consumer fireworks and older
children should only be allowed to use consumer fireworks under the close supervision of an adult. 12
The CPSC provides an annual report on the number of non-occupational, fireworks-related deaths and
injuries in the U.S. The CPSC reported that in 2018 there were an estimated 9,100 injuries involving
fireworks in the U.S. The CPSC also reported that there were at least five deaths including a 16 year
old male in Florida who died after a mortar tube exploded in his hand. 13
6
27 C.F.R. § 555.11 (2019).
7
Id
8
27 C.F.R. § 555.11 (2019); 27 C.F.R. § 555.141 (2019); ATF Bureau of Alcohol, Tobacco, Firearms, and Explosives, Are 'consumer
fireworks' subject to regulation under the Federal explosive laws?, https://www.atf.gov/explosives/ga/are-%E2%80%9Cconsumer-
fireworks%E2%80%9D-subject-regulation-under-federal-explosives-laws (last visited on Oct. 29, 2019); ATF Bureau of Alcohol,
Tobacco, Firearms, and Explosives, Are "Articles Pyrotechnic" subject to the requirements of the Federal explosive regulations?,
https://www.atf.gov/explosives/ga/are-%E2%80%9Carticles-pyrotechnic%E2%80%9D-subject-reguirements-federal-explosives-
regulations (last visited Oct. 29, 2019).
9
15 U.S.C. § 1261 (2019).
10
16 C.F.R. § 1500.17 (2019).
11
See 15 U.S.C. § 1263 (2017); 15 U.S.C. § 1264 (2019); 18 U.S.C. § 3571 (2019).
12
U.S. Consumer Product Safety Commission, Fireworks Fact Sheet, https://www.cpsc.gov/s3fs-
public/Fireworks%20Fact%20Sheet%202019.pdf (last visited on Oct. 29, 2019).
13
Tu, Yongling, 2018 Fireworks Annual Report: Fireworks-Related Deaths and Emergency Department-Treated Injuries During
20I8, 1 & 8 https://www.cpsc.gov/s3fs-public/Fireworks Report 2018.pdf?5kZ4zdr9jPFyhPmeg3MoL35mGX8fBOs7 (June 2019).
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Florida Regulation of Fireworks and Sparklers
In Florida, the sale, purchase, and use of fireworks is prohibited unless the seller, buyer, or user falls
under an exemption. Fireworks are defined as "any combustible or explosive composition or substance
or combination of substances or, except as hereinafter provided, any article prepared for the purpose of
producing a visible or audible effect by combustion, explosion, deflagration, or detonation."
Fireworks include:
• Blank cartridges and toy cannons in which explosives are used;
• Balloons which require fire underneath to propel them;
• Firecrackers;
• Torpedoes;
• Skyrockets;
• Roman candles;
• Dago bombs; and
• Any fireworks containing any explosives or flammable compound or any tablets or other device
containing any explosive substance. 14
Fireworks do not include the following, which the sale and use of is permitted under certain
conditions:
• Sparklers 15 approved by the State Fire Marshal;
• Toy pistols, toy canes, toy guns, or other devices in which paper caps containing twenty-five
hundredths grains or less of explosive compound are used, providing that a person's hand
cannot come into contact with the cap when in place for the explosion;
• Toy pistol paper caps which contain less than twenty hundredths grains of explosive mixture;
and
• A trick noisemaker, which is a device that produces a small report intended to surprise a user,
including a:
o Party popper;
o Booby trap;
o Snapper;
o Trick match;
o Cigarette load; and
o Auto burglar alarm.
• The following novelties:
o A snake or glow worm, which is a pressed pellet of not more than 10 grams of
pyrotechnic composition that produces a large, snakelike ash which expands in length
as the pellet burns and that does not contain mercuric thiocyanate; and
o A smoke device, which is a tube or sphere containing not more than 10 grams of
pyrotechnic composition that, upon burning, produces white or colored smoke as the
primary effect. 16
Any person who illegally purchases, uses, or sells fireworks commits a first-degree misdemeanor. 17
Sparklers
All sparklers sold in Florida must be approved by the State Fire Marshal. Sparklers not approved by the
State Fire Marshal are considered fireworks. Any person wishing to sell a product as a sparkler in
Florida must first submit the product to the State Fire Marshal for testing to determine if the product
14
Ss. 791.01(4)(a) & 791.02(1), F.S.
15
S. 791.01(8), F.S. (Sparklers are hand-held or ground-based devices that emit showers of sparks when they are burned. Sparklers do
not explode, detonate, contain explosive compounds, are not self-propelled, and have a limited number of combustible chemicals.)
16
S. 791.01(4)(b) & (c), F.S.
17
S. 791.06, F.S.
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meets the definition of a sparkler. On February 1 of each year, the State Fire Marshal must publish a
list of the approved sparklers. All approved sparklers may be sold until January 31st of the following
year. 18
Any person who alters an approved sparkler, so that it is no longer a sparkler, and subsequently sells
the altered sparkler as an approved sparkler commits a first-degree misdemeanor. Any person who
fraudulently represents a product that is not an approved sparkler as an approved sparkler commits a
first-degree misdemeanor. 19
Public Displays of Fireworks
Pursuant to s. 791.012, F.S, the outdoor display of fireworks is governed by the National Fire Protection
Association (NFPA) 1121, Code for Fireworks Display, 1995 Edition, approved by the American
National Standards lnstitute. 20 Any state, county, or municipal law, rule, or ordinance may provide for
more stringent regulations, but in no event may any such law, rule, or ordinance provide for less
stringent regulations for the outdoor display of fireworks. However, the Code for Fireworks Display does
not govern the display of any fireworks on private residential property. 21
Florida allows the public display of fireworks in municipalities if police and fire chiefs have determined
that the display is done by a competent supervisor, and the display does not endanger any person and
is not hazardous to property. 22
Supervised public displays of fireworks are permitted outside municipalities by fair associations,
amusement parks, and other organizations or groups of individuals if the person doing the display
obtains a bond of not less than $500. The bond is for the payment of damages that may be caused to a
person or property by the fireworks display, any acts of the person doing the display, his or her agents,
employees, or subcontractors. 23
Municipalities and the boards of county commissioners have the power to adopt reasonable rules and
regulations for the granting of permits for supervised public displays of fireworks. Application for a
permit must be made in writing at least 15 days in advance of the display. Upon obtaining a permit a
person may engage in the lawful sale, possession, and distribution of fireworks for the display. Permits
may not be transferred. 24
Distributors, Manufacturers, Wholesalers, and Retailers
In order to be a retailer, manufacturer, wholesaler, or distributor25 a person must register annually with
the State Fire Marshal. Depending on the type of registration, the registrant is able to manufacture,
construct, or sell sparklers and may also sell fireworks:
• To other registered wholesalers, manufacturers, and distributors;
18
Ss. 791.01(8) & 791.013(1), F.S.
19
S. 791.013(2), F.S.
20
The National Fire Protection Association was founded in 1896 and delivers information and knowledge through more than 300
consensus codes and standards, research, training, education, outreach and advocacy; and by partnering with others who share an
interest in furthering the mission. The American National Standards Institute is a non-profit organization that aims to strengthen the
U.S. market place and assure the safety and health of consumers by creating and promulgating thousands of standards and guidelines.
NFPA, About NFPA, http://www.nfpa.org/about-nfpa (last visited on Oct. 29, 2019); ANSI, About ANSI,
https://www.ansi.org/about ansi/overview/overview?menuid=l (last visited on Oct. 29, 2019).
21
S. 791.012, F.S.
22
S. 791.02(1), F.S.
23
Id. & S. 791.03, F.S.
24
S. 791.02(1), F.S.
25
S. 791.01(1), (5), & (9), F.S. (A distributor is defined as any person who sells sparklers to a wholesaler. A manufacturer is defined
as any person engaged in the manufacture or construction of sparklers in Florida. A wholesaler is defined as any person engaged in the
business of selling sparklers to a retailer.)
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• That are to be shipped out of Florida;
• To anyone holding a public firework display permit from a municipality or a board of county
commissioners; and
• To a buyer who is using the fireworks to scare birds away from agricultural works or fish
hatcheries. 26
Retailers and seasonal retailers may not sell sparklers, fireworks, or any other product authorized for
sale by ch. 791, F.S., unless the retailer or seasonal retailer obtained the product from a registered
manufacturer, distributor, or wholesaler.
Retailers and seasonal retailers are also required to keep, at every location where sparklers are sold,
evidence of purchases from manufacturers, distributors, or wholesalers. The evidence must have the
manufacturer, distributor, or wholesaler's registration number, and the specific items purchased by the
retailor or seasonal retailor. Each seasonal retailer must also display a copy of his or her registration at
each seasonal location. 27
There are two types of retailers in Florida:
• A retailer, who is any person at a fixed place of business who sells sparklers to consumers at
retail; and
• A seasonal retailer, who is any person engaged in the business of selling sparklers to
consumers at retail from June 20th through July 5th and December 10th through January 2nd_ 28
A retailer who sells sparklers at multiple locations may submit one registration form as long as the
retailer lists every location on the registration form. 29 The registration form must include the business
name, address, telephone number, corporate officers (if a corporation}, and a contact person. Annual
registration fees are:
• $1,000 for registration as a manufacturer, distributor, or wholesaler;
• $200 for registration as a seasonal retailer; and
• $15 for each location registered by a non-seasonal retailer. 30
Agricultural Exception to Fireworks Prohibition
Pursuant to s. 791.07, F.S., nothing shall prohibit the importation, purchase, sale, or use of fireworks to
be used solely and exclusively to scare birds from agricultural works and fish hatcheries. Such use is
governed by rules prescribed by the Department of Agriculture and Consumer Services (DACS}.
Current law does not provide for an age restriction for the purchase of fireworks to scare birds from
agricultural works and fish hatcheries. However, on February 13, 2018, testimony was offered during
the regular meeting of the Florida House of Representatives' Commerce Committee indicating that it is
standard practice for retailers to refuse to sell fireworks to minors under the agricultural exception
because minors cannot legally sign the legal form required by the retailers. 31
DACS has adopted rules that require any person who wishes to use firecrackers to scare birds first file
a written statement, with the sheriff in the county where the agricultural work or fish hatchery is located,
attesting that he or she intends to use the firecrackers solely for the purpose of scaring birds. 32 A
26
Ss. 791.04 & 791.07, F.S.
27
S. 791.02(2), F.S.
28
S. 791.01(6) & (7), F.S.
29
S. 791.015(1), F.S.
30
S. 791.015(3), F.S. & Rule 69A-50.005, F.A.C.
31
See The Florida Channel, 2/13/2018 House Commerce Committee.
32
Rule 5A-3.001, F.A.C.
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person may purchase firecrackers from an authorized seller upon presenting the seller a copy of the
written statement he or she has filed with the sheriff. 33
Local news stations have reported that the ability to buy fireworks in order to scare birds is a "loophole"
to the prohibition of the purchase of fireworks by people who are not registered with the State Fire
Marshal. According to the local news stations, retailers require a person to sign a form attesting that
they are purchasing fireworks to scare birds from agricultural works or fish hatcheries in order to
purchase the fireworks. 34 In 2002, the Third District Court of Appeal held that it is not the responsibility
of a seller to check the veracity of a buyer's form attesting that the fireworks are to be used to scare
birds. 35
Consumer Fireworks Task Force/Limits on Retail Sales Facilities & Local Regulations (2007 Provisions)
The 2007 Legislature 36 found that:
• The state regulation of consumer fireworks in Florida provides an insufficient definition of
consumer fireworks and related products used by consumers;
• There is a need for better training and education concerning the safe use of consumer
fireworks;
• There should be a mechanism to help local governments fund the cleanup following the use of
consumer fireworks on public property;
• Local government regulation of the agricultural uses authorized bys. 791.07, F.S., may be
inconsistent with legitimate agricultural purposes;
• There is a need for consumer education relating to safety standards in the use of consumer
fireworks;
• There is need for standards concerning tents and other temporary retail facilities selling
consumer fireworks; and
• The state would benefit from additional funding for the training and education of fire officials.
The Consumer Fireworks Task Force (Task Force), housed within DACS, was established for the
purpose of studying issues concerning consumer fireworks, including the:
• Proper use of consumer fireworks;
• The regulation of sales and temporary sale facilities;
• Regulation of the hours and location of use;
• Property zoning classifications for sale facilities;
• Funding options for fire official training and education; and
• Funding options for cleanup of expended consumer fireworks products. 37
In 2007, limits on the number of retail sales facilities for the sale of consumer fireworks were
established:
• A new permanent fireworks retail sales facility may not be opened in Florida after March 8,
2007, for the purpose of selling fireworks in accordance with the agricultural exception, unless
construction for the permanent retail sales facility received site plan approval and construction
began on or before March 8, 2007; and
33
Rule 5A-3.002, F.A.C.
34
Jenna Bourne, loophole in Florida fireworks law can lead to irifuries, death, Action News Jax (Jul. 4, 2019),
https ://www .actionnewsjax.com/news/local/loophole-in-florida-fireworks- law-can-lead-to-injuries-death/963 97 5096; Nicki Ross,
Fireworks are big business - and illegal in Florida, The Daytona Beach News-Journal (Jul. 3, 2019), https://www.news-
joumalonline.com/news/20190703/fireworks-are-big-business---and-illegal-in-florida; WFTX Digital Team, Police: Most fireworks
are illegal in Florida, Fox4 Southwest Florida (Jul. 4, 2019) https://www.fox4now.com/news/local-news/police-most-fireworks-are-
illegal-in-florida.
35
See State v. Miketa, 824 So. 2d 970 (Fla. 3d DCA 2002).
36
Ch. 2007-67, s. 10(1), Laws of Fla. (In 2007, the Legislature passed and the Governor signed into law Senate Bill 1372.)
37
Ch. 2007-67, s. 10(2)(a), Laws of Fla.
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• The number of permits for temporary fireworks retail sales facilities, such as tents, issued after
March 8, 2007, by a county, municipality, or other unit of local government, may not exceed the
number of permits the governmental entity issued for facilities selling fireworks in accordance
with the agricultural exception during the 2006 calendar year. 38
Local governments were are also prohibited from adopting any ordinance, rule, or regulation after
March 8, 2007, that directly prohibits or directly interferes with the safety standards established by state
law or the right to purchase, sell, use or possess consumer fireworks. 39
The 2007 provisions were enacted with the expectation that the Legislature would review the Task
Force's recommendations, and decide whether to adopt comprehensive regulations for the use of
consumer fireworks based on those recommendations. 40 Therefore, the 2007 provisions were
anticipated to remain in effect until the Legislature reviewed the Task Force's recommendations.
However, the 2007 provisions also provided that they would expire if the Legislature adopted
comprehensive regulations for the use of consumer fireworks on or before July 1, 2008. 41
Although the 2007 provisions were enacted pending the Legislature's review of the Task Force's
recommendations or upon the enactment of comprehensive regulations for the use of consumer
fireworks, the 2007 provisions remain in effect today. Changes were not made to such provisions after
the Task Force completed its report and submitted it to the Legislature on January 15, 2008. 42
In June 2016, the City of Altamonte Springs requested an advisory opinion from the Florida Office of
the Attorney General (AG) to determine if the City could issue a new permit for the sale of fireworks.
The AG determined that local governments are prohibited from allowing new facilities to be opened for
the sale of fireworks, and local governments may only issue as many permits allowing temporary
facilities for the sale of fireworks as they had issued in 2006. 43
State Fire Marshal
Florida's fire prevention and control law, ch. 633, F.S., designates the state's Chief Financial Officer as
the State Fire Marshal. The State Fire Marshal, through the Division of State Fire Marshal within the
Department of Financial Services (DFS}, is charged with enforcing the provisions of ch. 633, F.S., and
all other applicable laws relating to fire safety and has the responsibility to minimize the loss of life and
property in this state due to fire. Pursuant to this authority, the State Fire Marshal regulates, trains, and
certifies fire service personnel and fire safety inspectors; investigates the causes of fires; enforces
arson laws; regulates the installation of fire equipment; conducts fire safety inspections of state
property; and operates the Florida State Fire College. 44
In addition to these duties, the State Fire Marshal adopts by rule the Florida Fire Prevention Code
(FFPC}, which contains all fire safety rules that pertain to the design, construction, erection, alteration,
modification, repair, and demolition of public and private buildings, structures, and facilities and the
enforcement of such fire safety laws and rules, at ch. 69A-60, F.A.C. The State Fire Marshal adopts a
new edition of the FFPC every three years. The FFPC includes national fire safety and life safety
standards set forth by the NFPA, including the NFPA's Fire Code (1), Life Safety Code (101) and Guide
on Alternative Approaches to Life Safety (101A). 45
38
Ch. 2007-67, s. 10(5), Laws ofFla.
39 Id.
40 Id.
41 Id.
42
2016-05 Fla. Op. Att'y Gen. 37 (2016).
43 Id.
44 S. 633.104, F.S.
45
S. 633.202(2), F.S.
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According to DFS, last year there were 108 fires in Florida where fireworks were the reported cause.
Those fires resulted in an estimated $287,751 in property damage. In 2017, there were 173 fires in
Florida where fireworks were the reported cause. Those fires resulted in one death and $500,660 in
property damage. 46
Effect of the Bill
The bill creates an exception to the prohibition on the sale and use of fireworks.
The bill provides that fireworks are not prohibited from being imported, sold, purchased, or used, or to
be used, if they are solely and exclusively for the following holidays:
• New Year's Eve, December 31st;
• New Year's Day, January 1st;
• Memorial day, the last Monday in May; and
• Independence Day, July 4th.
The bill states that it is not intended to provide for the comprehensive regulation of fireworks nor is it
intended to supersede any local government regulation relating to the use of fireworks. This will
maintain the 2007 provisions relating to the opening of new permanent retail sales facilities, and the
issuance of permits for temporary retail sales facilities in greater numbers than were permitted in 2006.
It will also maintain the 2007 provisions relating to the prohibition of the enactment of local government
ordinances that prohibit or directly interfere with the safety standards established by state law or the
right to purchase, sell, use or possess consumer fireworks.
The bill provides that a person must be at least 18 years of age to purchase fireworks. The bill also
provides an affirmative defense to a retailer or seasonal retailer who sells fireworks to a minor. A
retailer or seasonal retailer has an affirmative defense if at the time the fireworks were sold, the
retailer, seasonal retailer, or one of their employees or agents:
• Carefully checked a driver license, an identification card issued by this state or another state of
the United States, a passport, or a United States Armed Services identification card presented
by the buyer; and
• Acted in good faith and in reliance upon the representation and appearance of the buyer in the
belief that the buyer was 18 years of age or older. 47
The bill also permits seasonal retailers to sell sparklers and fireworks from May 12th through June 1st.
The bill takes effect upon becoming law.
8. SECTION DIRECTORY:
Section 1. Amends s. 791.01, F.S., revising the definition of the term "seasonal retailer."
Section 2. Creating s. 791.08, F.S., authorizing the purchase, sale, and use of fireworks on certain
holidays. Providing the statute neither creates a comprehensive regulation of fireworks
nor supersedes local regulation. Providing an age requirement to purchase fireworks,
and providing an affirmative defense for certain retailers.
Section 3. Provides the act is effective upon becoming law.
11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
46
Florida Department ofFinancial Services, Agency Analysis of2020 House Bill 65, p. 4 (Sep. 20, 2019).
47
Current law provides a similar affirmative defense for retailers who inadvertently sell tobacco products, nicotine products, or
nicotine dispensing devices to a person under 18 years of age. Ss. 569.101 & 877.112, F.S.
STORAGE NAME: h0065d.COM.DOCX PAGE: 9
DATE: 2/25/2020
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
See Fiscal Comments
D. FISCAL COMMENTS:
A potential increase in the purchase and use of fireworks may have a positive economic impact on the
private sector.
According to DFS, last year there were 108 fires in Florida where fireworks were the reported cause.
Those fires resulted in an estimated $287,751 in property damage. In 2017, there were 173 fires in
Florida where fireworks were the reported cause. Those fires resulted in one death and $500,660 in
property damage. 48
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
None.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither requires nor provides authority for administrative agency rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On November 6, 2019, the Business & Professions Subcommittee adopted a strike-all amendment and
reported the bill favorably as a committee substitute. The committee substitute:
48
Florida Department of Financial Services, Agency Analysis of2020 House Bill 65, p. 4 (Sep. 20, 2019).
STORAGE NAME: h0065d.COM.DOCX PAGE: 10
DATE: 2/25/2020
• Includes New Year's Eve as a designated holiday;
• Includes Memorial Day in the list of dates "seasonal retailers" are permitted to sell fireworks;
• Provides that a person must be at least 18 years of age to purchase fireworks;
• Provides an affirmative defense for a retailer who acts in good faith and inadvertently sells fireworks to
a minor; and
• Removes the rule-making requirement.
On December 11, 2019, the Local, Federal & Veterans Affairs Subcommittee adopted an amendment and
reported the bill favorably as a committee substitute. The amendment clarifies that the bill is not intended to
provide for the comprehensive regulation of fireworks nor is it intended to supersede local regulation of the use
of fireworks as provided in ch. 2007-67, Laws of Fla.
This analysis is drafted to the committee substitute as approved by the Local, Federal & Veterans Affairs
Subcommittee.
STORAGE NAME: h0065d.C0M.D0CX PAGE: 11
DATE: 2/25/2020
FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/HB 65 2020
1 A bill to be entitled
2 An act relating to fireworks; amending s. 791.01,
3 F.S.; revising the definition of the term "seasonal
4 retailer"; creating s. 791.08, F.S.; defining the term
5 "designated holiday"; providing an exemption for the
6 purchase, sale, or use of fireworks used or to be used
7 solely and exclusively during a designated holiday;
8 providing construction; providing an age requirement
9 to purchase fireworks; providing an affirmative
10 defense for certain retailers; providing an effective
11 date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Subsection (7) of section 791.01, Florida
16 Statutes, is amended to read:
17 791.01 Definitions.-As used in this chapter, the term:
18 ( 7) "Seasonal retailer" means any person engaged in the
19 business of selling sparklers at retail in this state from May
20 12 through June 1, from June 20 through July 5~ and from
21 December 10 through January 2 of each year.
22 Section 2. Section 791.08, Florida Statutes, is created to
23 read:
24 791.08 Use during designated holidays; exemption.-
25 (1) As used in this section, the term "designated holiday"
Page 1 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb0065-02-c2
FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/HB 65 2020
26 means:
27 (a) New Year's Eve, December 31;
28 (b) New Year's Day, January 1;
29 (c) Memorial Day, the last Monday in May; or
30 (d) Independence Day, July 4.
31 (2) This chapter does not prohibit the offer for sale,
32 sale, purchase, or use of fireworks that are to be used or used
33 solely and exclusively during a designated holiday. This section
34 is not intended to provide for the comprehensive regulation of
35 fireworks as described ins. 10(5), chapter 2007-67, Laws of
36 Florida, or to supersede any local government regulation
37 relating to the use of fireworks as provided ins. 10(5),
38 chapter 2007-67, Laws of Florida.
39 (3) Any person who purchases fireworks must be 18 years of
40 age or older.
41 (4) A retailer or seasonal retailer charged with
42 unlawfully selling fireworks to a person under 18 years of age
43 has a complete defense if, at the time the fireworks were sold,
44 the retailer, seasonal retailer, or an employee or agent of the
45 retailer or seasonal retailer carefully checked a driver license
46 or an identification card issued by this state or another state
47 of the United States, a passport, or a United States Armed
48 Services identification card presented by the buyer, and acted
49 in good faith and in reliance upon the representation and
50 appearance of the buyer in the belief that the buyer was 18
Page 2 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb0065-02-c2
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/CS/HB 65 2020
51 years of age or older.
52 Section 3. This act shall take effect upon becoming a law.
Page 3 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb0065-02-c2
COMMERCE COMMITTEE
HB 65 by Rep. Rodriguez, A.M.
Fireworks
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Rodriguez, A.M. (Strike-all amendment):
The strike-all amendment:
• Removes Memorial Day as a designated holiday for the sale of fireworks, and the
provision allowing seasonal retailers to sell fireworks during Memorial Day.
The remainder of the bill's provisions are unchanged by the strike-all amendment.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 65 (2020)
Amendment No. 1.
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Rodriguez, A. M. offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Section 791.08, Florida Statutes, is created to
7 read:
8 791.08 Use during designated holidays; exemption.-
9 (1) As used in this section, the term "designated holiday"
10 means:
11 (a) New Year's Eve, December 31;
12 (b) New Year's Day, January 1; or
13 (c} Independence Day, July 4.
14 (2) This chapter does not prohibit the offer for sale,
15 sale, purchase, or use of fireworks that are to be used or used
16 solely and exclusively during a designated holiday. This section
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Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 65 (2020)
Amendment No. 1.
17 is not intended to provide for the comprehensive regulation of
18 fireworks as described ins. 10(5), chapter 2007-67, Laws of
19 Florida, or to supersede any local government regulation
20 relating to the use of fireworks as provided ins. 10(5),
21 chapter 2007-67, Laws of Florida.
22 (3) Any person who purchases fireworks must be 18 years of
23 age or older.
24 (4) A retailer or seasonal retailer charged with
25 unlawfully selling fireworks to a person under 18 years of age
26 has a complete defense if, at the time the fireworks were sold,
27 the retailer, seasonal retailer, or an employee or agent of the
28 retailer or seasonal retailer carefully checked a driver license
29 or an identification card issued by this state or another state
30 of the United States, a passport, or a United States Armed
31 Services identification card presented by the buyer, and acted
32 in good faith and in reliance upon the representation and
33 appearance of the buyer in the belief that the buyer was 18
34 years of age or older.
35 Section 2. This act shall take effect upon becoming law.
36
37
38 T I T L E A ME N D ME N T
39 Remove everything before the enacting clause and insert:
40 An act relating to fireworks; creating s. 791.08,
41 F.S.; defining the term "designated holiday";
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Page 2 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 65 (2020)
Amendment No. 1.
42 providing an exemption for the purchase, sale, or use
43 of fireworks used or to be used solely and exclusively
44 during a designated holiday; providing construction;
45 providing an age requirement to purchase fireworks;
46 providing an affirmative defense for certain
47 retailers; providing an effective date.
535995 - h65-strike.docx
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Page 3 of 3
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 207 Acquisition of Water and Wastewater Systems
SPONSOR(S): McClain
TIED BILLS: IDEN./SIM. BILLS: CS/SB 658
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Energy & Utilities Subcommittee 15 Y, 0 N Keating Keating
2) Government Operations & Technology 11 Y, 0 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Keating
SUMMARY ANALYSIS
When the Public Service Commission approves a sale, assignment, or transfer of an existing water or
wastewater utility system to a PSC-regulated utility, it establishes a rate base value for the acquired utility
system. The value of the acquired utility's rate base is determined using the utility's net book value, i.e .. the
original cost of the utility's assets when first dedicated to public service, less depreciation. This rate base is the
amount upon which the acquiring utility may earn a fair rate of return established by the PSC.
If the purchase price of a utility system is greater than its net book value, no part of the difference is included in
rate base absent a showing of extraordinary circumstances. This showing may be made through evidence that
the transaction is anticipated to yield cost efficiencies and improvements in service quality and regulatory
compliance, among other things. If the PSC determines that extraordinary circumstances exist, it will allow the
acquiring utility to include all or part of the difference in its rate base as a "positive acquisition adjustment."
This adjustment will be reflected in the utility's rates that are set during the utility's next general rate case.
The bill allows certain PSC-regulated water and wastewater utilities (those with over 10,000 customers) who
acquire an existing water or wastewater utility system to establish rate base for the acquired utility system
based on the lesser of: (1) the purchase price negotiated by the two utilities; or (2) the "fair market value" of the
acquired utility, as determined by the average of appraisals conducted by two licensed appraisers chosen from
a list established by the PSC. Appraisal fees and transaction costs may also be included. The bill provides
that one appraiser will represent and be paid by the acquiring utility, and that a second appraiser will represent
and be paid by the utility to be acquired. The bill provides some guidelines for the appraisals, including the use
of a required engineering assessment. To use this fair market value approach, the utility must provide the PSC
certain information specified in the bill. If the required information is provided, the PSC must approve an
application within 6 months.
The bill is not expected to have a fiscal impact on state or local governments. The bill may encourage
transactions involving the purchase of smaller utility systems by eligible utility systems. In some cases, these
transactions may yield needed infrastructure improvements, cost efficiencies, and improvements in service
quality and regulatory compliance. Where such benefits are achieved, the combined rate impact of these
benefits may or may not outweigh the rate impact of valuing the acquired utility system's rate base above the
system's net book value. Thus, in some cases, the bill could result in customer rates being higher than they
otherwise would be solely due to valuation of the acquired utility system.
The six month approval process created in the bill may require additional PSC resources but the amount is
unknown at this time. See Fiscal Comments.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0207d.C0M.D0CX
DATE: 2/24/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Regulated Water and Wastewater Utilities
In various areas throughout Florida, water and wastewater services are provided through privately-
owned and operated utilities. These privately-owned utilities, sometimes referred to as investor-owned
utilities, range in size from very small systems, owned by individuals as sole proprietorships and
serving only a few dozen customers in a small neighborhood, to systems owned by large interstate
corporations which serve tens of thousands of customers in multiple Florida counties.
For privately-owned utilities operating within a single Florida county, the county has the option to
regulate rates and service or allow the Public Service Commission (PSC) to regulate those utilities. 1
Regardless of whether the county has opted to regulate those utilities, the PSC has jurisdiction over all
water or wastewater utility systems whose service transverses county boundaries, except for systems
owned and regulated by intergovernmental authorities. 2 As of December 2018, the PSC had
jurisdiction over 150 utilities in 38 counties. 3 Still, the vast majority of water and wastewater customers
in the state are served by water and wastewater utilities not regulated by the PSC, primarily by systems
owned, operated, managed, or controlled by governmental authorities.
For each utility within its jurisdiction, the PSC has exclusive authority to regulate the utility's rates and
service. 4 The PSC must establish rates that are just, reasonable, compensatory, and not unfairly
discriminatory. 5 In doing so, the PSC must consider the value and quality of the service and the cost of
providing the service, which includes, but is not limited to: debt interest; the requirements of the utility
for working capital; maintenance, depreciation, tax, and operating expenses incurred in the operation of
all property used and useful in the public service; and a fair return on the investment of the utility in
property used and useful in the public service. 6 The PSC has consistently interpreted the "investment
of the utility" to be the original cost of the utility's property when first dedicated to public service. 7
Acquisition of Utility Systems
Each utility subject to the PSC's jurisdiction must obtain a certificate of authorization to provide water or
wastewater service. 8 A PSC-regulated utility may not sell, assign, or transfer its certificate of
authorization, facilities, or majority organizational control without approval by the PSC. Likewise, PSC
approval is required for the transfer of a utility system exempt from PSC jurisdiction, such as a system
owned or operated by a governmental authority, to a PSC-regulated utility. To grant approval, the PSC
must determine that the sale, assignment, or transfer is in the public interest and that the acquiring
utility will fulfill the commitments, obligations, and representations of the utility to be acquired. 9 The
PSC considers, among other things, the financial ability of the buyer to maintain and operate the
acquired utility and the technical ability of the buyer to provide service. 10
1
S. 367 .171, F.S. If a county chooses to allow regulation by the PSC, it may rescind this election only after 10 continuous years of
PSC regulation.
2 Id.
3
Florida Public Service Commission, Facts and Figures of the Florida Utility Industry, p. 31 (Jun. 2019).
4
S. 367.011, F.S.
5
S. 367.081, F.S.
6 Id.
7
Florida Public Service Commission (FPSC), Agency Analysis of2020 House Bill 207, p. 1 (Jan, 6, 2020).
8
S. 367.031, F.S.
9
S. 367.071(1), F.S.
10
Rule 25-30.037 (2), F.A.C.
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DATE: 2/24/2020
When the PSC approves a sale, assignment, or transfer of an existing utility system to a PSC-regulated
utility, the PSC may establish the rate base for the utility being transferred. 11 The PSC establishes the
value of an existing utility's rate base using "original cost." Using original cost, the value of a utility's
rate base is determined using the depreciated original cost, or net book value, of the property devoted
to the public service. This rate base is the amount upon which the utility may earn a fair return, as
established by the PSC. 12
A utility system may be acquired at a price higher or lower than the net book value of its assets. If the
purchase price is greater than net book value, no part of the difference is included in a utility's rate base
absent a showing by the utility of extraordinary circumstances. 13 In determining whether a utility has
demonstrated extraordinary circumstances, the PSC will consider evidence including:
• Anticipated improvements in quality of service;
• Anticipated improvements in compliance with regulatory mandates;
• Anticipated rate reductions or rate stability over a long-term period;
• Anticipated cost efficiencies; and
• Whether the purchase was made as part of an arms-length transaction. 14
If the PSC determines that extraordinary circumstances exist, it will allow the acquiring utility to include
all or part of the difference in its rate base as a "positive acquisition adjustment." This adjustment will
be reflected in the utility's rates that are set during the utility's next general rate case.
A review of 78 water and wastewater utility transfers addressed by the PSC between August 15,
2002, 15 and September 14, 2018, shows that the purchase price of a utility system exceeded its net
book value in 39 cases. A positive acquisition adjustment was requested in two of those cases, but the
requests were withdrawn prior to the PSC's decision in each case.
Effect of Proposed Changes
The bill allows certain PSC-regulated water and wastewater utilities who acquire an existing water or
wastewater utility system to choose to establish rate base for the acquired utility system without regard
to the system's original cost. Instead, such utilities may elect to establish rate base for the acquired
system based on the lesser of: (1) the purchase price negotiated by the two utilities; or (2) the "fair
market value" of the acquired utility, as determined by the average of appraisals conducted by two
licensed appraisers chosen from a list established by the PSC. The acquired system's rate base may
also include reasonable fees paid to appraisers, if approved by the PSC, and reasonable transaction
and closing costs incurred by the acquiring utility. If the rate base established through this mechanism
exceeds the acquired utility system's net book value, the effect is the same as if the acquiring utility had
received a positive acquisition adjustment that increases the value of the acquired system's rate base.
No consideration of anticipated benefits is required.
The bill provides that one appraiser will represent and be paid by the acquiring utility, and that a second
appraiser will represent and be paid by the utility to be acquired. The bill does not specify who may
choose the two appraisers. The bill requires each appraiser to determine the fair market value of the
utility to be acquired by using the Uniform Standards of Professional Appraisal Practice16 and
II S. 367.071(5), F.S.
12
FPSC, supra note 7, at 1.
13
Rule 25-30.0371(2), F.A.C.
14 Id.
15
The PSC's rule on positive acquisition adjustments was adopted August 4, 2002.
16
The Uniform Standards of Professional Appraisal Practice (USPAP) is the generally recognized ethical and performance standards
for the appraisal profession in the United States. USP AP was adopted by Congress in 1989, and contains standards for all types of
appraisal services, including real estate, personal property, business, and mass appraisal. See The Appraisal Foundation, What is
USPAP?,
STORAGE NAME: h0207d.COM.DOCX PAGE: 3
DATE: 2/24/2020
employing cost, market, and income approaches. 17 The bill provides that the original source of funding
for the utility being acquired is not relevant for purposes of each appraiser's evaluation of fair market
value.
Under the bill, the acquiring utility and the utility system being acquired must jointly retain a licensed
engineer to assess the tangible assets of the system being acquired. The bill specifies that this
assessment must be used by the two appraisers chosen to determine the fair market value of the
system being acquired.
A utility that chooses to use this mechanism to establish rate base for an acquired utility system must
submit an application to the PSC that includes the following:
• Copies of the two required appraisals performed by the chosen appraisers, including the
average of the appraisals;
• The required engineering assessment, including each deficiency identified in the engineering
assessment and a 3-year plan for prudent and necessary infrastructure improvements;
• The projected rate impact for the selling utility's customers for the next 5 years;
• The contract of sale;
• The estimated appraisal fees, and the estimated transaction and closing costs to be incurred by
the acquiring utility; and
• A tariff, including rates equal to the rates of the utility to be acquired.
If the utility's application includes all of these required elements, the bill provides that the PSC must
issue a final order approving or denying the application within 6 months of filing, though the bill does
not specify any grounds for denial. The order must indicate the rate base value established through
this mechanism for the acquired utility system.
The bill specifies that it applies only to acquiring utilities that provide water and wastewater services to
more than 10,000 customers and are engaged in a "voluntary and mutually agreeable" acquisition of a
water and wastewater system. Currently, it appears that there are three PSC-regulated utilities to
which the bill may apply. 18 All other PSC-regulated utilities that acquire a water or wastewater system
would continue to operate under the PSC's current rules that use the original cost approach to establish
rate base and that allow a positive acquisition adjustment only upon a demonstration of extraordinary
circumstances.
If the mechanism created by the bill is used to establish rate base for an acquired utility system, that
rate base value must be used by the PSC to establish rates for the acquiring utility during the utility's
next general rate case. The bill specifies that the PSC, in setting future rates for customers of the
acquired system, may classify the system as a separate entity, consistent with the public interest.
B. SECTION DIRECTORY:
Section 1. Creates s. 367.0712, F.S., related to the determination of rate base value for an
acquired water or wastewater utility system.
Section 2. Provides an effective date of July 1, 2020.
https://www.appraisalfoundation.org/imis/TAF /Standards/ Appraisal Standards/Uniform Standards of Professional Appraisal Practi
ce/T AF/USPAP.aspx?hkey=a6420a67-dbfa-41 b3-9878-fac35923d2af (last visited Feb. 24, 2020).
17
The cost approach considers the current cost ofreproducing or replacing a building, minus an estimate for depreciation, plus the
value of the land (and entrepreneurial incentive, if applicable). The market (sales comparison) approach considers the value indicated
by recent sales of comparable properties on the market. The income approach considers the value that the property's net earning
power will support. See The Appraisal Foundation, Understanding the Appraisal,
https://www.appraisalinstitute.org/assets/l/7/understand appraisal 1109 (I ).pdf (last visited Feb. 24, 2020).
18
FPSC, supra note 7, at 4. As noted in the Drafting Issues or Other Comments section of this analysis, this provision of the bill
could be clarified as to its specific application.
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DATE: 2/24/2020
11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may encourage the three eligible utilities to acquire smaller utility systems, potentially resulting
in better access to low cost capital for infrastructure improvements 19 that may be needed for the
acquired systems. Further, the acquisition of a smaller utility system by an eligible utility may result in
other cost efficiencies and improvements to quality of service and regulatory compliance.
While these results are desirable, there is no guarantee that they will occur, 20 as they are not required
and will depend on the specific circumstances surrounding each individual acquisition. If economic
efficiencies and lower capital costs are achieved, the combined rate impact of these benefits may or
may not outweigh the rate impact of valuing the acquired utility system's rate base above the system's
net book value. Thus, the bill could result in customer rates being higher than they otherwise would be
solely due to valuation of the acquired utility system. 21
The owners of acquired utility systems may benefit more often from purchase prices above their net
book value and, therefore, may be more willing to sell to a larger utility that may provide cost
efficiencies, better management, and infrastructure improvements.
D. FISCAL COMMENTS:
The bill provides that the PSC must issue a final order approving or denying an application within six
months of filing. The PSC asserts that compliance with this time limit will require all utility transfers of
this type to be set directly for a formal administrative hearing, which may impose additional resource
costs on the utilities and customer representatives, including the Office of Public Counsel. 22 However,
because the bill does not establish grounds for denial of a complete application, the approval process
may not involve significant hearing resources.
19
Id. at 2. If any such improvements are made, the impact of those improvements on rate base (and, in tum, customer rates) would be
in addition to the impact of the acquisition itselfon rate base.
20 Id.
21 Id.
22 /d. at 3.
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DATE: 2/24/2020
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill requires the PSC to adopt implementing rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Appraisals
The bill does not specify who may choose the two appraisers used to determine a utility system's fair
market value. The bill could be clarified on this point.
The PSC notes that it has no expertise in property appraisal and suggests that an agency with such
expertise may be a more appropriate choice to establish the list of approved appraisers required by the
bill. 23
While the bill does not specify who may choose the two appraisers, the bill provides that one appraiser
will represent and be paid by the acquiring utility and the other appraiser will represent and be paid by
the utility system being acquired. Thus, it appears that one appraiser effectively works for the buyer
and the other effectively works for the seller. Under the bill, both parties stand to benefit from a higher
valuation of the utility system to be acquired: the seller's proceeds would be higher, and the buyer
would ultimately be authorized to earn a return on a higher rate base. This may create a perverse
incentive for the appraisals to come in higher than they might otherwise.
Other Drafting Issues
Under the bill, the acquiring utility and the utility system being acquired must jointly retain a licensed
engineer to assess the tangible assets of the system being acquired. The bill does not specify what
type of information this assessment should include. This may be clarified through implementing rules.
The bill specifies that it applies only to "acquiring utilities that provide water and wastewater services to
more than 10,000 customers and are engaged in a voluntary and mutually agreeable acquisition of a
water and wastewater system." A strict reading of this provision makes the bill applicable only to
utilities that offer both water and wastewater services to more than 10,000 customers. If the intent is to
make the bill applicable to utilities that offer either water or wastewater services to more than 10,000
customers, this provision could be clarified. Further, a strict reading of this provision makes the bill
apply only to the acquisition of a water and wastewater system. Because water and wastewater
systems are usually separate systems, this provision could be clarified to specify that it applies to
acquisition of a water system and to acquisition of a wastewater system.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
None.
23
Id. at 4.
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DATE: 2/24/2020
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 207 2020
1 A bill to be entitled
2 An act relating to acquisition of water and wastewater
3 systems; creating s. 367.0712, F.S.; authorizing
4 certain water and wastewater utilities to establish a
5 rate base value by using the fair market value when
6 acquiring a utility system; establishing a procedure
7 to determine the fair market value; requiring the rate
8 base value to be reflected in the acquiring utility's
9 next rate case for ratemaking purposes; specifying the
10 contents required for an application to the Public
11 Service Commission for approval of the rate base value
12 of the utility system; specifying duties of the
13 commission regarding applications; specifying the
14 commission's retained authority; providing
15 applicability; requiring the commission to adopt
16 rules; providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Section 367.0712, Florida Statutes, is created
21 to read:
22 367.0712 Determination of value.-
23 (1) When a utility acquires an existing utility system,
24 the utility may establish a rate base value of the acquired
25 utility system by using the fair market value of the utility
Page 1 of 4
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 207 2020
26 system instead of the system's original cost.
27 (2) (a) The fair market value of a utility system to be
28 acquired must be based on appraisals conducted by two licensed
29 appraisers chosen from a list established by the commission.
30 1. One appraiser shall represent and be paid by the
31 acquiring utility and one appraiser shall represent and be paid
32 by the utility system being acquired.
33 2. Each appraiser shall determine the fair market value
34 using the Uniform Standards of Professional Appraisal Practice,
35 employing cost, market, and income approaches in assessing the
36 value.
37 3. For ratemaking purposes, the fair market value is the
38 average of the two appraisals.
39 4. The original source of funding for the utility system
40 being acquired is not relevant to an evaluation of fair market
41 value.
42 (b) The acquiring utility and utility system being
43 acquired shall jointly retain a licensed engineer to conduct an
44 assessment of the tangible assets of the utility system and the
45 assessment shall be used by the two appraisers in determining
46 the fair market value of the system.
47 (c) The acquiring utility may include in the cost of the
48 acquired utility system:
49 1. Reasonable fees paid to the appraisers, if approved by
50 the commission.
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
HB 207 2020
51 2. Reasonable transaction and closing costs incurred by
52 the acquiring utility.
53 (d) The rate base value of the acquired utility system,
54 which must be reflected in the acquiring utility's next general
55 rate case for ratemaking purposes, is equal to the lesser of the
56 purchase price negotiated between the parties to the sale or the
57 fair market value, and the fees and costs authorized in
58 paragraph (c).
59 (3) An application to the commission for approval of the
60 rate base value of the utility system to be acquired must
61 contain the following:
62 (a) Copies of the appraisals performed by the appraisers
63 pursuant to paragraph ( 2) (a) .
64 (b) Each deficiency identified by the engineering
65 assessment conducted pursuant to paragraph (2) (b) and a 3-year
66 plan for prudent and necessary infrastructure improvements.
67 (c) The projected rate impact for the selling utility's
68 customers for the next 5 years.
69 (d) The average of the appraisals, which shall constitute
70 the fair market value of the system.
71 ( e) The assessment of tangible assets pursuant to ( 2) (b) .
72 (f) The contract of sale.
73 (g) The estimated value of fees and transaction and
74 closing costs to be incurred by the acquiring utility.
75 (h) A tariff, including rates equal to the rates of the
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
HB 207 2020
76 selling utility.
77 ( 4) If the application complies with the requirements of
78 subsection (3), the commission shall issue a final order
79 approving or denying the application within 6 months after the
80 date on which the application was filed. An order approving an
81 application shall determine the rate base value of the acquired
82 utility system for ratemaking purposes in a manner consistent
83 with this section.
84 (5) Notwithstanding any provision in this section, the
85 commission retains its authority under this chapter to set rates
86 for the acquired utility system in future rate cases and may
87 classify the acquired utility system as a separate entity for
88 ratemaking purposes, consistent with the public interest.
89 (6) This section applies to acquiring utilities that
90 provide water and wastewater services to more than 10,000
91 customers and are engaged in a voluntary and mutually agreeable
92 acquisition of a water and wastewater system.
93 (7) The commission shall adopt rules to implement this
94 section.
95 Section 2. This act shall take effect July 1, 2020.
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COMMERCE COMMITTEE
HB 207 by Rep. McClain
ACQUISITION OF WATER AND WASTEWATER
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. McClain (Strike-all, #763713)
• Reorganizes and streamlines existing provisions of the bill.
• Clarifies ambiguous language concerning applicability of the bill.
• Specifies the Public Service Commission's discretion to establish rate base
consistent with the public interest.
• Requires consideration of potential cost efficiencies when projecting the rate
impacts associated with a utility acquisition.
• Extends the Commission's review period to 8 months.
• Clarifies that the bill applies to arms-length acquisitions of both investor-owned
utility systems and government owned or operated systems.
• Allows an intergovernmental utility authority to acquire a water or wastewater
system that was previously acquired through eminent domain if at least 10 years
have passed since that system was acquired by eminent domain.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Paragraph (g) of subsection (7) of section
7 163.01, Florida Statutes, is amended to read:
8 163.01 Florida Interlocal Cooperation Act of 1969.-
9 ( 7)
10 (g)l. Notwithstanding any other provisions of this
11 section, any separate legal entity created under this section,
12 the membership of which is limited to municipalities and
13 counties of the state, and which may include a special district
14 in addition to a municipality or county or both, may acquire,
15 own, construct, improve, operate, and manage public facilities,
16 or finance facilities on behalf of any person, relating to a
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
17 governmental function or purpose, including, but not limited to,
18 wastewater facilities, water or alternative water supply
19 facilities, and water reuse facilities, which may serve
20 populations within or outside of the members of the entity.
21 Notwithstanding s. 367.171(7), any separate legal entity created
22 under this paragraph is not subject to Public Service Commission
23 jurisdiction. The separate legal entity may not provide utility
24 services within the service area of an existing utility system
25 unless it has received the consent of the utility.
26 2. For purposes of this paragraph, the term:
27 a. "Host government" means the governing body of the
28 county, if the largest number of equivalent residential
29 connections currently served by a system of the utility is
30 located in the unincorporated area, or the governing body of a
31 municipality, if the largest number of equivalent residential
32 connections currently served by a system of the utility is
33 located within that municipality's boundaries.
34 b. "Separate legal entity" means any entity created by
35 interlocal agreement the membership of which is limited to two
36 or more special districts, municipalities, or counties of the
37 state, but which entity is legally separate and apart from any
38 of its member governments.
39 c. "System" means a water or wastewater facility or group
40 of such facilities owned by one entity or affiliate entities.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
41 d. "Utility" means· a water or wastewater utility and
42 includes every person, separate legal entity, lessee, trustee,
43 or receiver owning, operating, managing, or controlling a
44 system, or proposing construction of a system, who is providing,
45 or proposes to provide, water or wastewater service to the
46 public for compensation.
47 3. A separate legal entity that seeks to acquire any
48 utility shall notify the host government in writing by certified
49 mail about the contemplated acquisition not less than 30 days
50 before any proposed transfer of ownership, use, or possession of
51 any utility assets by such separate legal entity. The potential
52 acquisition notice shall be provided to the legislative head of
53 the governing body of the host government and to its chief
54 administrative officer and shall provide the name and address of
55 a contact person for the separate legal entity and information
56 identified ins. 367.071(4) (a) concerning the contemplated
57 acquisition.
58 4.a. Within 30 days following receipt of the notice, the
59 host government may adopt a resolution to become a member of the
60 separate legal entity, adopt a resolution to approve the utility
61 acquisition, or adopt a resolution to prohibit the utility
62 acquisition by the separate legal entity if the host government
63 determines that the proposed acquisition is not in the public
64 interest. A resolution adopted by the host government which
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 ( 2020)
Amendment No. 1
65 prohibits the acquisition may include conditions that would make
66 the proposal acceptable to the host government.
67 b. If a host government adopts a membership resolution,
68 the separate legal entity shall accept the host government as a
69 member on the same basis as its existing members before any
70 transfer of ownership, use, or possession of the utility or the
71 utility facilities. If a host government adopts a resolution to
72 approve the utility acquisition, the separate legal entity may
73 complete the acquisition. If a host government adopts a
74 prohibition resolution, the separate legal entity may not
75 acquire the utility within that host government's territory
76 without the specific consent of the host government by future
77 resolution. If a host government does not adopt a prohibition
78 resolution or an approval resolution, the separate legal entity
79 may proceed to acquire the utility after the 30-day notice
80 period without further notice.
81 5. After the acquisition or construction of any utility
82 systems by a separate legal entity created under this paragraph,
83 revenues or any other income may not be transferred or paid to a
84 member of a separate legal entity, or to any other special
85 district, county, or municipality, from user fees or other
86 charges or revenues generated from customers that are not
87 physically located within the jurisdictional or service delivery
88 boundaries of the member, special district, county, or
89 municipality receiving the transfer or payment. Any transfer or
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
90 payment to a member, special district, or other local government
91 must be solely from user fees or other charges or revenues
92 generated from customers that are physically located within the
93 jurisdictional or service delivery boundaries of the member,
94 special district, or local government receiving the transfer of
95 payment.
96 6. This section is an alternative provision otherwise
97 provided by law as authorized ins. 4, Art. VIII of the State
98 Constitution for any transfer of power as a result of an
99 acquisition of a utility by a separate legal entity from a
100 municipality, county, or special district.
101 7. The entity may finance or refinance the acquisition,
102 construction, expansion, and improvement of such facilities
103 relating to a governmental function or purpose through the
104 issuance of its bonds, notes, or other obligations under this
105 section or as otherwise authorized by law. The entity has all
106 the powers provided by the interlocal agreement under which it
107 is created or which are necessary to finance, own, operate, or
108 manage the public facility, including, without limitation, the
109 power to establish rates, charges, and fees for products or
110 services provided by it, the power to levy special assessments,
111 the power to sell or finance all or a portion of such facility,
112 and the power to contract with a public or private entity to
113 manage and operate such facilities or to provide or receive
114 facilities, services, or products. Except as may be limited by
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
115 the interlocal agreement under which the entity is created, all
116 of the privileges, benefits, powers, and terms of s. 125.01,
117 relating to counties, ands. 166.021, relating to
118 municipalities, are fully applicable to the entity. However,
119 neither the entity nor any of its members on behalf of the
120 entity may exercise the power of eminent domain over the
121 facilities or property of any existing water or wastewater plant
122 utility system, nor may the entity acquire title to any water or
123 wastewater plant utility facilities, other facilities, or
124 property which was acquired by the use of eminent domain after
125 the effective date of this act unless 10 or more years have
126 elapsed since the date of the acquisition by eminent domain.
127 Bonds, notes, and other obligations issued by the entity are
128 issued on behalf of the public agencies that are members of the
129 entity.
130 8. Any entity created under this section may also issue
131 bond anticipation notes in connection with the authorization,
132 issuance, and sale of bonds. The bonds may be issued as serial
133 bonds or as term bonds or both. Any entity may issue capital
134 appreciation bonds or variable rate bonds. Any bonds, notes, or
135 other obligations must be authorized by resolution of the
136 governing body of the entity and bear the date or dates; mature
137 at the time or times, not exceeding 40 years from their
138 respective dates; bear interest at the rate or rates; be payable
139 at the time or times; be in the denomination; be in the form;
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Bill No. HB 207 ( 2020)
Amendment No. 1
140 carry the registration privileges; be executed in the manner; be
141 payable from the sources and in the medium or payment and at the
142 place; and be subject to the terms of redemption, including
143 redemption prior to maturity, as the resolution may provide. If
144 any officer whose signature, or a facsimile of whose signature,
145 appears on any bonds, notes, or other obligations ceases to be
146 an officer before the delivery of the bonds, notes, or other
147 obligations, the signature or facsimile is valid and sufficient
148 for all purposes as if he or she had remained in office until
14 9 the delivery. The bonds, notes, or other obligations may be sold
150 at public or private sale for such price as the governing body
151 of the entity shall determine. Pending preparation of the
152 definitive bonds, the entity may issue interim certificates,
153 which shall be exchanged for the definitive bonds. The bonds may
154 be secured by a form of credit enhancement, if any, as the
155 entity deems appropriate. The bonds may be secured by an
156 indenture of trust or trust agreement. In addition, the
157 governing body of the legal entity may delegate, to an officer,
158 official, or agent of the legal entity as the governing body of
159 the legal entity may select, the power to determine the time;
160 manner of sale, public or private; maturities; rate of interest,
161 which may be fixed or may vary at the time and in accordance
162 with a specified formula or method of determination; and other
163 terms and conditions as may be deemed appropriate by the
164 officer, official, or agent so designated by the governing body
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 ( 2020)
Amendment No. 1
165 of the legal entity. However, the amount and maturity of the
166 bonds, notes, or other obligations and the interest rate of the
167 bonds, notes, or other obligations must be within the limits
168 prescribed by the governing body of the legal entity and its
169 resolution delegating to an officer, official, or agent the
170 power to authorize the issuance and sale of the bonds, notes, or
171 other obligations.
172 9. Bonds, notes, or other obligations issued under this
173 paragraph may be validated as provided in chapter 75. The
174 complaint in any action to validate the bonds, notes, or other
175 obligations must be filed only in the Circuit Court for Leon
17 6 County. The notice required to be published bys. 75.06 must be
177 published in Leon County and in each county that is a member of
178 the entity issuing the bonds, notes, or other obligations, or in
179 which a member of the entity is located, and the complaint and
180 order of the circuit court must be served only on the State
181 Attorney of the Second Judicial Circuit and on the state
182 attorney of each circuit in each county that is a member of the
183 entity issuing the bonds, notes, or other obligations or in
184 which a member of the entity is located. Section 75.04(2) does
185 not apply to a complaint for validation brought by the legal
186 entity.
187 10. The accomplishment of the authorized purposes of a
188 legal entity created under this paragraph is in all respects for
189 the benefit of the people of the state, for the increase of
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 ( 2020)
Amendment No. 1
190 their commerce and prosperity, and for the improvement of their
191 health and living conditions. Since the legal entity will
192 perform essential governmental functions for the public health,
193 safety, and welfare in accomplishing its purposes, the legal
194 entity is not required to pay any taxes or assessments of any
195 kind whatsoever upon any property acquired or used by it for
196 such purposes or upon any revenues at any time received by it,
197 whether the property is within or outside the jurisdiction of
198 members of the entity. The exemption provided in this paragraph
199 applies regardless of whether the separate legal entity enters
200 into agreements with private firms or entities to manage,
201 operate, or improve the utilities owned by the separate legal
202 entity. The bonds, notes, and other obligations of an entity,
203 their transfer, and the income therefrom, including any profits
204 made on the sale thereof, are at all times free from taxation of
205 any kind by the state or by any political subdivision or other
206 agency or instrumentality thereof. The exemption granted in this
207 subparagraph is not applicable to any tax imposed by chapter 220
208 on interest, income, or profits on debt obligations owned by
209 corporations.
210 Section 2. Section 367.0712, Florida Statutes, is created
211 to read:
212 367.0712 Alternative process to establish rate base value
213 of acquired system.-
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
214 (1) (a) When a utility acquires an existing utility system,
215 including a system described in subsection (2) of s. 367.022,
216 the utility may petition the commission to establish a rate base
217 value for the utility system being acquired that is determined
218 using the valuation process described in this section instead of
219 the system's original cost. If the petition meets the filing
220 requirements of subsection (3), the commission, no later than 8
221 months after the date the complete petition is filed, shall
222 issue a final order on the petition. The commission may grant
223 the petition, in whole or in part or with modifications in the
224 public interest, or may deny the petition if in the public
225 interest. The commission may not approve a rate base value
226 higher than that requested in the petition.
227 (b) The rate base value established by the commission
228 under this section shall be used for ratemaking purposes in the
229 acquiring utility's next general rate case. The rate base value
230 may not exceed the lesser of the purchase price negotiated
231 between the parties to the acquisition transaction or the
232 average of the two appraisals conducted under subsection (2),
233 except that it may also include reasonable transaction and
234 closing costs incurred by the acquiring utility and reasonable
235 fees paid to the appraisers.
236 (2) (a) For purposes of this section, the utility system
237 being acquired must be appraised by two licensed appraisers
238 chosen from a list established by the commission. One appraiser
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Bill No. HB 207 (2020)
Amendment No. 1
239 shall be chosen and paid by the acquiring utility, and one
240 appraiser shall be chosen and paid by the utility system being
241 acquired. Each appraiser shall provide an appraisal of the value
242 of the utility system being acquired consistent with the Uniform
243 Standards of Professional Appraisal Practice.
244 (b) The acquiring utility and the utility system being
245 acquired shall jointly retain a licensed engineer to conduct an
246 assessment of the tangible assets of the utility system being
247 acquired, and the assessment shall be provided to the two
248 appraisers for use in determining the value of the system.
249 (3) A petition filed under this section to establish the
250 rate base value for a utility system being acquired must contain
251 the following:
252 (a) The requested rate base value for the utility system
253 being acquired.
254 (b) Copies of the appraisals required by this section,
255 including the average of the valuations produced by each
256 appraisal.
257 (c) A copy of the assessment of tangible assets required
258 by this section.
259 (d) A 3-year plan to address each deficiency identified by
260 the assessment of tangible assets required by this section. The
261 plan must address impact on quality of service and address any
262 planned improvements to water quality.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
263 (e} The 5-year projected rate impact on the customers of
264 the utility system being acquired, including, but not limited
265 to, the rate impact of the following:
266 (i) Any cost efficiencies expected to result from the
267 transaction; and
268 (ii) Use of this section, in lieu of the original cost
269 method, to establish rate base.
270 (f) The contract of sale.
271 (g) The estimated value of fees and transaction and
272 closing costs to be incurred by the acquiring utility.
273 (h) A tariff, including rates equal to the rates of the
274 utility system being acquired.
275 (4) Notwithstanding any provision in this section, the
276 commission retains its authority under this chapter to set rates
277 for the acquired utility system in future rate cases and may
278 classify the acquired utility system as a separate entity for
279 ratemaking purposes, as it deems to be in the public interest.
280 (5) This section applies to acquiring utilities that
281 provide water service, wastewater service, or both to more than
282 10,000 customers and are engaged in an arms-length acquisition
283 of a water system, wastewater system, or both types of systems.
284 (6) The commission shall adopt rules to implement this
285 section.
286 Section 3. This act shall take effect July 1, 2020.
287
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 207 (2020)
Amendment No. 1
288
289 T I T L E A ME N D ME N T
290 Remove everything before the enacting clause and insert:
291 An act relating to acquisition of water and wastewater systems;
292 amending s. 163.01, F.S.; providing a condition under which
293 certain entities may acquire title to any water or wastewater
294 plant utility facilities, other facilities, or property, that
295 were previously acquired by eminent domain; creating s.
296 367.0712, F.S.; establishing an alternative method by which the
297 Public Service Commission, upon petition by certain water and
298 wastewater utilities, may establish the rate base value for an
299 acquired utility system; specifying duties of the commission
300 regarding petitions and providing a standard of review;
301 requiring the approved rate base value to be reflected in the
302 acquiring utility's next rate case for ratemaking purposes;
303 establishing a procedure for appraisal of the acquired utility
304 system; specifying the contents required for a petition to the
305 Public Service Commission for approval of the rate base value of
306 the acquired utility system; specifying the commission's
307 retained authority; providing applicability; requiring the
308 commission to adopt rules; providing an effective date.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 295 Construction Defects
SPONSOR(S): Civil Justice Subcommittee, Santiago
TIED BILLS: IDEN./SIM. BILLS: SB 1488
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice Subcommittee 9 Y, 4 N, As CS Mawn Luczynski
2) Commerce Committee Brackett D Hamon
3) Judiciary Committee
SUMMARY ANALYSIS
A "construction defect" is a deficiency in, or a deficiency arising out of, the design, specifications, surveying,
planning, supervision, observation of construction, or construction, repair, alteration, or remodeling of real
property ("property"). A property owner, including a subsequent purchaser or a community association
("claimant"), may bring a civil action alleging a construction defect claim against the person or party
responsible for the construction defect ("respondent") in a court of competent jurisdiction. A claimant must
bring such an action within four years after project completion or, in the case of a latent defect, within ten years
of the later of certain statutorily-specified events.
However, at least 60 days before a claimant may bring a construction defect claim in court, or at least 120 days
before bringing such a claim if it involves an association representing more than 20 parcels, the claimant must
serve written notice of the claim on the respondent. The respondent then has the right to inspect the allegedly
defective property, to serve a copy of the notice of claim on any person the respondent believes is responsible
for the alleged defect ("secondary respondent"}, and to respond with a written settlement offer or to dispute the
claim. A settlement offer may include defect repair, monetary payment, or a combination of repairs and
monetary payment. If the respondent disputes the claim, or makes an offer to repair or for monetary payment
but does not timely follow through, the claimant may bring the claim in court without further notice.
CS/HB 295:
• Creates real estate disclosure requirements relating to construction defect claims for sellers of real
property, real estate agents, and brokers.
• Provides that a claimant must attempt to resolve a construction defect claim under any applicable
warranty before filing a notice of claim relating to the defect.
• Increases the specificity of detail a claimant must provide in the notice of claim.
• Requires a claimant to affirm the claimant's personal knowledge of the alleged defect, acknowledge
that the claimant is aware of the real estate disclosure obligation and penalties for perjury, and sign the
notice of claim under penalty of perjury.
• Requires a special verdict form for all construction defect litigation.
• Provides for notice of a construction defect settlement or judgment to a mortgagee or assignee under
specified circumstances.
The bill does not have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0295b.COM.D0CX
DATE: 2/23/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
A "construction defect" is a deficiency in, or a deficiency arising out of, the design, specifications,
surveying, planning, supervision, observation of construction, or construction, repair, alteration, or
remodeling of real property 1 ("property") resulting from:
• Defective material, products, or components used in the construction or remodeling;
• A violation of the Florida Building Code; 2
• A failure of real property's design to meet the applicable professional standards of care at the
time of governmental approval; or
• A failure to construct or remodel real property in accordance with accepted trade standards for
good and workmanlike construction at the time of construction. 3
A property owner, including a subsequent purchaser or a community association 4 ("claimant"), may
bring a civil action alleging a construction defect claim against the contractor, subcontractor, supplier, or
design professional responsible for the construction defect ("respondent") in a court of competent
jurisdiction. A claimant must bring such an action within four years after project completion or, if the
case of a latent defect, 5 within ten years after the date of the later of:
• Actual possession by the owner;
• The issuance of a certificate of occupancy;
• Abandonment of construction if not completed; or
• Completion or termination of the contract between the professional engineer, registered
architect, or licensed contractor and his or her employer. 6
Notice of Claim
To reduce the need for litigation, Florida law requires a claimant to serve written notice of claim on the
respondent at least 60 days before the claimant may bring a construction defect claim in court, or at
least 120 days before bringing such a claim if it involves an association representing more than 20
parcels. 7 The notice of claim must describe in reasonable detail the alleged defect's nature and, if
known, the damage or loss caused by the defect. 8 The notice of claim must also identify the alleged
defect's location with enough detail to allow the respondent to easily locate the defect. 9
Within 10 days after service of the notice of claim, or within 30 days after service if the claim involves
an association representing more than 20 parcels, the respondent may serve a copy of the notice of
claim ("notice copy") to each contractor, subcontractor, supplier, or design professional the respondent
1
"Real property" means land that is improved and the improvements on such land, including fixtures, manufactured housing, or mobile
homes. S. 558.002(8), F.S.
2
Any person or party damaged as a result of a Florida Building Code violation has a cause of action against the person or party who
committed the violation, but if the person or party obtained the required building permit, any local government or public agency
authorized to enforce the Florida Building Code approves the plans, the construction project passes all required inspections, and if
there is no personal injury or damage to other property, there is no cause of action unless the person or party knew or should have
known that the violation existed. S. 553.84, F.S.
3
S. 558.002(5), F.S.
4
S. 558.002(2), F.S. "Association" has the same meaning as in sections 718.103(2) (Condominium association), 719.301(9)
(Cooperative association), 720.301 (9) (Homeowners' association) and 723.075, F .S. (Mobile home park homeowners' association).
5
A "latent defect" is a hidden or concealed defect that could not be discovered by reasonable and customary observation or inspection
made with ordinary care. Blacks Law Dictionary 611 (6th ed. 1996).
6
S. 95.11 (3)(c), F.S.
7
Ss. 558.001 and 558.004(1)(a), F.S.
8 S. 558.004(1)(b), F.S.
9 fd.
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reasonably believes is responsible for each defect specified in the notice ("secondary respondent") and
must note the specific defect for which he or she believes each secondary respondent is responsible. 10
Inspection and Testing
Within 30 days after service of the notice of claim, or within 50 days after service if the claim involves
an association representing more than 20 parcels, the respondent has a right to perform a reasonable
inspection of the property to assess each alleged defect and the extent of any repairs or replacements
necessary. 11 The claimant must provide the respondent reasonable access to the property during
normal working hours, and the respondent must reasonably coordinate the timing and manner of the
inspections with the claimant to minimize the number of inspections. 12 Each secondary respondent is
entitled to inspect the property in the same manner as the respondent. 13
If the respondent determines that destructive testing is necessary to reveal the alleged defect's nature
and cause, the respondent must give the claimant written notice describing the destructive testing to be
performed, the person chosen to do the testing, the estimated amount of time needed for testing and
repairs, and the money offered for repair costs. 14 If the claimant objects to the person chosen to
perform the testing, the respondent must provide the claimant with a list of three qualified persons from
which the claimant may choose one person to perform the testing. 15 Any destructive testing must be
done at a mutually agreeable time, must not make the property uninhabitable, and does not give the
party performing the destructive testing or associated repairs construction lien 16 rights unless the
claimant personally contracts with such party. 17 Additionally, the claimant has a right to observe the
destructive testing. 18 However, if the claimant refuses to agree to and subsequently allow reasonable
destructive testing, the claimant loses the right to claim damages which could have been avoided or
mitigated had destructive testing been done when requested and a remedy properly executed. 19
Settlement Offers
Within 15 days after service of a notice copy, or within 30 days of service if the claim involves an
association with more than 20 parcels, the secondary respondent must give the respondent a written
reply. 20 Such reply must include a report, if any, of the scope of any property inspections conducted by
the secondary respondent and the findings and results of such inspections. 21 Additionally, within 45
days of service of the notice of claim, or within 75 days of service if the claim involves an association
representing more than 20 parcels, the respondent must give the claimant a written reply. 22 Such
replies must include a written:
• Offer to remedy the alleged defect at no cost to the claimant, a detailed description of proposed
repairs, and a timetable for repair completion;
• Offer to compromise and settle the claim by monetary payment and a timetable for making
payment;
• Offer to compromise and settle the claim by a combination of repairs and monetary payment
that includes a detailed description of proposed repairs and a timetable for repair completion
and monetary payment;
10 S. 558.004(3), F.S.
11 S. 558.004(2), F.S.
12 Jd.
13 S. 558.004(3), F.S.
14 S. 558.004(2)(a) and (b), F.S.
15
S. 558.004(2)
16
Under Part I of chapter 713, F .S., a contractor, subcontractor, material supplier, laborer or a professional (such as an architect or
landscape artist) may claim a lien on a property on or for which such person performed work or provided materials even where such
person does not have a direct contract with the property owner.
17
S. 558.004(2)(d), (f), and (g), F.S.
1a S. 558.004(2)(e), F.S.
19 S. 558.004(2)(9), F.S.
20 S. 558.004(4), F.S.
21 Id.
22 S. 558.004(5), F.S.
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• Statement that the person disputes the claim and will not remedy the alleged defect or
compromise and settle the claim; or
• Statement that a monetary payment will be determined by the person's insurer within 30 days
after notification to the insurer. 23
A claimant who receives a timely settlement offer must accept or reject the offer by serving written
notice of such acceptance or rejection on the respondent within 45 days after receiving the offer. 24
However, a claimant may, without further notice, bring an action against the respondent if the
respondent disputes the claim and will not remedy the alleged defect or compromise and settle the
claim, or does not timely respond to the notice of claim. 25
If the claimant timely and properly accepts a repair offer, the claimant must give the respondent
reasonable access to the property during normal working hours to perform the repairs by the agreed-
upon completion date. 26 If the respondent completes the repairs or makes payment within the agreed
time and in the agreed manner, the claimant cannot bring an action for the claim described in the
notice. 27 However, a claimant may, without further notice, bring an action against the respondent if the
claimant timely and properly accepted a repair or payment offer, but the repairs or payment are not
made within the agreed time and in the agreed manner. 28
Special Verdicts
A verdict is the final decision of the jury concerning those matters of fact which were submitted to it by
the court for its determination. 29 A general verdict is the jury's final declaration as to the truth of the
matter submitted to their determination and which is at issue, while a special verdict is one in which the
jury, in a civil case, makes separate findings on the basis of the evidence presented. 30 While special
verdicts are required in some jury trials, such as those involving comparative negligence, special
verdicts are allowed, but not required, in construction defect claims. 31
Real Estate Disclosures
Where the seller of a home knows of facts materially affecting the property's value which are not readily
observable to and are not known by the buyer, which may include latent construction defects, the seller
must disclose such facts to the buyer. 32 A real estate agent and a broker must also disclose such facts
when they are known to him or her. 33
Notice to Mortgagee or Assignee
A mortgage is any conveyance, obligation conditioned or defeasible, bill of sale or other instrument of
writing conveying or selling property to secure the payment of money. 34 A mortgage gives the
mortgagee or its assignee a specific lien on the property described in the mortgage but does not
convey legal title or the right of possession to the property to the mortgagee or assignee. 35
23 S. 558.004(4) and (5), F.S.
24
S. 558.004(7), F.S.
25
S. 558.004(6), F.S.
2s S. 558.004(8), F.S.
27 Id.
26 Id.
29
Fla. Jur. 2d Trial § 282.
3o Id.
31
See Lawrence v. Florida East Coast Railway Co., 346 So. 2d 1012 (Fla. 3d DCA 1958); see also ch. 558, F.S.
32 Johnson v. Davis, 480 So. 2d 625 (Fla. 1985).
33 Johnson v. Davis, 480 So. 2d at 625.
34 S. 697.01(1), F.S.
35 S. 697.02, F.S.
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Some mortgage contracts require the mortgagor to notify the mortgagee if the property is damaged.
Additionally, many payments on a property insurance claim are made out to both the mortgagor and the
mortgagee, giving the mortgagee notice of property damage even where such notice is not required by
contract. However, if a claimant succeeds on a construction defect claim related to a property on which
a mortgagee or its assignee has a security interest, Florida law does not require the claimant to notify
the mortgagee or assignee of the defect.
Effect of Proposed Changes
Notice of Claim
CS/HB 295 prohibits a claimant from filing a notice of claim unless the claimant has first submitted a
claim for the alleged defect under any applicable warranty and the warranty provider has denied the
claim or failed to offer a satisfactory remedy. The bill also provides that, in addition to information
required under current law, a notice of claim must:
• Describe the nature of the alleged defect and its location in specific detail.
• Include any repair estimates or expert reports the claimant obtained relating to the alleged
defect and, if the alleged defect is visible, at least one photograph of such defect.
• Affirm the claimant has personal knowledge of the alleged defect.
• Acknowledge the claimant is aware of real estate disclosure obligations and perjury penalties.
• Be signed by the claimant under penalty of perjury.
Further, the bill requires a respondent to serve a notice copy on any secondary respondent, removing
the respondent's discretion over whether to involve the secondary respondents.
Inspection and Testing
The bill expressly provides that a respondent must reasonably coordinate the timing of any property
inspections with the claimant and any secondary respondents to minimize the number of inspections.
The bill also requires a claimant to give a secondary respondent reasonable access to the property for
defect inspections.
Special Verdicts
The bill requires both a jury verdict and a final judgment36 issued in a construction defect claim to
include a detailed description of the nature of the defect and the monetary amount awarded against
each party separately as well as the monetary amount of the judgment attributable to:
• Repairing or replacing the party's defective work.
• Repairing or replacing other non-defective property damaged by the defective work.
• Other damages awarded against the party.
Real Estate Disclosures
The bill requires the seller of real property to disclosure to a buyer, in a written disclosure statement set
forth in the sale contract or a separate writing:
• Whether the seller, or an association acting on the seller's behalf, made a construction defect
claim relating to the real property subject to the sale contract;
• The specific nature of the defect alleged;
• The claim's outcome; and
• Whether the defect was repaired, and if so, a repair description.
36 A final judgment is the last decision from a court that resolves all issues in dispute and settles the parties' rights with respect to those
issues. A final judgment leaves nothing except decisions on how to enforce the judgment, whether to award costs, and whether to file
an appeal. Legal Information Institute, Final Judgment, https://www.law.cornell.edu/wex/final judgment (last visited Jan. 31, 2020).
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Further, the bill requires a real estate agent or broker to disclose, if known, whether the seller or an
association acting on the seller's behalf made a construction defect claim relating to the property
subject to the sale contract, the outcome of the claim, and what, if any, repairs were made. These
provisions ensure a prospective buyer has notice of any unrepaired construction defects prior to
purchasing a property.
Notice to Mortgagee or Assignee
The bill provides that, if a construction defect claim results in a monetary settlement or judgment in the
claimant's favor, and a mortgagee or assignee has a security interest in the real property related to the
claim, the claimant must, within 90 days of the claim's resolution, send written notice to the mortgagee
or assignee of:
• The specific nature of the defect;
• The claim's outcome, including the amount of any monetary settlement reached or judgment
awarded; and
• Whether the defect was repaired and a repair description or, if repairs have not begun, the
anticipated repair start date.
If defect repairs are completed after the claimant sends such notice, the bill requires the claimant to
supplement the notice within 30 days of repair completion. This ensures that the mortgagee or
assignee has knowledge of property defects which may decrease the value of property in which it has a
security interest.
The bill provides an effective date of July 1, 2020.
B. SECTION DIRECTORY:
Section 1: Amends s. 475.278, relating to authorized brokerage relationships; presumption of
transaction brokerage; required disclosures.
Section 2: Amends s. 558.004, F.S., relating to notice and opportunity to repair.
Section 3: Creates s. 558.0045, F.S., relating to construct defect litigation; special requirements.
Section 4: Creates s. 558.006, F.S., relating to construction defect disclosure statement.
Section 5. Creates s. 558.007, F.S., relating to notice to mortgagee or assignee.
Section 6: Provides an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
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C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may reduce fraudulent construction defect claims, resulting in savings for home builders and
contractors which may then be passed on to consumers. The bill may also reduce litigation costs as
legitimate claims are resolved through the warranty process or settled.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to effect counties or municipalities.
2. Other:
None.
8. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On January 29, 2020, the Civil Justice Subcommittee adopted a strike-all amendment, as amended, and
reported the bill favorably as a committee substitute. The strike-all:
• Restored the authority of a condominium, cooperative, or homeowners' association to bring a
construction defect claim.
• Deleted provisions:
o Requiring mandatory non-binding arbitration of construction defect claims.
o Conditioning payment after a settlement or judgment on a construction defect claim on the
claimant entering into a repair contract.
o Requiring the claimant to enter into a repair contract within a specified time.
o Reducing the amount of any settlement or judgment to full contract price.
o Increasing the response period after service of a copy of the notice of claim.
• Created real estate disclosure requirements relating to construction defect claims for sellers of real
property, real estate agents, and brokers.
• Provided that a claimant must attempt to resolve a construction defect claim under any applicable
warranty before filing a notice of claim relating to the defect.
• Increased the specificity of detail a claimant must provide in the notice of claim.
• Required a claimant to affirm the claimant's personal knowledge of the alleged defect, acknowledge
that the claimant is aware of the real estate disclosure obligation and penalties for perjury, and sign
the notice of claim under penalty of perjury.
• Required a special verdict form for all construction defect litigation.
• Provided for notice of a construction defect settlement or judgment to a mortgagee or assignee
under specified circumstances.
This analysis is drafted to the committee substitute as passed by the Civil Justice Subcommittee.
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/HB 295 2020
1 A bill to be entitled
2 An act relating to construction defects; amending s.
3 475.278; requiring specified real estate licensees to
4 disclose a construction defect claim relating to
5 residential real property and its outcome under
6 specified circumstances; amending s. 558.004, F.S.;
7 requiring a claimant to submit a construction defect
8 claim to the warranty provider before serving a notice
9 of claim; providing notice requirements; providing
10 that a person who willfully includes a false statement
11 in a notice commits perjury; authorizing a person
12 served with a copy of a notice to perform a reasonable
13 inspection of the property subject to the claim;
14 providing inspection requirements for claimants and
15 persons served with a copy of a notice; requiring,
16 instead of authorizing, a person served with a notice
17 to serve a copy of the notice to specified persons
18 under certain circumstances; making technical changes;
19 creating s. 558.0045; providing jury verdict and final
20 judgment requirements relating to a construction
21 defect claim; creating s. 558.006; requiring a seller
22 of real property to disclose specified information
23 relating to a construction defect to a buyer; creating
24 s. 558.007; requiring a claimant to notify a mortgagee
25 or assignee within a specified timeframe after a
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26 settlement or judgment of a construction defect claim;
27 requiring a claimant to update the notice within a
28 specified timeframe under certain circumstances;
29 providing an effective date.
30
31 Be It Enacted by the Legislature of the State of Florida:
32
33 Section 1. Paragraph (d) of subsection (2), paragraphs (a)
34 and (c} of subsection (3), and paragraphs (a) and (c) of
35 subsection (4) of section 475.278, Florida Statutes, are amended
36 to read:
37 475.278 Authorized brokerage relationships; presumption of
38 transaction brokerage; required disclosures.-
39 (2) TRANSACTION BROKER RELATIONSHIP.-A transaction broker
40 provides a limited form of representation to a buyer, a seller,
41 or both in a real estate transaction but does not represent
42 either in a fiduciary capacity or as a single agent. The duties
43 of the real estate licensee in this limited form of
44 representation include the following:
45 (d} Disclosing all known facts that materially affect the
46 value of residential real property and are not readily
47 observable to the buyer, including whether the seller or an
48 association acting on the seller's behalf has made a
49 construction defect claim under chapter 558 relating to the
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50 property, the outcome of the claim, and what, if any, repairs
51 were made;
52 (3) SINGLE AGENT RELATIONSHIP.-
53 (a} Single agent; duties.-The duties of a real estate
54 licensee owed to a buyer or seller who engages the real estate
55 licensee as a single agent include the following:
56 1. Dealing honestly and fairly;
57 2. Loyalty;
58 3. Confidentiality;
59 4. Obedience;
60 5. Full disclosure;
61 6. Accounting for all funds;
62 7. Skill, care, and diligence in the transaction;
63 8. Presenting all offers and counteroffers in a timely
64 manner, unless a party has previously directed the licensee
65 otherwise in writing; and
66 9. Disclosing all known facts that materially affect the
67 value of residential real property and are not readily
68 observable, including whether the seller or an association
69 acting on the seller's behalf has made a construction defect
70 claim under chapter 558 relating to the property, the outcome of
71 the claim, and what, if any, repairs were made.
72 (c) Contents of disclosure.-
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73 1. Single agent duties disclosure.-The notice required
74 under subparagraph (b)l. must include the following information
75 in the following form:
76 SINGLE AGENT NOTICE
77 FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES OPERATING AS
78 SINGLE AGENTS DISCLOSE TO BUYERS AND SELLERS THEIR DUTIES.
79 As a single agent, ... (insert name of Real Estate Entity
80 and its Associates) ... owe to you the following duties:
81 1. Dealing honestly and fairly;
82 2. Loyalty;
83 3. Confidentiality;
84 4. Obedience;
85 5. Full disclosure;
86 6. Accounting for all funds;
87 7. Skill, care, and diligence in the transaction;
88 8. Presenting all offers and counteroffers in a timely
89 manner, unless a party has previously directed the licensee
90 otherwise in writing; and
91 9. Disclosing all known facts that materially affect the
92 value of residential real property and are not readily
93 observable, including whether the seller or an association
94 acting on the seller's behalf has made a construction defect
95 claim under chapter 558 relating to the property, the outcome of
96 the claim, and what, if any, repairs were made.
97
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Date Signature
98
99 2. Transition disclosure.-To gain the principal's written
100 consent to a change in relationship, a licensee must use the
101 following disclosure:
102 CONSENT TO TRANSITION TO
103 TRANSACTION BROKER
104 FLORIDA LAW ALLOWS REAL ESTATE LICENSEES WHO REPRESENT A BUYER
105 OR SELLER AS A SINGLE AGENT TO CHANGE FROM A SINGLE AGENT
106 RELATIONSHIP TO A TRANSACTION BROKERAGE RELATIONSHIP IN ORDER
107 FOR THE LICENSEE TO ASSIST BOTH PARTIES IN A REAL ESTATE
108 TRANSACTION BY PROVIDING A LIMITED FORM OF REPRESENTATION TO
109 BOTH THE BUYER AND THE SELLER. THIS CHANGE IN RELATIONSHIP
110 CANNOT OCCUR WITHOUT YOUR PRIOR WRITTEN CONSENT.
111 As a transaction broker, ... (insert name of Real Estate Firm and
112 its Associates) ... , provides to you a limited form of
113 representation that includes the following duties:
114 1. Dealing honestly and fairly;
115 2. Accounting for all funds;
116 3. Using skill, care, and diligence in the transaction;
117 4. Disclosing all known facts that materially affect the
118 value of residential real property and are not readily
119 observable to the buyer, including whether the seller or an
120 association acting on the seller's behalf has made a
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121 construction defect claim under chapter 558 relating to the
122 property, the outcome of the claim, and what, if any, repairs
123 were made;
124 5. Presenting all offers and counteroffers in a timely
125 manner, unless a party has previously directed the licensee
126 otherwise in writing;
127 6. Limited confidentiality, unless waived in writing by a
128 party. This limited confidentiality will prevent disclosure that
129 the seller will accept a price less than the asking or listed
130 price, that the buyer will pay a price greater than the price
131 submitted in a written offer, of the motivation of any party for
132 selling or buying property, that a seller or buyer will agree to
133 financing terms other than those offered, or of any other
134 information requested by a party to remain confidential; and
135 7. Any additional duties that are entered into by this or
136 by separate written agreement.
137 Limited representation means that a buyer or seller is not
138 responsible for the acts of the licensee. Additionally, parties
139 are giving up their rights to the undivided loyalty of the
140 licensee. This aspect of limited representation allows a
141 licensee to facilitate a real estate transaction by assisting
142 both the buyer and the seller, but a licensee will not work to
143 represent one party to the detriment of the other party when
144 acting as a transaction broker to both parties.
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145 ................ I agree that my agent may assume the role and
146 duties of a transaction broker. [must be initialed or signed]
147 (4) NO BROKERAGE RELATIONSHIP.-
148 (a) No brokerage relationship; duties.-A real estate
149 licensee owes to a potential seller or buyer with whom the
150 licensee has no brokerage relationship the following duties:
151 1. Dealing honestly and fairly;
152 2. Disclosing all known facts that materially affect the
153 value of the residential real property which are not readily
154 observable to the buyer, including whether the seller or an
155 association acting on the seller's behalf has made a
156 construction defect claim under chapter 558 relating to the
157 property, the outcome of the claim, and what, if any, repairs
158 were made; and
159 3. Accounting for all funds entrusted to the licensee.
160 (c) Contents of disclosure.-The notice required under
161 paragraph (b) must include the following information in the
162 following form:
163 NO BROKERAGE RELATIONSHIP NOTICE
164 FLORIDA LAW REQUIRES THAT REAL ESTATE LICENSEES WHO HAVE NO
165 BROKERAGE RELATIONSHIP WITH A POTENTIAL SELLER OR BUYER DISCLOSE
166 THEIR DUTIES TO SELLERS AND BUYERS.
167 As a real estate licensee who has no brokerage relationship
168 with you, ... (insert name of Real Estate Entity and its
169 Associates) ... owe to you the following duties:
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170 1. Dealing honestly and fairly;
171 2. Disclosing all known facts that materially affect the
172 value of residential real property which are not readily
173 observable to the buyer, including whether the seller or an
174 association acting on the seller's behalf has made a
175 construction defect claim under chapter 558 relating to the
176 property, the outcome of the claim, and what, if any, repairs
177 were made.
178 3. Accounting for all funds entrusted to the licensee.
179 (Date)... . .. (Signature) ...
180 Section 2. Subsections (1) through (4) and subsection (15)
181 of section 558.004, Florida Statutes, are amended to read:
182 558.004 Notice and opportunity to repair.-
183 ( 1) (a) In actions brought alleging a construction defect,
184 the claimant shall, at least 60 days before filing any action,
185 or at least 120 days before filing an action involving an
186 association representing more than 20 parcels, serve written
187 notice of claim on the contractor, subcontractor, supplier, or
188 design professional, as applicable, which notice shall refer to
189 this chapter. If the construction defect claim arises from work
190 performed under a contract, the written notice of claim must be
191 served on the person with whom the claimant contracted. However,
192 a notice of claim may not be served under this chapter unless
193 the claimant has first properly submitted a claim for the
194 alleged construction defect under any applicable warranty, and
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195 the warranty provider has denied the claim or has not offered a
196 remedy satisfactory to the claimant within the time limits
197 provided in the warranty. This chapter provides a notice process
198 for a construction defect claim that has been denied or not
199 otherwise satisfied under any applicable warranty.
200 (b) The notice of claim must:
201 1. Describe in specific reasonable detail the nature of
202 each alleged construction defect~ -a-na-
203 2. Include, if the alleged construction defect or evidence
204 thereof is visible, at least one photograph of the alleged
205 defect or evidence thereof, any repair estimates or expert
206 reports obtained relating to the alleged defect, and a
207 description of, if known, the damage or loss resulting from the
208 alleged defect, if known.
209 3. Based upon at least a visual inspection by the claimant
210 or its agents, the notice of claim must identify the specific
211 location of each alleged construction defect sufficiently to
212 enable the responding parties to locate the alleged defect
213 without undue burden. The claimant has no obligation to perform
214 destructive or other testing for purposes of this notice.
215 4. Affirm that the claimant has personal knowledge of the
216 alleged construction defect.
217 5. Acknowledge that the claimant is aware of the real
218 estate disclosure obligation under s. 558.006 and of the
219 penalties for perjury under chapter 837.
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220 6. Be signed by the claimant and include the following
221 statement directly above the claimant's signature line in 18-
222 point uppercase, boldfaced type:
223
224 UNDER PENALTY OF PERJURY, I DECLARE THAT I HAVE READ THE
225 FOREGOING STATEMENT AND THE FACTS ALLEGED ARE TRUE TO THE BEST
226 OF MY KNOWLEDGE AND BELIEF.
227
228 (c) Any person who willfully includes a false statement in
229 the notice of claim required by this section is guilty of
230 perjury and, upon conviction, will be punished accordingly.
231 ~+e+- The claimant shall endeavor to serve the notice of
232 claim within 15 days after discovery of an alleged defect, but
233 the failure to serve notice of claim within 15 days does not bar
234 the filing of an action, subject to s. 558.003. This subsection
235 does not preclude a claimant from filing an action sooner than
236 60 days, or 120 days as applicable, after service of written
237 notice as expressly provided in subsection (6), subsection (7),
238 or subsection (8).
239 ~+a+- A notice of claim served pursuant to this chapter
240 shall not toll any statute of repose period under chapter 95.
241 (2) Within 30 days after service of the notice of claim,
242 or within 50 days after service of the notice of claim involving
243 an association representing more than 20 parcels, any 1:'fTe person
244 served with the notice of claim under subsection (1), or a copy
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245 thereof under subsection (3), may is entitled to perform a
246 reasonable inspection of the property or of each unit subject to
247 the claim to assess each alleged construction defect. An
248 association's right to access property for either maintenance or
249 repair includes the authority to grant access for the
250 inspection. The claimant must shall provide the person served
251 with notice under subsection (1), or a copy thereof under
252 subsection (3), and such person's contractors or agents
253 reasonable access to the property during normal working hours to
254 inspect the property to determine the nature and cause of each
255 alleged construction defect and the nature and extent of any
256 repairs or replacements necessary to remedy each defect. The
257 person served with notice under subsection (1), or a copy
258 thereof under subsection (3), must shall reasonably coordinate
259 the timing and manner of any and all inspections with the
260 claimant to minimize the number of inspections. The inspection
2 61 may include destructive testing by mutual agreement under the
262 following reasonable terms and conditions:
263 (a) If the person served with notice under subsection (1)
2 64 determines that destructive testing is necessary to determine
265 the nature and cause of the alleged defects, such person must
266 shall notify the claimant in writing.
267 (b) The notice must shall describe the destructive testing
268 to be performed, the person selected to do the testing, the
269 estimated anticipated damage and repairs to or restoration of
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270 the property resulting from the testing, the estimated amount of
271 time necessary for the testing and to complete the repairs or
272 restoration, and the financial responsibility offered for
273 covering the costs of repairs or restoration.
274 (c) If the claimant promptly objects to the person
275 selected to perform the destructive testing, the person served
276 with notice under subsection (1) must shall provide the claimant
277 with a list of three qualified persons from which the claimant
278 may select one such person to perform the testing. The person
279 selected to perform the testing must shall operate as an agent
280 or subcontractor of the person served with notice under
281 subsection (1) and must shall communicate with, submit any
282 reports to, and be solely responsible to the person served with
283 notice.
284 (d) The testing must shall be done at a mutually agreeable
285 time.
286 (e) The claimant or a representative of the claimant may
287 be present to observe the destructive testing.
288 (f) The destructive testing may shall not render the
289 property uninhabitable.
290 (g) There are shall be no construction lien rights under
291 part I of chapter 713 for the destructive testing caused by a
292 person served with notice under subsection (1) or for restoring
293 the area destructively tested to the condition existing before
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294 prior to testing, except to the extent the owner contracts for
295 the destructive testing or restoration.
296
297 If the claimant refuses to agree and thereafter permit
298 reasonable destructive testing, the claimant has shall have no
299 claim for damages which could have been avoided or mitigated had
300 destructive testing been allowed when requested and had a
301 feasible remedy been promptly implemented.
302 (3) Within 10 days after service of the notice of claim,
303 or within 30 days after service of the notice of claim involving
304 an association representing more than 20 parcels, the person
305 served with notice under subsection (1) must ffiaY serve a copy of
306 the notice of claim to each contractor, subcontractor, supplier,
307 or design professional whom it reasonably believes is
308 responsible for each defect specified in the notice of claim and
309 shall note the specific defect for which it believes the
310 particular contractor, subcontractor, supplier, or design
311 professional is responsible. The notice described in this
312 subsection may not be construed as an admission of any kind.
313 Each such contractor, subcontractor, supplier, and design
314 professional may inspect the property as provided in subsection
315 (2).
316 (4) Within 15 days after service of a copy of the notice
317 of claim under pursuant to subsection (3), or within 30 days
318 after service of the copy of the notice of claim involving an
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319 association representing more than 20 parcels, the contractor,
320 subcontractor, supplier, or design professional must serve a
321 written response to the person who served a copy of the notice
322 of claim. The written response must include a report, if any, of
323 the scope of any inspection of the property and the findings and
324 results of the inspection. The written response must include one
325 or more of the offers or statements specified in paragraphs
326 ( 5) (a) - ( e) , as chosen by the responding contractor,
327 subcontractor, supplier, or design professional, with all of the
328 information required for that offer or statement.
329 (15) Upon request, the claimant and any person served with
330 notice under pursuant to subsection (1) shall exchange, within
331 30 days after service of a written request, which request must
332 cite this subsection and include an offer to pay the reasonable
333 costs of reproduction, any design plans, specifications, and as-
334 built plans; videos and additional photographs and videos of the
335 alleged construction defect identified in the notice of claim;
336 expert reports not already provided that describe any defect
337 upon which the claim is made; subcontracts; purchase orders for
338 the work that is claimed defective or any part of such
339 materials; and maintenance records and other documents related
340 to the discovery, investigation, causation, and extent of the
341 alleged defect identified in the notice of claim and any
342 resulting damages. A party may assert any claim of privilege
343 recognized under the laws of this state with respect to any of
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344 the disclosure obligations specified in this chapter. In the
345 event of subsequent litigation, any party who failed to provide
346 the requested materials is shall be subject to such sanctions as
347 the court may impose for a discovery violation. Expert reports
348 exchanged between the parties may not be used in any subsequent
349 litigation for any purpose, unless the expert, or a person
350 affiliated with the expert, testifies as a witness or the report
351 is used or relied upon by an expert who testifies on behalf of
352 the party for whom the report was prepared.
353 Section 3. Section 558.0045, Florida Statutes, is created
354 to read:
355 558.0045 Construction defect litigation; special
356 requirements.-
357 (1) This section applies to all actions involving
358 construction defects, including civil suits and arbitrations.
359 (2) If a claimant proceeds to trial in an action, the jury
360 verdict and final judgment must include a detailed description
361 of the nature of the defect and the monetary amount awarded
362 against each liable party separately, including the monetary
363 amount of the award attributable to:
364 (a) Repairing or replacing the defective work.
365 (b) Repairing or replacing nondefective property damaged
366 by the defective work.
367 (c) Other recoverable damages authorized by law that are
368 awarded against the liable party.
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369 Section 4. Section 558.006, Florida Statutes, is created
370 to read:
371 558.006 Construction defect disclosure statement.-The
372 seller of real property must disclose to the buyer, before
373 closing, in a written disclosure statement set forth in the sale
374 contract or a separate writing:
375 (1) Whether the seller or an association acting on the
376 seller's behalf has made a claim under this chapter alleging a
377 construction defect relating to the real property subject to the
378 sale contract.
379 (2) The specific nature of the alleged defect.
380 (3) The outcome of the claim. This subsection does not
381 require the seller to disclose the amount of any monetary
382 settlement reached or judgment awarded.
383 (4) Whether the defect has been repaired and a description
384 of any repairs made.
385 Section 5. Section 558.007, Florida Statutes, is created
386 to read:
387 558.007 Notice to mortgagee or assignee.-
388 (1) If a notice of claim alleging a construction defect
389 under this chapter results in a monetary settlement or judgment
390 in favor of the claimant, and a mortgagee or assignee has a
391 security interest in the real property subject to the claim, the
392 claimant must, within 90 days after the resolution of the claim,
393 notify the mortgagee or assignee, in writing, of:
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394 (a) The specific nature of the defect.
395 (b) The outcome of the claim, including the amount of any
396 monetary settlement reached or judgment awarded.
397 (c) Whether the defect has been repaired and a description
398 of any repairs made, or, if repairs have not yet begun, the
399 anticipated date that the repairs will begin.
400 (2) If repairs relating to the defect are completed after
401 the claimant notifies the mortgagee or assignee as required
402 under subsection (1), the claimant must update the notice within
403 30 days after completion of the repairs.
404 Section 6. This act shall take effect July 1, 2020.
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COMMERCE COMMITTEE
HB 295 by Rep. Santiago
Construction Defects
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Santiago (Strike-all amendment):
The strike-all amendment:
• Provides that a person has a cause of action for a violation of the building code if the
violation is a "material" violation, instead of current law, which provides that a person has
a cause of action for any violation of the building code.
• Defines "material violation" as a violation, which may reasonably result, or has resulted,
in physical harm to a person or significant damage to the performance of a building.
• Provides that a person must attempt to resolve a claim for construction defect or a claim
for a violation of the building code through applicable warranties before filing a notice of
claim of construction defect or a cause of action.
The strike-all amendment removes the following from the bill:
• Real estate disclosure requirements relating to construction defect claims for sellers of
real property, real estate agents, and brokers.
• Information required to be in the notice of claim of construction defect.
• Requirement that a claimant affirm personal knowledge of the alleged defect, and make
certain disclosures under penalty of perjury.
• Provisions relating to the use of a special verdict form for all construction defect
litigation.
• Provisions requiring that a claimant provide notice of a construction defect settlement or
judgment to a mortgagee or assignee under specified circumstances.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 295 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Santiago offered the following:
3
4 .Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Section 553.84, Florida Statutes, is amended to
7 read:
8 553.84 Statutory civil action.-
9 (1) For purposes of this section, the term "material
10 violation" means a violation that exists within a completed
11 building, structure, or facility which may reasonably result, or
12 has resulted, in physical harm to a person or significant damage
13 to the performance of a building or its systems.
14 J.1.l Notwithstanding any other remedies available, any
15 person or party, in an individual capacity or on behalf of a
16 class of persons or parties, damaged as a result of a material
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 295 (2020)
Amendment No. 1
17 violation of this part or the Florida Building Code, has a cause
18 of action in any court of competent jurisdiction against the
19 person or party who committed the violation; however, if the
20 person or party obtains the required building permits and any
21 local government or public agency with authority to enforce the
22 Florida Building Code approves the plans, if the construction
23 project passes all required inspections under the code, and if
24 there is no personal injury or damage to property other than the
25 property that is the subject of the permits, plans, and
26 inspections, this section does not apply unless the person or
27 party knew or should have known that the violation existed.
28 (3) A notice of claim or civil action may not be served
29 under this section unless the claimant has first properly
30 submitted a claim for the alleged construction defect under any
31 applicable warranty, and the warranty provider has denied the
32 claim or has not offered a remedy satisfactory to the claimant
33 within the time limits provided in the warranty.
34 Section 2. Paragraphs (b), (c), and (d) of subsection (1)
35 of section 558. 004 are relettered as paragraphs (c), (d), and
36 (e), and a new paragraph (b) is added to that paragraph, to
37 read:
38 558.004 Notice and opportunity to repair.-
39 ( 1) (a) In actions brought alleging a construction defect,
40 the claimant shall, at least 60 days before filing any action,
41 or at least 120 days before filing an action involving an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 295 (2020)
Amendment No. 1
42 association representing more than 20 parcels, serve written
43 notice of claim on the contractor, subcontractor, supplier, or
44 design professional, as applicable, which notice shall refer to
45 this chapter. If the construction defect claim arises from work
46 performed under a contract, the written notice of claim must be
47 served on the person with whom the claimant contracted.
48 (b) A notice of claim may not be served under this chapter
49 unless the claimant has first properly submitted a claim for the
50 alleged construction defect under any applicable warranty, and
51 the warranty provider has denied the claim or has not offered a
52 remedy satisfactory to the claimant within the time limits
53 provided in the warranty.
54 Section 3. This act shall take effect July 1, 2020.
55
56
57 T I T L E A ME N D ME N T
58 Remove everything before the enacting clause and insert:
59 An act relating to construction defects; amending s. 553.84,
60 F.S.; defining the term "material violation"; revising when a
61 person has a cause of action for a violation relating to the
62 Florida Building Code; providing requirements for such cause of
63 action; amending s. 558.004, F.S.; requiring a claimant to
64 submit a construction defect claim to the warranty provider
65 before serving a notice of claim; providing an effective date.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 537 Home-Based Businesses
SPONSOR(S): Business & Professions Subcommittee, Donalds and others
TIED BILLS: IDEN./SIM. BILLS: SB 778
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 7 Y, 3 N, As CS Wright Anstead
2) State Affairs Committee 13 Y, 7 N Moehrle Williamson
3) Commerce Committee WrightlLJ.O Hamon
SUMMARY ANALYSIS
The Florida Constitution grants local governments broad home rule authority, and county and municipal
governments may exercise those powers of self-government that are provided by general or special law. As
such, general law and home rule authority determines whether local governments are able to regulate
businesses, and to what degree. Currently, some local governments have ordinances specific to regulating
home-based businesses, or businesses which operate out of a residence. Some local governments regulate
the types of businesses that may be carried on at a residence and others regulate the space in which business
may occur.
The bill provides that local governments may not enact or enforce any ordinance, regulation, or policy, or take
any action to license or otherwise regulate a home-based business in a manner that is different from other
businesses in a local government's jurisdiction.
In order to be considered a home-based business, the bill requires that:
• the business operates, in whole or in part, from a residential property;
• the employees of the home-based business reside in the residence, except for up to two employees
that do not reside at the residence. However, employees of the home-based business that do not
primarily work at the residential dwelling are not required to reside in the dwelling;
• parking for the business activities of the home-based business complies with local zoning requirements;
• the use of the residential property is consistent with the uses of the residential areas that surround the
property, but incidental and short term business uses and activities are permitted; and
• the activities of the home-based business are secondary to the property's use as a residential dwelling.
The bill provides that home-based businesses will only be subject to applicable business taxes in the county
and municipality where the home-based business is located.
The bill allows a party to challenge any local government action regulating home-based businesses. The
prevailing party is entitled to recover reasonable attorney fees and costs.
The bill has an indeterminate fiscal impact on local governments and does not appear to have a fiscal impact
on the state.
The bill has an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Local Government Authority
The Florida Constitution grants authority for broad home rule by local governments. Non-charter county
governments may exercise those powers of self-government that are provided by general or special
law. 1 Those counties operating under a county charter have all powers of self-government not
inconsistent with general law or special law approved by vote of the electors. 2
Likewise, municipalities 3 have those governmental, corporate, and proprietary powers that enable them
to conduct municipal government, perform functions, provide services, and exercise any power for
municipal purposes, except as otherwise provided by law. 4
Local Business Tax
The local business tax authorized in ch. 205, F.S., represents the fees charged and the method by
which a local government authority grants the privilege of engaging in or managing any business,
profession, or occupation within its jurisdiction. 5 Counties and municipalities may levy a business tax. 6
Revenue Sources Based on Home Rule Authority
Pursuant to home rule authority, local governments may impose proprietary fees, regulatory fees, and
special assessments to pay the cost of providing a facility or service or regulating an activity. A
regulatory fee should not exceed the regulated activity's cost and is generally required to be applied
solely to the regulated activity's cost for which the fee is imposed. 7
Businesses and Occupations
General law determines whether local governments are able to regulate occupations and businesses,
and to what degree. 8 If state law preempts regulation for an occupation, then, generally, local
governments may not regulate that occupation. 9 For example, Florida law currently preempts local
regulation with regard to the following:
• assessing local fees associated with providing proof of licensure as a contractor, or providing,
recording, or filing evidence of workers' compensation insurance coverage by a contractor; 10
• assessing local fees and rules regarding low-voltage alarm system projects; 11
• tobacco and nicotine products; 12
1
Art. VIII, s. 1(f), Fla. Const.
2 Art. VIII, s.1(g), Fla. Const.
3 A municipality is a local government entity created to perform functions and provide services for the particular benefit of the population
within the municipality, in addition to those provided by the county. The term "municipality" may be used interchangeably with the terms
"town," "city," and "village."
4
Art. VIII, s. 2(b), Fla. Const. See also s. 166.021 (1), F.S.
5
S. 205.022(5), F.S.
6
Ss. 205.033 and 205.043, F.S.
7 EDR, supra note 12, at 9.
8
Art. VIII, s. 1(f), Fla. Const.; Art. VII, s. 9(a), Fla. Const.; Art. VIII, s. 2(b), Fla. Const.; s. 166.021(1), F.S.
9
Id.; Wolf and Bolinger, supra note 17.
10
S. 553.80(7)(a)5.c., F.S.
11
S. 489.503(14), F.S.
12 Ch. 569, F.S., ands. 386.209, F.S.
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• firearms, weapons, and ammunition; 13
• employment benefits; 14
• polystyrene products; 15
• public lodging establishments and public food service establishments; 16 and
• disposable plastic bags. 17
Conversely, Florida law also specifically grants local jurisdictions the right to regulate businesses,
occupations and professions in certain circumstances. 18 For example, Florida law specifically
authorizes regulations relating to:
• zoning and land use; 19
• the levy of "reasonable business, professional, and occupational regulatory fees, commensurate
with the cost of the regulatory activity, including consumer protection, on such classes of
businesses, professions, and occupations, the regulation of which has not been preempted by
the state or a county pursuant to a county charter"; 20
• the levy of local business taxes; 21
• building code inspection fees; 22
• tattoo establishments; 23
• massage practices; 24
• child care facilities; 25
• taxis and other vehicles for hire; 26 and
• waste and sewage collection. 27
Home-based Business Regulations
Currently, some local governments have ordinances specific to regulating home-based businesses, or
businesses which operate out of a residence. Some local governments regulate the types of
businesses that may be carried on at a residence and others regulate the space in which business may
occur. Examples include:
• In Volusia County, home-based businesses are required to occupy no more than 25 percent of
the habitable floor area of the residence, 28
• In Tampa, home-based businesses may not be conducted in any accessory building; 29
• In Naples, home-based businesses are not allowed to conduct retail, wholesale, or warehousing
activities at the residence; 30 and
• In Gainesville, a home-based business may not have more than one automobile used for the
home-based business parked on the premises within view of surrounding properties. Such
automobile may not have more than two signs, not exceeding two square feet in area, each
mounted flat against or painted along the sides. 31
13
S. 790.33(1), F.S.
14
S. 218.077, F.S.
15
S. 500.90, F.S.
16 S. 509.032, F.S.
17 S. 403.7033, F.S.
18
Supra note 16.
19
S. 125.01 (1 )(h), F.S.
20 S. 166.221, F.S.
21
Ch. 205, F.S.
22 S. 166.222, F.S.
23 S. 381.00791, F.S.
24
S. 480.052, F.S.
25 S. 402.306, F.S.
26 S. 125.01 (1 )(n), F .S.
27 S. 125.01(1)(k), F.S.
28 Volusia County, FL., Ch. 72, art. II, div. 8, s. 72-283.
29 Tampa, FL., Ch. 27, art. VI, div. 2, s. 27-282.5.
30 Naples, FL., Ch. 56, art. Ill, s. 56-92.
31
Gainesville, FL., Ch. 30, art. V, div. 2, s. 30-5.37.
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Effect of the Bill
The bill provides that local governments may not:
• prohibit, restrict, regulate, or license home-based businesses in a manner that is different from
other businesses in a local government's jurisdiction; or
• enact or enforce any ordinance, regulation, or policy, or take any action to license or otherwise
regulate a home-based business in violation of the provisions in the bill.
In order to be considered a home-based business, the bill requires that:
• the business operates, in whole or in part, from a residential property;
• the employees of the home-based business reside in the residence, except that up to two
employees that do not reside at the residence may work at the residence. However, other
employees of the home-based business that do not primarily work at the residence are not
required to reside in the residence;
• parking related to the business activities of the home-based business complies with local zoning
requirements;
• as viewed from the street, the use of the residential property is consistent with the uses of the
residential areas that surround the property. However, incidental and short term business uses
may be conducted at the residence; and
• the activities of the home-based business are secondary to the property's use as a residential
dwelling.
The bill allows a home-based business that operates from a residential property to operate in an area
zoned for residential use.
Home-based businesses will only be subject to applicable business taxes in the county and
municipality where the home-based business is located.
The bill allows a party to challenge any local government action regulating home-based businesses.
The prevailing party is entitled to recover reasonable attorney fees and costs incurred in challenging or
defending the action, including reasonable appellate attorney fees and costs.
The bill provides an effective date of July 1, 2020.
B. SECTION DIRECTORY:
Section 1 Creates s. 559.955, F.S., relating to requirements for home-based businesses.
Section 2 Provides an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
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Indeterminate. The bill provides that home-based businesses will only be subject to applicable
business taxes in the county and municipality where the home-based business is located.
2. Expenditures:
Indeterminate. The bill allows a party to challenge any local government action regulating home-
based businesses. The prevailing party is entitled to recover reasonable attorney fees and costs
incurred in challenging or defending the action, including reasonable appellate attorney fees and
costs.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may allow more home-based businesses to operate more freely and efficiently.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, s. 18 of the Florida Constitution may apply
because this bill prohibits local governments, except the county and municipality where the home-
based business is located, from collecting business taxes from home-based businesses. However,
an exemption may apply given that laws having an insignificant fiscal impact are exempt from the
requirements of Art. VII, s. 18 of the Florida Constitution.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither requires nor provides authority for agency rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill allows a "party" to bring a claim against a local government for certain actions against home-
based businesses. It would be more precise to replace "party" with "home-based business," or
"substantially affected person."
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On February 4, 2020, the Business & Professions Subcommittee adopted a proposed committee
substitute (PCS) and reported the bill favorably as a committee substitute. The PCS removed the following
provisions from the bill:
• The total state preemption on the regulation and licensing of home-based businesses;
• Requirements relating to the Florida Building Code, traffic, noise, waste, and recycling; and
• Legislative findings.
The PCS added the following provisions to the bill:
• Authority to bring a legal challenge against any local government action related to home-based
businesses, including attorney fees and costs for the prevailing party;
• A prohibition on local governments from regulating home-based businesses differently than other
businesses;
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• Clarification that home-based businesses are only subject to applicable business taxes where the
home-based business is located; and
• Clarification that home-based businesses may have employees, which do not primarily work or
reside at the residence.
This analysis is drafted to the committee substitute as approved by the Business & Professions
Subcommittee.
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FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 537 2020
1 A bill to be entitled
2 An act relating to home-based businesses; creating s.
3 559.955, F.S.; specifying conditions under which a
4 business is considered a home-based business;
5 authorizing a home-based business to operate in a
6 residential zone under certain circumstances;
7 prohibiting a local government from certain actions
8 relating to the licensure and regulation of home-based
9 businesses; providing an effective date.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Section 559.955, Florida Statutes, is created
14 to read:
15 559.955 Home-based businesses; local government
16 restrictions.-
17 (1) For purposes of this section, a business is considered
18 a home-based business if it operates, in whole or in part, from
19 a residential property and meets the following criteria:
20 (a) The employees of the home-based business who work at
21 the residential dwelling also reside in the residential
22 dwelling, except that up to two employees who do not reside at
23 the residential dwelling may work at the residential dwelling.
24 However, other employees of the home-based business who do not
25 primarily work at the residential dwelling are not required to
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26 reside in the dwelling.
27 (b) Parking related to the business activities of the
28 home-based business complies with local zoning requirements.
29 (c) As viewed from the street, the use of the residential
30 property is consistent with the uses of the residential areas
31 that surround the property. However, incidental and short-term
32 business uses and activities may be conducted at the residential
33 property.
34 (d) The activities of the home-based business are
35 secondary to the property's use as a residential dwelling.
36 (2) A home-based business that operates from a residential
37 property as provided in subsection (1):
38 (a) May operate in an area zoned for residential use.
39 (b) May not be prohibited, restricted, regulated, or
40 licensed in a manner that is different from other businesses in
41 a local government's jurisdiction.
42 (c) Shall only be subject to applicable business taxes
43 under chapter 205 in the county and municipality in which the
44 home-based business is located.
45 ( 3) Local governments may not enact or enforce any
46 ordinance, regulation, or policy, or take any action to license
47 or otherwise regulate a home-based business in violation of this
48 section.
49 (4) A party may challenge any local government action in
50 violation of this section. The prevailing party in a challenge
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CODING: Words stricken are deletions; words underlined are additions.
hb0537-01-c1
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 537 2020
51 is entitled to recover reasonable attorney fees and costs
52 incurred in challenging or defending the action, including
53 reasonable appellate attorney fees and costs.
54 Section 2. This act shall take effect July 1, 2020.
Page 3 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb0537-01-c1
COMMERCE COMMITTEE
HB 537 by Rep. Donalds
Home-based Businesses
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Donalds (Line 49):
The amendment clarifies that any adversely affected current or prospective home-based
business owner may bring a challenge to a local government action which improperly restricts
home-based businesses.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 537 ( 2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Donalds offered the following:
3
4 Amendment
5 Remove line 49 and insert:
6 (4) Any adversely affected current or prospective home-based
7 business owner may challenge any local government action in
547895 - h537-line49.docx
Published On: 2/26/2020 3:06:27 PM
Page 1 of 1
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 623 Community Associations
SPONSOR(S): Civil Justice Subcommittee, Business & Professions Subcommittee, Shoaf
TIED BILLS: IDEN./SIM. BILLS: SB 1154
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 13 Y, 0 N, As Brackett Anstead
cs
2) Civil Justice Subcommittee 14 Y, 0 N, As Mawn Luczynski
cs
3) Commerce Committee Brackett / Hamon
SUMMARY ANALYSIS
The Division of Florida Condominiums, Timeshares, and Mobile Homes, within the Department of Business
and Professional Regulation, broadly regulates condominium and cooperative associations and has limited
regulatory authority over homeowner's associations (HOA).
The bill:
• Exempts a pool within an HOA with 32 parcels or less from public pool regulation.
• Requires associations to maintain bids for work or materials for one year, instead of seven.
• Requires an HOA to maintain ballots and all records relating to elections in the HOA's official records.
• Prohibits associations from requiring owners to state a reason for requesting to inspect official records.
• Provides that a condominium association required to make association documents available on a
website may instead make them available on a mobile application.
• Allows an HOA to give notice of a meeting on a website.
• Provides that condominium board term limits do not apply retroactively to service prior to 2018.
• Prohibits condominium owners' insurance policies from providing rights of subrogation against the
association under certain circumstances.
• Allows condominiums to charge a buyer or renter the actual cost of a background check.
• Provides that certain notice requirements apply to all unit owner meetings, not just the annual meetings.
• Amends the due date for paying a fine levied by an association.
• Provides that an interest in a cooperative unit is an interest in real property, not in personal property.
• Deletes the provision prohibiting a condominium association from contracting with a company in which
a board member has a financial interest.
• Allows the office of the Condominium Ombudsman to be located outside of Leon County.
• Permits a unit owner in a condominium to install, at the owner's expense, a natural gas fuel station
within the boundaries of the owner's limited common element or exclusive parking area.
• Allows mediation of specified condominium disputes in lieu of non-binding arbitration, except for
election and recall disputes, which must be arbitrated or litigated in court.
• Restates that any provision in a community association's declaration, bylaws, or rules that violates any
right under the 14th Amendment of the U.S. Constitution or article I, section 2 of the Florida Constitution
is unenforceable, and no action is required by an association to remove or amend such provisions.
• Provides that a community association may record a notice in the county in which it is located indicating
that it does not intend to enforce any regulation in its declaration, bylaws, or rules that infringes upon
the 14th Amendment of the U.S. Constitution or article I, section 2 of the Florida Constitution.
The bill is not expected to have a fiscal impact on local government. The bill may have a fiscal impact on state
government. See Fiscal Comments.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Community Associations
The Florida Division of Condominiums, Timeshares and Mobile Homes (Division), within the
Department of Business and Professional Regulation (DBPR), provides consumer protection for Florida
residents living in regulated communities through education, complaint resolution, mediation and
arbitration, and developer disclosure. The Division has regulatory authority over:
• Condominium Associations;
• Cooperative Associations;
• Florida Mobile Home Parks and related associations;
• Vacation Units and Timeshares;
• Yacht and Ship Brokers and related business entities; and
• Homeowners' Associations (limited to arbitration of election and recall disputes).
Condominiums
A condominium is a form of real property ownership created pursuant to ch. 718, F.S., comprised of
units which may be owned by one or more persons along with an undivided right of access to common
elements. 1 A condominium is created by recording a declaration of condominium in the public records
of the county where the condominium is located. 2 A declaration governs the relationships among
condominium unit owners and the condominium association. All unit owners are members of the
condominium association, an entity responsible for common elements operation and maintenance. The
condominium association is overseen by an elected board of directors, commonly referred to as a
"board of administration." The board enacts bylaws which govern the administration of the association.
Cooperatives
A cooperative is a form of property ownership created pursuant to ch. 719, F.S. The real property is
owned by the cooperative association, and individual units are leased to the residents who own shares
in the cooperative association. 3 The lease payment amount is the pro-rata share of the cooperative's
operational expenses. Cooperatives operate similarly to condominiums and the laws regulating
cooperatives are in many instances nearly identical to those regulating condominiums.
Homeowners' Associations
A homeowners' association (HOA) is an association of residential property owners in which voting
membership is made up of parcel owners, membership is a mandatory condition of parcel ownership,
and which is authorized to impose assessments that, if unpaid, may become a lien on the parcel. 4 Only
HOAs whose covenants and restrictions include mandatory assessments are regulated by ch. 720, F.S.
Like a condominium or cooperative, an HOA is administered by an elected board of directors. The
powers and duties of an HOA include the powers and duties provided in ch. 720, F.S., and in the
association's governing documents, which include the recorded covenants and restrictions, together
with the bylaws, articles of incorporation, and duly adopted amendments to those documents. Florida
law sets procedures and minimum requirements for HOA operation and provides for a mandatory
binding arbitration program, administered by the Division, for certain election and recall disputes, but no
state agency has direct oversight of HOAs.
1
S. 718.103(11), F.S.
2
S. 718.104(2), F.S.
3
S. 719.103(2)(26), F .S.
4
S. 720.301(9), F.S.
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Cooperatives as Personal and Real Property Interest
Current Situation
The building and land of a cooperative association are owned by a corporation, not the individual unit
owners. A person who purchases a cooperative unit does not receive title to the unit or any portion of
the cooperative's building or land. Instead, the purchaser receives shares of the cooperative
association and leases a unit from the association. An interest in a corporation or cooperative is
represented by the ownership of stock in the corporation.
An ownership interest in a corporation or cooperative is an interest in personal property, not real
property. 5 Generally, personal property is any object or right that is not real property, such as
automobiles, clothing, or stocks. 6
Real property is anything that is permanent, fixed, and immovable, such as land or a building. At
common law, a leasehold, even for as long as 99 years, was not considered an interest in real property.
However, a long-term leasehold interest is taxed in the same manner as a fee interest, so courts
generally regard long-term leaseholds to be an interest in real property for taxation purposes. 7
In Florida, a cooperative is treated as real property for some homestead purposes. Even though the
legal definition of homestead follows the common law and requires an interest in real property to qualify
for the homestead exemption, the Florida Constitution specifically extends the exemption to a
cooperative unit. 8 Florida's homestead laws govern the cooperative for purposes of exemption from
forced sale by creditors 9 and for purposes of the ad valorem taxation exemption. However, a
cooperative is not subject to Florida's homestead protections and is not considered real property for
purposes of devise and descent. Devise and descent is the transfer or conveyance of property by will or
inheritance. 10
In contrast, the Condominium Act specifically provides that "[a] condominium parcel created by the
declaration is a separate parcel of real property, even though the condominium is created on a
leasehold." Thus, an ownership interest in a condominium is expressly converted by statute into an
interest in real property. There is no corresponding statute in the Cooperative Act. 11 Florida courts have
recognized that there is some confusion in this area and that there is a need for clarification on whether
a cooperative ownership interest is an interest in real property or personal property. 12
Effect of the Bill
The bill provides that an interest in a cooperative unit is an interest in real property for all purposes
including devise and descent.
5 Downey v. Surf Club Apartments, Inc., 667 So.2d 414 (Fla. 1st DCA 1996).
6 Am. Jur. 2d Property§ 18.
7 Williams v. Jones, 326 So.2d 425, 433 (Fla. 1975); See generally The Florida Bar, Practice Under Florida Probate Code Chapter 19
(9th ed. 2017).
8 Art. VII, s. 6(a), Fla. Const. ("The real estate may be held by legal or equitable title, by the entireties, jointly, in common, as a
condominium, or indirectly by stock ownership or membership representing the owner's or member's proprietary interest in a
corporation owning a fee or a leasehold initially in excess of ninety-eight years.").
9
Ss. 222.01and 222.05, F.S.
10 Southern Waifs, Inc. v. Stilwell Corp., 810 So. 2d 566, 572 (Fla. 2nd DCA 2002); Phillips v. Hirshon, 958 So. 2d 425,430 (Fla. 3rd
DCA 2007); In re Estate of Wartels, 357 So.2d 708 (Fla. 1978); Black's Law Dictionary (11th ed. 2019).
11 S. 718.106(1), F.S; Seegeneralfych. 719, F.S.
12 Phillips, 958 So.2d 425; Levine v. Hirshon, 980 So.2d 1053 (Fla. 2008).
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Official Records
Current Situation
Condominiums, cooperatives, and HOAs are required to maintain official records for at least seven
years. The official records must include:
• A copy of the articles of incorporation, declaration, bylaws, and rules of the association;
• Meeting minutes;
• A roster of all owners or members, including the electronic mailing addresses and fax numbers
of unit owners consenting to receive notice by electronic transmission;
• A copy of any contracts to which the association is a party or under which the association or the
unit owners or members have an obligation;
• The association's accounting records;
• All contracts for work to be performed, including bids for work, materials, and equipment.
Cooperatives and HOAs are only required to maintain bids for one year;
• A copy of the plans, permits, warranties, and other items provided by the developer; and
• All other written records which are related to the association's operation. 13
The official records for condominiums and cooperatives, but not HOAs, must also include all ballots,
sign-in sheets, voting proxies, and all other papers relating to voting by unit owners. 14
Owners may request to inspect an association's official records, and the association must make the
records available for inspection within ten business days of receiving an inspection request. 15 A
condominium and cooperative may adopt reasonable rules regarding the frequency, time, location,
notice, and manner of record inspections. An HOA may also adopt reasonable rules regarding the
frequency, time, location, notice, and manner of record inspections, but an HOA may not require an
owner to state the reason for the inspection. 16
Effect of the Bill
The bill:
• Provides that all records relating to an HOA are official records;
• Mirrors condominium law to cooperative and HOA law by requiring that condominiums maintain
bids for work, materials, and equipment for one year instead of seven years;
• Mirrors condominium and cooperative law to HOA law by prohibiting a condominium or
cooperative from requiring a unit owner to state a reason for official records inspection; and
• Mirrors HOA law to condominium and cooperative law by including all ballots, sign-in sheets,
voting proxies, and all other papers relating to voting in the HOA's official records.
Condominium Unit Owner Insurance and Subrogation
Current Situation
A condominium association must use its best efforts to maintain insurance for the association, the
association property, and the common elements. If a condominium maintains insurance for the
association, it must have coverage for the condominium property as originally installed and all
alterations or additions made to the condominium property. 17
13
Ss. 718.111(12)(a), 719.104(2), and 720.303(4)-(5), F.S.
14 Jd.
15 Jd.
16 S. 720.303(5), F.S.
17 S. 718.111, F.S.
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Condominium association insurance coverage does not include personal property within a unit or a
unit's limited common elements, floor, walls, ceiling coverings, electrical fixtures, appliances, water
heaters, water filters, built-in cabinets and countertops, and window treatments. Insurance coverage for
such property is the responsibility of the unit owner. 18
Subrogation is "the substitution of one party for another whose debt the party pays, entitling the paying
party to rights, remedies, or securities that would otherwise belong to the debtor." 19 In the condominium
setting, subrogation allows a unit owner's insurer to stand in the place of the unit owner whose unit has
been damaged by a negligent party. The unit owner's insurer pays the unit owner for the damage and
stands in the place of the unit owner to seek relief from the party that caused the damage, which may
be the condominium association.
Often, a condominium association's declaration may contain a clause requiring a unit owner's
insurance policy to prohibit subrogation against the condominium association. 20
Prior to 2010, Florida law prohibited a condominium unit owner's insurance policy from providing rights
of subrogation against the association. That statutory prohibition was repealed in 2010, and
subrogation against a condominium association has been permitted since that time. 21
Effect of the Bill
The bill provides that if a condominium association's insurance policy does not provide rights of
subrogation against the unit owners, then a unit owner's insurance policy may not provide rights of
subrogation against the association.
Condominium Websites
Current Situation
Condominium associations with 150 or more units that do not manage timeshare units must post
certain documents to a website accessible only to unit owners and condominium association
employees. The condominium association's website must include:
• The recorded declaration of condominium of each condominium operated by the condominium
association and each amendment to each declaration;
• The recorded condominium association bylaws and each amendment to the bylaws;
• The condominium association's articles of incorporation, or other documents creating the
condominium association, and each amendment thereto. The copy posted must be a copy of
the articles of incorporation filed with the Department of State;
• The condominium association rules;
• Any management agreement, lease, or other contract to which the condominium association is
a party or under which the condominium association or the unit owners have an obligation or
responsibility;
• Summaries or complete copies of bids for materials, equipment, or services, which must be
maintained on the website for one year;
• The annual budget and any proposed budget to be considered at the annual meeting;
• The financial report and any proposed financial report to be considered at a meeting;
• Each director's certification;
• All contracts or transactions between the condominium association and any director,
corporation, firm, or condominium association that is not an affiliated condominium association
18 /d.
19
Aurora Loan Services LLC v. Senchuk, 36 So. 3d 716, 717 (Fla. 151 DCA 2010).
20 Gary L. Wickert & Kelsey Burazin, Subrogating Condominium Damage, Claims Journal June 4, 2015,
https://www.claimsjournal.com/news/national/2015/06/04/263728.htm (last visited Jan. 23, 2020).
21
S. 718.111 (11), F.S. (2009); See also Senate Analysis of 2010 Senate Bill 1196 & 1222 (April 9, 2010).
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or any other entity in which a condominium association director is also a director or officer and
financially interested;
• Any contract or document regarding the conflict of interest or possible conflict of interest of a
community association manager or a board member;
• The notice of any unit owner meeting and the meeting's agenda, posted at least 14 days before
the meeting. The notice must be posted in plain view on the front page of the website or on a
separate subpage of the website labeled "Notices" which is conspicuously visible and linked on
the front page; and
• Any documents to be considered during a meeting or listed on the meeting's agenda, which
must be posted at least seven days before the meeting where the document will be
considered. 22
Effect of the Bill
The bill allows a condominium association to post the required documents on a mobile application
downloadable to a mobile device or to a website.
Condominium Term Limits
Current Situation
Condominium association board members serve one-year terms, but a board member may serve a
two-year term if allowed by the association's bylaws or articles of incorporation. 23
In 2017, the Legislature passed a law prohibiting a condominium association board member from
serving more than four consecutive two-year terms unless two-thirds of the total voting interests
approve his or her continued service or there are not enough eligible candidates to fill board
vacancies. 24
In 2018, the Legislature amended the term limit provision for condominium board members to clarify
that a board member could not serve more than eight consecutive years instead of four consecutive
two-year terms. 25 Questions from the public remain about whether time served on a board prior to the
enactment of the term limit provision counts toward the eight-year maximum. 26
Effect of the Bill
The bill provides that only board service occurring after July 1, 2018, counts towards a board member's
eight-year maximum.
Condominium Transfer Costs
Current Situation
A condominium association may not charge a potential buyer or renter costs or fees in connection with
the sale, lease, sublease, or other transfer of a unit unless:
• The fee is limited to $100 or less;
• The fee is provided for in the association's governing documents; and
22
S. 718.111 (12)(g), F .S.
23 S. 718.112(2)(d), F.S.
24 See House Analysis of 2017 House Bill 1237 (July 5, 2017).
25 See House Analysis of 2018 House Bill 841 (Mar. 27, 2018).
26 David G. Muller, Is new term limit restriction retroactive, Naples Daily News (Sept. 15, 2018)
https://www.naplesnews.com/story/money/real-estate/2018/09/15/new-term-limit-restriction-retroactive/1259991002/ (last visited Jan.
23, 2020).
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• The association approves the sale, lease, sublease, or transfer. 27
A condominium association may require a potential renter to provide the association a security deposit
equivalent to one month of rent. The association must place the security deposit in an escrow account
maintained by the association. 28
Effect of the Bill
The bill provides that, in addition to a $100 administrative fee, a condominium association may charge
a potential buyer or renter the actual cost to perform any background check or screening required in
connection with the sale, mortgage, lease, sublease, or other transfer of a unit.
Condominium Service Providers Conflicts of Interest
Current Situation
Prior to 2017, a condominium association could sign a contract for maintenance or management
services with an entity in which a member of the association's board of directors had a financial
interest. The contract had to disclose the board member's financial interest, and a discussion of the
financial interest had to be in the minutes of the meeting at which the vote to authorize the contract was
held. Any contract that failed to disclose such interest was unenforceable. 29 The contract also had to be
affirmed by a two-thirds vote of the members of the board of directors present. The board member with
a financial interest in the entity could not participate in the vote. 30
In 2017, the Legislature passed a law prohibiting a condominium association from employing or
contracting with any service provider in which a board member, or a relative of a board member within
the third degree of consanguinity by blood or marriage, has a financial interest. This restriction does not
apply if the board member or relative owns less than one percent of the equity shares of the service
provider or to timeshare condominiums. 31
Effect of the Bill
The bill repeals the provision prohibiting a condominium association from employing or contracting with
any service provider in which a board member or a relative of a board member has a financial
relationship. However, the bill maintains the provision requiring a board member's financial interest be
disclosed in the contract with the association and in the minutes of the meeting at which the board
votes on the contract. Any contract that fails to disclose such interest is unenforceable. The contract
also requires an affirmative vote of two-thirds of the board of directors present and prohibits a board
member with a financial interest from participating in the vote. This restores the law applicable to board
member conflicts of interest to its pre-2017 state.
Condominium Electric Vehicle Charging and Natural Gas Fuel Stations
Condominium Electric Vehicle Charging Stations - Current Situation
In 2018, the Legislature passed a law prohibiting a condominium association from preventing a unit
owner from installing an electric vehicle charging station within the boundaries of the unit owner's
limited common element parking area. The electricity charges for the station must be separately
metered by the unit owner. 32
7
2 S. 718.112(2)(i), F.S.
28 /d.
29 S. 718.3026(3), F.S.
30 Id.
31 See House Analysis, supra note 24.
32 See House Analysis, supra note 25.
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The installation may not cause irreparable damage to the condominium property, and the association
may require the unit owner to: 33
• Comply with bona fide safety requirements, consistent with applicable building code or
recognized safety standards;
• Comply with reasonable architectural standards adopted by the association so long as such
standards do not prohibit the installation of such station or substantially increase the cost;
• Engage the services of a duly licensed and registered electrical contractor or engineer familiar
with the installation and core requirements of an electric vehicle charging station;
• Provide a certificate of insurance naming the association as an additional insured on the
owner's insurance policy; and
• Reimburse the association for the actual cost of any increased insurance premium amount
attributable to the electric vehicle charging station.
The costs of installation, operation, maintenance, repair, and removal are the responsibility of the unit
owner or the owner's successor and the association may use their assessment powers to enforce the
payment of such costs. 34
The association must grant an implied easement across the common elements to the unit owner for the
installation of the electric vehicle charging station and any necessary equipment for the furnishing of
electrical power to the electric vehicle charging station. 35
Natural Gas Fuel - Current Situation
Natural gas fuel is any liquefied petroleum gas product, compressed natural gas product, or
combination thereof used in a motor vehicle. 36 The term includes all forms of fuel commonly or
commercial known or sold as natural gasoline, butane gas, propane gas, or any other form of liquefied
petroleum gas, compressed natural gas, or liquefied natural gas. 37 However, the term does not include
natural gas or liquefied petroleum placed in a separate tank of a motor vehicle for cooking, heating,
water heating, or electric generation. 38
Condominium Electric Vehicle Charging and Natural Gas Fuel Stations - Effect of the Bill
The bill provides that a condominium is prohibited from preventing a unit owner from installing a natural
gas fuel station or electric vehicle charging station within the boundaries of the unit owner's limited
common element or exclusively designated parking area.
The bill gives "natural gas fuel" the same meaning ass. 206.9951, F.S., and defines natural gas fuel
vehicle to mean a motor vehicle powered by natural gas fuel.
A unit owner installing a natural gas fuel station is subject to the same requirements as an owner
installing an electric vehicle charging station. The unit owner is also responsible for the supply and
storage of the natural gas fuel.
The bill allows a unit owner to use an embedded meter to meter the electricity used by an electric
vehicle charging or natural gas fuel station or to have the station separately metered.
The bill also provides that the unit owner is responsible for complying with all federal, state, or local
laws or regulations applicable to the installation, maintenance, or removal of electric vehicle charging or
natural gas fuel stations.
33 S. 718.113(8), F.S.
34 Id.
35 Id.
36 S. 206.9951 (2), F .S.
37 Id.
3a Id.
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Alternative Dispute Resolution
Current Situation
Condominiums and Cooperatives
The Condominium and Cooperative Acts provide for an arbitration program within the Division for
certain disputes between unit owners and associations. The Division employs full time arbitrators and
certifies private attorneys for mandatory nonbinding arbitration. An arbitrator's final decision is not
binding, and any party may further pursue a matter in civil court. However, the parties may agree to be
bound by the arbitrator's decision. 39
The Condominium and Cooperative Acts require a party to petition for arbitration with the Division
before filing a complaint in civil court for the following disputes between an association and a unit
owner: 40
• Termination of an association.
• Recall of a board member.
• Disputes where the board:
o Requires an owner to take an action or refrain from any action involving the owner's unit.
o Alters or adds to a common element.
o Fails to provide proper notice for meetings or other actions.
o Fails to properly conduct elections.
o Fails to properly notice meetings.
o Fails to allow inspection of the association's records.
The Division does not have jurisdiction for arbitration for the following disputes between a unit owner
and an association:
• Disagreements regarding the interpretation or enforcement of a warranty;
• The charging of a fee or assessment;
• The eviction or other removal of a tenant from unit;
• Alleged breaches of fiduciary duty by one or more board members; and
• Claims for damages to a unit based upon the alleged failure of the association to maintain the
common elements or condominium property. 41
The cost to petition the Division for arbitration is a $50 filing fee. The petition must include the specific
nature of the dispute, demand for relief, and include proof that the petitioner provided the opposing
party a notice of intent to petition for arbitration. Upon receipt of a petition for arbitration, the Division
must determine if the dispute qualifies for arbitration. If the dispute does qualify for arbitration then the
arbitrator must conduct the arbitration within 30 days. 42 The arbitrator must render his or her decision
within 30 days of the arbitration. 43
Either party in an arbitration proceeding may petition the arbitrator to have the proceeding sent to
mediation. Upon the request for mediation, the arbitrator must contact all parties in the proceeding to
determine if mediation is agreeable. An arbitrator may refer a proceeding to mediation even if all parties
do not agree to mediation. 44
If a matter is referred to mediation, the parties must select a mutually agreeable mediator. The
arbitrator may provide a list of available mediators. Mediation is conducted in accordance with the
39 S. 718.1225, & 719.1255, F.S; DBPR Condominium Unit-Owner Rights and Responsibilities,
http://www.myfloridalicense.com/dbpr/lsc/documents/LSC4.pdf (last visited Mar. 27, 2019).
40 Id.
41 Id.
42 Id.
43 Id.
44 Id.
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Florida Rules of Civil Procedure. The parties in a mediation are required to equally share the costs of
mediation. 45
Instead of arbitration, the HOA Act provides for a presuit mediation program for certain disputes
between parcel owners and HOAs. The HOA act does not require mandatory arbitration by the Division
unless the dispute involves elections or recalls of board members.
The following disputes between parcel owners and HOAs must go to presuit mediation before a party
can file suit in civil court:
• Disputes involving the use of or changes to an owner's parcel or the common areas;
• Covenant disputes;
• Disputes regarding meetings of the board or committees of the board;
• Disputes involving the meeting of owners that do not involve elections;
• Access to the official records disputes; and
• Disputes regarding amendments to the governing documents. 46
The following disputes are not subject to presuit mediation:
• Disputes involving the collection of assessments or other financial obligations; and
• Actions to enforce a prior mediation agreement. 47
An aggrieved party initiates the mediation proceedings by serving a written petition for mediation to the
opposing party. The petition must be in the format provided in statute and must identify the specific
nature of the dispute and the basis for the alleged violations. The written offer must include five certified
mediators that the aggrieved party believes to be neutral. If emergency relief is required then a
temporary injunction may be sought in court prior to the mediation. 48
The opposing party has 20 days to respond. If the opposing party fails to respond or refuses to mediate
then the aggrieved party may proceed to civil court. If the parties agree to mediation, the mediator must
hold the mediation within 90 days of the petition being sent to the opposing parties. The parties share
the costs of mediation except for the cost of attorney's fees. Mediation is confidential and persons who
are not parties to the dispute may not attend the mediation. 49
If mediation is not successful in resolving all the issues between the parties, the parties may proceed to
civil court or may elect to enter into binding or non-binding arbitration by the Division. All parties to the
dispute must agree to enter into arbitration by the Division. 50
Effect of the Bill
The bill authorizes a party to a condominium dispute to petition for presuit mediation in accordance with
the HOA Act in lieu of arbitration prior to filing in civil court. However, the bill provides that election and
recall disputes are not eligible for mediation in lieu of arbitration. Instead, election and recall disputes
must be arbitrated by the Division or filed directly with a court of competent jurisdiction.
Condominium and HOA Fines and Suspensions
Current Situation
45 Id.
46
S. 720.311, F.S; Peter M. Dunbar & Charles F. Dudley, The Law of Florida Homeowners Associations, 77-78 (91h ed. 2013).
47 Id.
48 Id.
49 Id.
so Id.
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Condominium associations and HOAs may levy fines against or suspend the right of an owner,
occupant, or an owner or occupant's guest, to use the common elements for failing to comply with any
provision in the association's declaration, bylaws, or rules. 51
A board may not impose a fine or suspension without giving at least 14 days' written notice of the fine
or suspension and the opportunity for a hearing. The hearing must be held before a committee of unit
or parcel owners who are not board members or residing in a board member's household. The role of
the committee is to determine whether to confirm or reject the fine or suspension. 52
A fine approved by the committee must be paid to the association five days after the committee
meeting. The condominium or HOA must provide written notice of any fine or suspension by mail or
hand delivery to the unit owner and, if applicable, to any tenant, licensee, or guest of the unit owner. 53
Effect of the Bill
The bill provides that if a fine is approved by the committee, it must be paid to the association five days
after notice of the approved fine is sent to the unit or parcel owner and, if applicable, to any tenant,
licensee, or invitee of the owner, instead of five days after the meeting approving the fine.
Notice of Elections for Condominium Associations
Current Situation
Condominium Associations must mail, deliver, or electronically transmit notice of an election to unit
owners at least 60 days before the election. Condominium associations must also mail, deliver, or
electronically transmit a second notice of election to the unit owners along with a ballot listing all the
candidates. However, no exact time is currently specified for the provision of the second notice. 54
Effect of the Bill
The bill provides that the second notice must be mailed, delivered, or electronically transmitted to unit
owners not less than 14 days or more than 34 days prior to the election.
Notice of Meetings for Condominium Associations
Current Situation
A condominium association must provide written notice of the association's annual meeting. The notice
must include an agenda, and must be mailed, delivered, or electronically transmitted to each unit owner
at least 14 days before the annual meeting. The notice must also be posted in a conspicuous place on
condominium property for at least 14 continuous days before the annual meeting or repeatedly
broadcast with the agenda on a closed-circuit cable television system serving the association. 55
Effect of the Bill
The bill provides that the requirements to provide written notice to each owner and conspicuously post
such notice applies to all unit owner meetings, not just the annual meeting.
51 Ss. 718.303(3) and 720.305(2)(a), F.S.
52 Jd.
53 Jd.
54
S. 718.112(2)(d), F.S.
55 S. 718.112(d), F.S.
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The bill also provides that except for the annual meeting, the time-period that a condominium
association must serve notice of meetings to the owners and conspicuously post such notice is
determined by the association's bylaws. If the bylaws are silent, the notice must be sent to the unit
owners and conspicuously posted at least 14 days before the meeting.
Notice of Meetings for HOAs
Current Situation
HOAs must notice all board meetings by posting notice in a conspicuous place on the HOA's property
for at least 48 hours. Notice must be posted 14 days before meetings where a nonemergency special
assessment or an amendment to the rules regarding parcel use is considered. 56
HOAs are required to notice all member meetings by mailing, hand delivering, or electronically
transmitting notice before the meeting and posting the notice in a conspicuous place before the
meeting. If an HOA opts to broadcast notice in lieu of posting notice, it must do so at least four times
during every broadcast hour of each day. 57 Additionally, when notice of an HOA meeting is mailed or
delivered to an owner's address it must be sent to the address identified as the parcel owner's mailing
address on the property appraiser's website for the county in which the owner's parcel is located. 58
In 2018, the Legislature passed a law allowing condominium and cooperatives to adopt rules for
noticing all board and owner meetings on a website if the time requirements for physically posting the
board meetings are met. Any rule adopted for website notice must require the association to send an
electronic notice providing a hyperlink to the website where the notice is posted to all unit owners
whose email addresses are part of the official records in the same manner as notice for a member
meeting. Notice by website does not remove the requirement to comply with the other notice
requirements. 59
Effect of the Bill
The bill amends HOA law to mirror condominium and cooperative law by allowing HOAs to adopt rules
for noticing all board and owner meetings on a website if the time requirements for physically posting
the notices are met. Any rule adopted for website notice must include a requirement that the
association send an electronic notice providing a hyperlink to the website where the notice is posted to
all parcel owners whose email addresses are part of the official records in the same manner as notice
for a member meeting. Notice by website must be in addition to the other notice requirements.
The bill also provides that when notice of a meeting is mailed or delivered to an owner's address it must
be sent to the address identified as the parcel owner's mailing address in the HOA's official records,
instead of the address identified as the parcel's owner's mailing address on the property appraiser's
website.
Cooperative Associations Video Conferencing
Current Situation
Cooperative association board members and committee members may attend meetings by telephone.
If a board or committee member attends a meeting by telephone, a speaker must be used so the
member may be heard by the rest of the board or committee and by any unit owners in attendance. 60
56
Ss. 718.112(2), 719.106(1 ), & 720.303(2)(c), F.S.
57 Id.
58 S. 720.306(1)(9), F.S.
59
See House Analysis, supra note 25.
60
S. 719.106(l)(b), F.S.
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Effect of the Bill
The bill provides that cooperative association board members and committee members may attend
meetings by telephone, real time video conferencing, or by using a similar real-time electronic or video
communication. If a board or committee member attends a meeting by telephone, video, or electronic
or video communication, a speaker must be used so the member may be heard by the rest of the board
or committee and by any unit owners in attendance.
HOA Swimming Pools
Current Situation
The Department of Health (DOH) is responsible for the oversight and regulation of water quality and
safety of public swimming pools in Florida under ch. 514, F.S. In order to operate or continue to operate
a public swimming pool, a valid operating permit from DOH must be obtained. If DOH determines that
the public swimming pool is, or may reasonably be expected to be, operated in compliance with state
laws and rules, DOH will issue a permit. However, if it is determined that the pool is not in compliance
with state laws and rules, the application for a permit will be denied. DOH is authorized to establish a
schedule of fees for plan approval and permitting. 61 Operating permits must be renewed annually and
may be transferred from one name or owner to another. 62
DOH may, at any reasonable time, enter any and all parts of a public swimming pool to examine and
investigate the pool's sanitary and safety conditions. 63 County health departments are responsible for
the routine surveillance of water quality in all public swimming pools. 64
Pools that are used by condominiums or cooperatives with 32 units or less and which are not being
operated as public lodging establishments are exempt from DOH's public pools requirements, except
for maintaining water quality standards. 65 HOA pools are not exempt from DOH regulation even where
the HOA has 32 homes or less.
Effect of the Bill
The bill provides that pools for HOAs and other property associations that have 32 parcels or less and
are not being operated as public lodging establishments are also exempt from DOH's public pools
requirements, except for maintaining water quality standards.
Condominium Ombudsman
Current Situation
Within the Division is housed the Office of the Condominium Ombudsman (Ombudsman). The
Ombudsman is an attorney appointed by the Governor to serve as a neutral resource for unit owners
and condominium associations. The Ombudsman is authorized to prepare and issue reports and
recommendations to the Governor, the Division, and the Legislature on any matter or subject within the
jurisdiction of the Division. In addition, the Ombudsman may make recommendations to the Division for
changes in rules and procedures for the filing, investigation, and resolution of complaints. 66
61 S. 514.033, F.S.
62 Ss. 514.031(2) and (3), F.S.
63 S. 514.04, F.S.
64 S. 514.025, F.S.
65 S. 514.0115(2), F.S.
66
Ss. 718.5011 & 718.5012, F.S.
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The Ombudsman also acts as a liaison between the Division, unit owners, and condominium
associations and is responsible for developing policies and procedures to help affected parties
understand their rights and responsibilities. 67
The Ombudsman is required to keep his or her principal office in Leon County, Florida, on Division
premises or, if suitable space cannot be provided on such premises, in a place convenient to the
Division. However, the Ombudsman may establish branch offices elsewhere in the state with the
Governor's approval.
Effect of the Bill
The bill deletes the requirement that the Ombudsman keep his or her principal office in Leon County,
Florida, but maintains the requirement that the Ombudsman's office be in a place convenient to the
Division.
The Fourteenth Amendment of the U.S. Constitution and Article II of the Florida Constitution
Current Situation
Section 1 of the Fourteenth Amendment of the U.S. Constitution provides that: 68
• Every person born or naturalized in the U.S. is a citizen of the U.S. and the state where they
live;
• Every person has equal protection of the laws;
• No state may curtail the privileges or immunities of citizens; and
• No state may deprive any person of life, liberty, or property without due process.
The Fourteenth Amendment only applies to the states, not private parties. However, the United States
Supreme Court ruled that a racially restrictive private covenant in a land deed violates the Fourteenth
Amendment. The Supreme Court determined that even though a restrictive covenant is between private
parties, because a state court was the entity that had to enforce the covenant, the covenant violated the
Fourteenth Amendment. 69
According to news articles, residents in Florida and across the country have discovered old restrictions
and covenants in deeds and community association governing documents prohibiting minorities from
owning or renting property in the neighborhood. These restrictions cannot be enforced because they
violate the Fourteenth Amendment as well as the Federal Fair Housing Act and the Florida Fair
Housing Act, which applies if the property is in Florida. 70 However, these restrictions and covenants can
be difficult to remove. 71
Article I, section 2, of the Florida Constitution is similar to the Fourteenth Amendment in the U.S.
Constitution, establishing the basic rights of all natural persons in Florida and providing that all such
persons: 72
67 Id.
68 U.S. Const. amend. XIV, §1.
69 Shelley v. Kramer, 68 S.Ct. 836 (U.S. 1948).
70
The Federal Fair Housing Act and the Florida Fair Housing Act prohibit discrimination in home sales, financing, and rentals based on
race, color, sex, pregnancy, disability, nationality, religion, and familial status. See 42 U.S.C. § 3601-189; See Ch. 760, part II, F.S.
71
TaMaryn Waters, Attorney Wants outdated, racist covenant language in Betton Hills stripped, Tallahassee Democrat (July 1, 2019),
https://www.tallahassee.com/story/news/money/2019/07/01 /attorney-wants-outdated-racist-covenant-language-betton-h ills-stripped-
tallahassee/1546406001 / (last visited Jan. 23, 2020); Judy L. Thomas, 'Curse of covenant' persists - restrictive roles, while
unenforceable, have lingering legacy, The Kansas City Star (July 27, 2016),
https://www.kansascity.com/news/local/article92156112.html (last visited Jan. 23, 2020); Rachel Spacek, 'No persons other than
persons of the White race': Racist language remains in older Idaho homes' documents, Idaho Press (Nov. 5, 2019),
https://www.idahopress.com/news/local/no-persons-other-than-persons-of-the-white-race-racist/article 167d 13e 1-59ce-5f03-b 1e 1-
771709da5e4b. html (last visited Jan. 23, 2020).
72
Art. I, s. 2, Fla. Const.
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• Are equal before the law;
• Have inalienable rights, including the right to:
o Enjoy and defend life and liberty;
o Pursue happiness;
o Be rewarded for industry; and
o To acquire, possess, and protect property; and
• May not be deprived of any right because of race, religion, national origin, or physical disability.
Effect of the Bill
The bill restates that any provision in a community association's declaration, bylaws, or rules that
violates any right under the Fourteenth Amendment of the U.S. Constitution or article I, section 2 of the
Florida Constitution is void and unenforceable, and no action is required by an association to remove or
amend such provisions because they cannot be enforced.
The bill also provides that a community association may record a notice in the county in which it is
located indicating that it does not intend to enforce any regulation in its declaration, bylaws, or rules that
violates the Fourteenth Amendment of the U.S. Constitution or article I, section 2 of the Florida
Constitution. However, the bill specifies that an association's failure to record such notice may not be
the basis for liability or evidence of discrimination or an intent to discriminate.
B. SECTION DIRECTORY:
Section 1: Amends s. 514.0015, F.S., relating to exemptions from supervision or regulation; variances.
Section 2: Amends s. 627.714, F.S., relating to residential condominium unit owner coverage; loss
assessment coverage required.
Section 3: Amends s. 718.111, F.S., relating to the association.
Section 4: Amends s. 718.112, F.S, relating to bylaws.
Section 5: Amends s. 718.113, F.S., relating to maintenance; limitation upon improvement; display of
flag; hurricane shutters and protection; display of religious decorations.
Section 6: Amends s. 718.1255, F.S., relating to alternative dispute resolution; voluntary mediation,
mandatory nonbinding arbitration; legislative findings.
Section 7: Amends s. 718.303, F.S., relating to obligations of owners and occupants; remedies.
Section 8: Amends s. 718.5014, F.S., relating to ombudsman location.
Section 9: Amends s. 719.103, F.S., relating to definitions.
Section 10: Amends s. 719.104, F.S., cooperatives; access to units; records; financial reports;
assessments; purchase of leases.
Section 11: Amends s. 719.106, F.S., relating to bylaws; cooperative ownership.
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Section 12: Amends s. 720.303, F.S., relating to association powers and duties; meetings of board;
official records; budgets; financial reporting; association funds; recalls.
Section 13: Amends s. 720.305, F.S., relating to obligations of members; remedies at law or in equity;
levy of fines and suspension of use rights.
Section 14: Amends s. 720.306, F.S., relating to meetings of members; voting and election
procedures; amendments.
Section 15: Amends s. 720.3075, F.S, relating to prohibited clauses in association documents.
Section 16: Provides an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
It is unknown if prohibiting condominium owners' insurance policies from providing rights of subrogation
against the association will increase or decrease the cost of condominium unit owners' insurance
policies.
According to DBPR, "The proposal regarding presuit mediation as an option to arbitration will raise
costs to unit owners involved in a dispute with their association." 73
D. FISCAL COMMENTS:
It is unknown whether the change in classification of cooperatives from personal to real property for the
purpose of estate taxes or laws related to devise and descent will have an impact on state revenue.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
73
Florida Department of Business and Professional Regulation, Agency Analysis of2020 House Bill 623, p. 6 (February 7, 2020).
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Not applicable. The bill does not appear to effect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
According to DBPR, 74
"Benefits of current situation regarding Arbitration:
• Section 718.1255(3)(a), F.S., provides that the Legislature finds that unit owners
are frequently at a disadvantage when litigating against an association as the
association is better able to bear the costs and expenses of litigation than a unit
owner who must rely their own financial resources.
• More efficient and cost-effective option to court litigation as the filing fee is only
$50.
• Speedier than court which will have a significant delay.
• Awarding of attorney fees to the prevailing party is determined by the division.
• No cost mediation currently offered by the division.
• Since 2006, less than 1% of arbitration cases are challenged by a Trial De Novo.
• Since 2009, 88% of the cases filed with arbitration are concluded by arbitration,
with only 12% concluded by mediation.
Disadvantages and costs associated to unit owners with the proposal [provisions contained
in the bill]:
• Pursuant to s. 720.311 (2)(a), F.S., an average mediation may require three to
four hours of a mediator's time, plus preparation time.
• Private mediators typically charge $300 to $500 hundred per hour. Four hours of
mediation and two hours of preparation time at $300 per hour would result in a
$1,800 cost. The unit owner in the dispute would owe $900 in addition to the unit
owner's cost to obtain an attorney.
• Currently, only 12% of all arbitration cases are referred to mediation. Of the
12%, there is only a 37% success rate for mediation.
• Allow the parties to bypass arbitration for condominium recall and election
disputes and requiring civil court action. However, court trials of condominium
recalls and election disputes will not be completed prior to next annual election.
• Comparing a condominium association to a homeowners' association as
disputes in each are currently handled differently.
• The proposal appears to contradict the legislative findings in s. 718.1255(3)(a),
F.S."
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On December 11, 2019, the Business & Professions Subcommittee adopted a strike-all amendment and
reported the bill favorably as a committee substitute. The committee substitute:
• Corrects a scrivener's error by correcting a reference to the Florida Constitution, from article II, to
article I, section 2.
• Permits a unit owner in a condominium association to install an alternative fuel station for an
alternative fuel motor vehicle within the boundaries of the owner's limited common element or
exclusively designated parking area.
74
Id. at 7.
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On January 22, 2020, the Civil Justice Subcommittee adopted a strike-all amendment and reported the bill
favorably as a committee substitute. The amendment:
• Clarified that the records a condominium association must maintain are written records related to the
association's obligation.
• Required condominium association bylaws to provide for mandatory alternative dispute resolution,
not just mandatory non-binding arbitration.
• Changes references from "alternative fuel station" to "natural gas fuel station," providing that a
condominium association may not prevent a unit owner from installing a natural gas fuel station
within his or her exclusively-designated or limited common element parking space.
• Required either mandatory non-binding arbitration or presuit mediation of condominium disputes
prior to initiating litigation of the dispute in court, with the exception of election and recall disputes,
which must be arbitrated by the Division or filed with a court of competent jurisdiction.
This analysis is drafted to the committee substitute to the committee substitute as passed by the Civil
Justice Subcommittee.
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F L O R D A H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/H B623 2020
1 A bill to be entitled
2 An act relating to community associations; amending s.
3 514.0115, F.S.; exempting certain property association
4 pools from Department of Health regulations; amending
5 s. 627.714, F.S.; prohibiting subrogation rights
6 against a condominium association under certain
7 circumstances; amending s. 718.111, F.S.; requiring
8 certain records to be maintained for a specified time;
9 prohibiting an association from requiring certain
10 actions related to the inspection of records; revising
11 requirements relating to certain condominium
12 associations posting digital copies of certain
13 documents; amending s. 718.112, F.S.; prohibiting
14 certain provisions in governing documents; authorizing
15 the association to record certain notice in the public
16 record; limiting liability; specifying that only board
17 service that occurs on or after a specified date may
18 be used for calculating a board member's term limit;
19 providing requirements for certain notices;
20 prohibiting an association from charging certain fees;
21 providing an exception; requiring certain governing
22 documents to provide for mandatory alternative dispute
23 resolution instead of arbitration; deleting a
24 prohibition against employing or contracting with
25 certain service providers; amending s. 718.113, F.S.;
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26 revising regulations for electric vehicles; providing
27 definitions; providing that an association may not
28 prohibit a unit owner from installing a natural gas
29 fuel station; providing requirements for installing
30 such fuel station; amending s. 718.1255, F.S.;
31 revising alternative dispute resolution requirements;
32 authorizing parties to initiate presuit mediation
33 rather than arbitration in certain disputes; amending
34 s. 718.303, F.S.; revising requirements for certain
35 actions for failure to comply with specified
36 provisions; revising requirements for certain fines;
37 amending s. 718.5014, F.S.; revising the location of
38 the principal office of the Office of the Condominium
39 Ombudsman; amending s. 719.103, F.S.; revising the
40 definition of the term "unit" to specify that an
41 interest in a cooperative unit is an interest in real
42 property; amending s. 719.104, F.S.; prohibiting an
43 association from requiring certain actions related to
44 the inspection of records; amending s. 719.106, F.S.;
45 revising provisions related to a quorum and voting
46 rights for members remotely participating in meetings;
47 prohibiting certain provisions in governing documents;
48 authorizing the association to record certain notice
49 in the public record; limiting liability; amending s.
50 720.303, F.S.; authorizing an association to adopt
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51 procedures for electronic meeting notices; revising
52 the documents that constitute the official records of
53 an association; amending s. 720.305, F.S.; providing
54 requirements for certain fines; amending s. 720.306,
55 F.S.; revising requirements for providing certain
56 notices; amending s. 720.3075, F.S.; prohibiting
57 certain provisions in governing documents; authorizing
58 the association to record certain notice in the public
59 record; limiting liability; providing an effective
60 date.
61
62 Be It Enacted by the Legislature of the State of Florida:
63
64 Section 1. Paragraph (a) of subsection (2) of section
65 514.0115, Florida Statutes, is amended to read:
66 514.0115 Exemptions from supervision or regulation;
67 variances.-
68 (2) (a) Pools serving condominium, cooperative, and
69 homeowners' associations, as well as other property
70 associations, which have no more than 32 condominium or
71 cooperative units or parcels and which are not operated as a
72 public lodging establishments are establishment shall be exempt
73 from supervision under this chapter, except for water quality.
74 Section 2. Subsection (4) of section 627.714, Florida
75 Statutes, is amended to read:
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76 627.714 Residential condominium unit owner coverage; loss
77 assessment coverage required.-
78 (4) Every individual unit owner's residential property
79 policy must contain a provision stating that the coverage
80 afforded by such policy is excess coverage over the amount
81 recoverable under any other policy covering the same property.
82 If a condominium association's insurance policy does not provide
83 rights for subrogation against the unit owners in the
84 association, an insurance policy issued to an individual unit
85 owner located in the association may not provide rights of
86 subrogation against the condominium association.
87 Section 3. Paragraphs (a) , (b) , ( c) , and ( g) of subsection
88 (12) of section 718.111, Florida Statutes, are amended to read:
89 718.111 The association.-
90 (12) OFFICIAL RECORDS.-
91 (a) From the inception of the association, the association
92 shall maintain each of the following items, if applicable, which
93 constitutes the official records of the association:
94 1. A copy of the plans, permits, warranties, and other
95 items provided by the developer pursuant to s. 718.301(4).
96 2. A photocopy of the recorded declaration of condominium
97 of each condominium operated by the association and each
98 amendment to each declaration.
99 3. A photocopy of the recorded bylaws of the association
100 and each amendment to the bylaws.
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101 4. A certified copy of the articles of incorporation of
102 the association, or other documents creating the association,
103 and each amendment thereto.
104 5. A copy of the current rules of the association.
105 6. A book or books that contain the minutes of all
106 meetings of the association, the board of administration, and
107 the unit owners.
108 7. A current roster of all unit owners and their mailing
109 addresses, unit identifications, voting certifications, and, if
110 known, telephone numbers. The association shall also maintain
111 the e-mail addresses and facsimile numbers of unit owners
112 consenting to receive notice by electronic transmission. Thee-
113 mail addresses and facsimile numbers are not accessible to unit
114 owners if consent to receive notice by electronic transmission
115 is not provided in accordance with sub-subparagraph (c)3.e.
116 However, the association is not liable for an inadvertent
117 disclosure of the e-mail address or facsimile number for
118 receiving electronic transmission of notices.
119 8. All current insurance policies of the association and
120 condominiums operated by the association.
121 9. A current copy of any management agreement, lease, or
122 other contract to which the association is a party or under
123 which the association or the unit owners have an obligation or
124 responsibility.
125 10. Bills of sale or transfer for all property owned by
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126 the association.
127 11. Accounting records for the association and separate
128 accounting records for each condominium that the association
129 operates. Any person who knowingly or intentionally defaces or
130 destroys such records, or who knowingly or intentionally fails
131 to create or maintain such records, with the intent of causing
132 harm to the association or one or more of its members, is
133 personally subject to a civil penalty pursuant to s.
134 718. 501 ( 1) (d). The accounting records must include, but are not
135 limited to:
136 a. Accurate, itemized, and detailed records of all
137 receipts and expenditures.
138 b. A current account and a monthly, bimonthly, or
139 quarterly statement of the account for each unit designating the
140 name of the unit owner, the due date and amount of each
141 assessment, the amount paid on the account, and the balance due.
142 c. All audits, reviews, accounting statements, and
143 financial reports of the association or condominium.
144 d. All contracts for work to be performed. Bids for work
145 to be performed are also considered official records and must be
146 maintained by the association for at least 1 year after receipt
147 of the bid.
148 12. Ballots, sign-in sheets, voting proxies, and all other
149 papers and electronic records relating to voting by unit owners,
150 which must be maintained for 1 year from the date of the
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151 election, vote, or meeting to which the document relates,
152 notwithstanding paragraph (b).
153 13. All rental records if the association is acting as
154 agent for the rental of condominium units.
155 14. A copy of the current question and answer sheet as
156 described ins. 718.504.
157 15. All other written records of the association not
158 specifically included in the foregoing which are related to the
159 operation of the association.
160 15.-±-6-.- A copy of the inspection report as described ins.
161 718.301(4) (p).
162 16.-1-+-.- Bids for materials, equipment, or services.
163 17. All other written records of the association not
164 specifically included in subparagraphs 1.-16. which are related
165 to the operation of the association.
166 (b) The official records specified in subparagraphs (a)l.-
167 6. must be permanently maintained from the inception of the
168 association. Bids for work to be performed or for materials,
169 equipment, or services must be maintained for at least 1 year
170 after receipt of the bid. All other official records must be
171 maintained within the state for at least 7 years, unless
172 otherwise provided by general law. The records of the
173 association shall be made available to a unit owner within 45
174 miles of the condominium property or within the county in which
175 the condominium property is located within 10 working days after
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176 receipt of a written request by the board or its designee.
177 However, such distance requirement does not apply to an
178 association governing a timeshare condominium. This paragraph
179 may be complied with by having a copy of the official records of
180 the association available for inspection or copying on the
181 condominium property or association property, or the association
182 may offer the option of making the records available to a unit
183 owner electronically via the Internet or by allowing the records
184 to be viewed in electronic format on a computer screen and
185 printed upon request. The association is not responsible for the
186 use or misuse of the information provided to an association
187 member or his or her authorized representative in pursuant to
188 -Hte compliance with requirements of this chapter unless the
189 association has an affirmative duty not to disclose such
190 information under pursuant to this chapter.
191 (c)l. The official records of the association are open to
192 inspection by any association member or the authorized
193 representative of such member at all reasonable times. The right
194 to inspect the records includes the right to make or obtain
195 copies, at the reasonable expense, if any, of the member or
196 authorized representative of such member. A renter of a unit has
197 a right to inspect and copy the association's bylaws and rules.
198 The association may adopt reasonable rules regarding the
199 frequency, time, location, notice, and manner of record
200 inspections and copying, but may not require a member to
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201 demonstrate any purpose or state any reason for the inspection.
202 The failure of an association to provide the records within 10
203 working days after receipt of a written request creates a
204 rebuttable presumption that the association willfully failed to
205 comply with this paragraph. A unit owner who is denied access to
206 official records is entitled to the actual damages or minimum
207 damages for the association's willful failure to comply. Minimum
208 damages are $50 per calendar day for up to 10 days, beginning on
209 the 11th working day after receipt of the written request. The
210 failure to permit inspection entitles any person prevailing in
211 an enforcement action to recover reasonable attorney fees from
212 the person in control of the records who, directly or
213 indirectly, knowingly denied access to the records.
214 2. Any person who knowingly or intentionally defaces or
215 destroys accounting records that are required by this chapter to
216 be maintained during the period for which such records are
217 required to be maintained, or who knowingly or intentionally
218 fails to create or maintain accounting records that are required
219 to be created or maintained, with the intent of causing harm to
220 the association or one or more of its members, is personally
221 subject to a civil penalty under pursuant to s. 718.501 (1) (d).
222 3. The association shall maintain an adequate number of
223 copies of the declaration, articles of incorporation, bylaws,
224 and rules, and all amendments to each of the foregoing, as well
225 as the question and answer sheet as described ins. 718.504 and
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226 year-end financial information required under this section, on
227 the condominium property to ensure their availability to unit
228 owners and prospective purchasers, and may charge its actual
229 costs for preparing and furnishing these documents to those
230 requesting the documents. An association shall allow a member or
231 his or her authorized representative to use a portable device,
232 including a smartphone, tablet, portable scanner, or any other
233 technology capable of scanning or taking photographs, to make an
234 electronic copy of the official records in lieu of the
235 association's providing the member or his or her authorized
236 representative with a copy of such records. The association may
237 not charge a member or his or her authorized representative for
238 the use of a portable device. Notwithstanding this paragraph,
239 the following records are not accessible to unit owners:
240 a. Any record protected by the lawyer-client privilege as
241 described ins. 90.502 and any record protected by the work-
242 product privilege, including a record prepared by an association
243 attorney or prepared at the attorney's express direction, which
244 reflects a mental impression, conclusion, litigation strategy,
245 or legal theory of the attorney or the association, and which
246 was prepared exclusively for civil or criminal litigation or for
247 adversarial administrative proceedings, or which was prepared in
248 anticipation of such litigation or proceedings until the
249 conclusion of the litigation or proceedings.
250 b. Information obtained by an association in connection
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251 with the approval of the lease, sale, or other transfer of a
252 unit.
253 c. Personnel records of association or management company
254 employees, including, but not limited to, disciplinary, payroll,
255 health, and insurance records. For purposes of this sub-
256 subparagraph, the term "personnel records'' does not include
257 written employment agreements with an association employee or
258 management company, or budgetary or financial records that
259 indicate the compensation paid to an association employee.
260 d. Medical records of unit owners.
261 e. Social security numbers, driver license numbers, credit
262 card numbers, e-mail addresses, telephone numbers, facsimile
263 numbers, emergency contact information, addresses of a unit
264 owner other than as provided to fulfill the association's notice
265 requirements, and other personal identifying information of any
266 person, excluding the person's name, unit designation, mailing
267 address, property address, and any address, e-mail address, or
268 facsimile number provided to the association to fulfill the
269 association's notice requirements. Notwithstanding the
270 restrictions in this sub-subparagraph, an association may print
271 and distribute to unit parcel owners a directory containing the
272 name, unit parcel address, and all telephone numbers of each
273 unit parcel owner. However, an owner may exclude his or her
274 telephone numbers from the directory by so requesting in writing
275 to the association. An owner may consent in writing to the
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276 disclosure of other contact information described in this sub-
277 subparagraph. The association is not liable for the inadvertent
278 disclosure of information that is protected under this sub-
279 subparagraph if the information is included in an official
280 record of the association and is voluntarily provided by an
281 owner and not requested by the association.
282 f. Electronic security measures that are used by the
283 association to safeguard data, including passwords.
284 g. The software and operating system used by the
285 association which allow the manipulation of data, even if the
286 owner owns a copy of the same software used by the association.
287 The data is part of the official records of the association.
288 (g)l. By January 1, 2019, an association managing a
289 condominium with 150 or more units which does not contain
290 timeshare units shall post digital copies of the documents
291 specified in subparagraph 2. on its website or make such
292 documents available through an application that can be
293 downloaded on a mobile device.
294 a. The association's website or application must be:
295 (I) An independent website, application, or web portal
296 wholly owned and operated by the association; or
297 (II) A website, application, or web portal operated by a
298 third-party provider with whom the association owns, leases,
299 rents, or otherwise obtains the right to operate a web page,
300 subpage, web portal, er collection of subpages or web portalsL
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301 or application which is dedicated to the association's
302 activities and on which required notices, records, and documents
303 may be posted or made available by the association.
304 b. The association's website or application must be
305 accessible through the Internet and must contain a subpage, web
306 portal, or other protected electronic location that is
307 inaccessible to the general public and accessible only to unit
308 owners and employees of the association.
309 c. Upon a unit owner's written request, the association
310 must provide the unit owner with a username and password and
311 access to the protected sections of the association's website or
312 application that contain any notices, records, or documents that
313 must be electronically provided.
314 2. A current copy of the following documents must be
315 posted in digital format on the association's website or
316 application:
317 a. The recorded declaration of condominium of each
318 condominium operated by the association and each amendment to
319 each declaration.
320 b. The recorded bylaws of the association and each
321 amendment to the bylaws.
322 c. The articles of incorporation of the association, or
323 other documents creating the association, and each amendment to
324 the articles of incorporation or other documents thereto. The
325 copy posted pursuant to this sub-subparagraph must be a copy of
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326 the articles of incorporation filed with the Department of
327 State.
328 d. The rules of the association.
329 e. A list of all executory contracts or documents to which
330 the association is a party or under which the association or the
331 unit owners have an obligation or responsibility and, after
332 bidding for the related materials, equipment, or services has
333 closed, a list of bids received by the association within the
334 past year. Summaries of bids for materials, equipment, or
335 services which exceed $500 must be maintained on the website or
336 application for 1 year. In lieu of summaries, complete copies of
337 the bids may be posted.
338 f. The annual budget required bys. 718.112(2) (f) and any
339 proposed budget to be considered at the annual meeting.
340 g. The financial report required by subsection (13) and
341 any monthly income or expense statement to be considered at a
342 meeting.
343 h. The certification of each director required bys.
344 718 .112 (2) (d) 4 .b.
345 i. All contracts or transactions between the association
346 and any director, officer, corporation, firm, or association
347 that is not an affiliated condominium association or any other
348 entity in which an association director is also a director or
349 officer and financially interested.
350 j. Any contract or document regarding a conflict of
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351 interest or possible conflict of interest as provided in ss.
352 4 6 8 . 4 3 6 ( 2) ( b) 6. and 718 . 3 0 2 7 ( 3) .
353 k. The notice of any unit owner meeting and the agenda for
354 the meeting, as required bys. 718.112(2) (d)3., no later than 14
355 days before the meeting. The notice must be posted in plain view
356 on the front page of the website or application, or on a
357 separate subpage of the website or application labeled "Notices"
358 which is conspicuously visible and linked from the front page.
359 The association must also post on its website or application any
360 document to be considered and voted on by the owners during the
361 meeting or any document listed on the agenda at least 7 days
362 before the meeting at which the document or the information
363 within the document will be considered.
364 1. Notice of any board meeting, the agenda, and any other
365 document required for the meeting as required bys.
366 718.112(2) (c), which must be posted no later than the date
367 required for notice under pursuant to s. 718.112(2) (c).
368 3. The association shall ensure that the information and
369 records described in paragraph (c), which are not allowed to be
370 accessible to unit owners, are not posted on the association's
371 website or application. If protected information or information
372 restricted from being accessible to unit owners is included in
373 documents that are required to be posted on the association's
374 website or application, the association shall ensure the
375 information is redacted before posting the documents onlinc.
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376 Notwithstanding the foregoing, the association or its agent is
377 not liable for disclosing information that is protected or
378 restricted under pursuant to this paragraph unless such
379 disclosure was made with a knowing or intentional disregard of
380 the protected or restricted nature of such information.
381 4. The failure of the association to post information
382 required under subparagraph 2. is not in and of itself
383 sufficient to invalidate any action or decision of the
384 association's board or its committees.
385 Section 4. Paragraphs ( d) , ( i) , ( k) , and (p) of subsection
386 (2) of section 718.112, Florida Statutes, are amended, and
387 paragraph (c) of subsection (1) is added to that section, to
388 read:
389 718.112 Bylaws.-
390 (1) GENERALLY.-
391 (c) Any provision of the declaration, the association
392 bylaws, or reasonable rules or regulations of the association
393 which diminish or infringe upon any right protected under the
394 Fourteenth Amendment to the United States Constitution ors. 2,
395 Art. I of the State Constitution is void and unenforceable
396 without further action of the association. The association may
397 record a notice in the public records of the county in which the
398 condominium is located evidencing its intention to not enforce
399 such provision. The failure of the association to record a
400 notice in the public record may not be the basis for liability
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401 or evidence of discrimination or a discriminatory intention.
402 (2) REQUIRED PROVISIONS.-The bylaws shall provide for the
403 following and, if they do not do so, shall be deemed to include
404 the following:
405 (d) Unit owner meetings.-
406 1. An annual meeting of the unit owners must be held at
407 the location provided in the association bylaws and, if the
408 bylaws are silent as to the location, the meeting must be held
409 within 45 miles of the condominium property. However, such
410 distance requirement does not apply to an association governing
411 a timeshare condominium.
412 2. Unless the bylaws provide otherwise, a vacancy on the
413 board caused by the expiration of a director's term must be
414 filled by electing a new board member, and the election must be
415 by secret ballot. An election is not required if the number of
416 vacancies equals or exceeds the number of candidates. For
417 purposes of this paragraph, the term "candidate" means an
418 eligible person who has timely submitted the written notice, as
419 described in sub-subparagraph 4.a., of his or her intention to
420 become a candidate. Except in a timeshare or nonresidential
421 condominium, or if the staggered term of a board member does not
422 expire until a later annual meeting, or if all members' terms
423 would otherwise expire but there are no candidates, the terms of
424 all board members expire at the annual meeting, and such members
425 may stand for reelection unless prohibited by the bylaws. Board
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426 members may serve terms longer than 1 year if permitted by the
427 bylaws or articles of incorporation. A board member may not
428 serve more than 8 consecutive years unless approved by an
429 affirmative vote of unit owners representing two-thirds of all
430 votes cast in the election or unless there are not enough
431 eligible candidates to fill the vacancies on the board at the
432 time of the vacancy. Only board service that occurs on or after
433 July 1, 2018, may be used when calculating a board member's term
434 limit. If the number of board members whose terms expire at the
435 annual meeting equals or exceeds the number of candidates, the
436 candidates become members of the board effective upon the
437 adjournment of the annual meeting. Unless the bylaws provide
438 otherwise, any remaining vacancies shall be filled by the
439 affirmative vote of the majority of the directors making up the
440 newly constituted board even if the directors constitute less
441 than a quorum or there is only one director. In a residential
442 condominium association of more than 10 units or in a
443 residential condominium association that does not include
444 timeshare units or timeshare interests, co-owners of a unit may
445 not serve as members of the board of directors at the same time
446 unless they own more than one unit or unless there are not
447 enough eligible candidates to fill the vacancies on the board at
448 the time of the vacancy. A unit owner in a residential
449 condominium desiring to be a candidate for board membership must
450 comply with sub-subparagraph 4.a. and must be eligible to be a
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451 candidate to serve on the board of directors at the time of the
452 deadline for submitting a notice of intent to run in order to
453 have his or her name listed as a proper candidate on the ballot
454 or to serve on the board. A person who has been suspended or
455 removed by the division under this chapter, or who is delinquent
456 in the payment of any monetary obligation due to the
457 association, is not eligible to be a candidate for board
458 membership and may not be listed on the ballot. A person who has
459 been convicted of any felony in this state or in a United States
460 District or Territorial Court, or who has been convicted of any
461 offense in another jurisdiction which would be considered a
462 felony if committed in this state, is not eligible for board
463 membership unless such felon's civil rights have been restored
464 for at least 5 years as of the date such person seeks election
465 to the board. The validity of an action by the board is not
466 affected if it is later determined that a board member is
467 ineligible for board membership due to having been convicted of
468 a felony. This subparagraph does not limit the term of a member
469 of the board of a nonresidential or timeshare condominium.
470 3. The bylaws must provide the method of calling meetings
471 of unit owners, including annual meetings. Written notice of an
472 annual meeting must include an agenda~, must be mailed, hand
473 delivered, or electronically transmitted to each unit owner at
474 least 14 days before the annual meeting~7 and ffiU-s-t- be posted in
475 a conspicuous place on the condominium property at least 14
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476 continuous days before the annual meeting. Written notice of a
477 meeting other than an annual meeting must include an agenda; be
478 mailed, hand delivered, or electronically transmitted to each
479 unit owner; and be posted in a conspicuous place on the
480 condominium property in accordance with the minimum period of
481 time for posting a notice as set forth in the bylaws, and if the
482 bylaws do not provide such notice requirements, then at least 14
483 continuous days before the meeting. Upon notice to the unit
484 owners, the board shall, by duly adopted rule, designate a
485 specific location on the condominium property where all notices
486 of unit owner meetings must be posted. This requirement does not
487 apply if there is no condominium property for posting notices.
488 In lieu of, or in addition to, the physical posting of meeting
489 notices, the association may, by reasonable rule, adopt a
490 procedure for conspicuously posting and repeatedly broadcasting
491 the notice and the agenda on a closed-circuit cable television
492 system serving the condominium association. However, if
493 broadcast notice is used in lieu of a notice posted physically
494 on the condominium property, the notice and agenda must be
495 broadcast at least four times every broadcast hour of each day
496 that a posted notice is otherwise required under this section.
497 If broadcast notice is provided, the notice and agenda must be
498 broadcast in a manner and for a sufficient continuous length of
499 time so as to allow an average reader to observe the notice and
500 read and comprehend the entire content of the notice and the
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501 agenda. In addition to any of the authorized means of providing
502 notice of a meeting of the board, the association may, by rule,
503 adopt a procedure for conspicuously posting the meeting notice
504 and the agenda on a website serving the condominium association
505 for at least the minimum period of time for which a notice of a
506 meeting is also required to be physically posted on the
507 condominium property. Any rule adopted shall, in addition to
508 other matters, include a requirement that the association send
509 an electronic notice in the same manner as a notice for a
510 meeting of the members, which must include a hyperlink to the
511 website where the notice is posted, to unit owners whose e-mail
512 addresses are included in the association's official records.
513 Unless a unit owner waives in writing the right to receive
514 notice of the annual meeting, such notice must be hand
515 delivered, mailed, or electronically transmitted to each unit
516 owner. Notice for meetings and notice for all other purposes
517 must be mailed to each unit owner at the address last furnished
518 to the association by the unit owner, or hand delivered to each
519 unit owner. However, if a unit is owned by more than one person,
520 the association must provide notice to the address that the
521 developer identifies for that purpose and thereafter as one or
522 more of the owners of the unit advise the association in
523 writing, or if no address is given or the owners of the unit do
524 not agree, to the address provided on the deed of record. An
525 officer of the association, or the manager or other person
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526 providing notice of the association meeting, must provide an
527 affidavit or United States Postal Service certificate of
528 mailing, to be included in the official records of the
529 association affirming that the notice was mailed or hand
530 delivered in accordance with this provision.
531 4. The members of the board of a residential condominium
532 shall be elected by written ballot or voting machine. Proxies
533 may not be used in electing the board in general elections or
534 elections to fill vacancies caused by recall, resignation, or
535 otherwise, unless otherwise provided in this chapter. This
536 subparagraph does not apply to an association governing a
537 timeshare condominium.
538 a. At least 60 days before a scheduled election, the
539 association shall mail, deliver, or electronically transmit, by
540 separate association mailing or included in another association
541 mailing, delivery, or transmission, including regularly
542 published newsletters, to each unit owner entitled to a vote, a
543 first notice of the date of the election. A unit owner or other
544 eligible person desiring to be a candidate for the board must
545 give written notice of his or her intent to be a candidate to
546 the association at least 40 days before a scheduled election.
547 Together with the written notice and agenda as set forth in
548 subparagraph 3., the association shall mail, deliver, or
549 electronically transmit a second notice of the election to all
550 unit owners entitled to vote, together with a ballot that lists
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551 all candidates not less than 14 days or more than 34 days before
552 the date of the election. Upon request of a candidate, an
553 information sheet, no larger than 8 1/2 inches by 11 inches,
554 which must be furnished by the candidate at least 35 days before
555 the election, must be included with the mailing, delivery, or
556 transmission of the ballot, with the costs of mailing, delivery,
557 or electronic transmission and copying to be borne by the
558 association. The association is not liable for the contents of
559 the information sheets prepared by the candidates. In order to
560 reduce costs, the association may print or duplicate the
561 information sheets on both sides of the paper. The division
562 shall by rule establish voting procedures consistent with this
563 sub-subparagraph, including rules establishing procedures for
564 giving notice by electronic transmission and rules providing for
565 the secrecy of ballots. Elections shall be decided by a
566 plurality of ballots cast. There is no quorum requirement;
567 however, at least 20 percent of the eligible voters must cast a
568 ballot in order to have a valid election. A unit owner may not
569 authorize any other person to vote his or her ballot, and any
570 ballots improperly cast are invalid. A unit owner who violates
571 this provision may be fined by the association in accordance
572 withs. 718.303. A unit owner who needs assistance in casting
573 the ballot for the reasons stated ins. 101.051 may obtain such
574 assistance. The regular election must occur on the date of the
575 annual meeting. Notwithstanding this sub-subparagraph, an
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576 election is not required unless more candidates file notices of
577 intent to run or are nominated than board vacancies exist.
578 b. Within 90 days after being elected or appointed to the
579 board of an association of a residential condominium, each newly
580 elected or appointed director shall certify in writing to the
581 secretary of the association that he or she has read the
582 association's declaration of condominium, articles of
583 incorporation, bylaws, and current written policies; that he or
584 she will work to uphold such documents and policies to the best
585 of his or her ability; and that he or she will faithfully
586 discharge his or her fiduciary responsibility to the
587 association's members. In lieu of this written certification,
588 within 90 days after being elected or appointed to the board,
589 the newly elected or appointed director may submit a certificate
590 of having satisfactorily completed the educational curriculum
591 administered by a division-approved condominium education
592 provider within 1 year before or 90 days after the date of
593 election or appointment. The written certification or
594 educational certificate is valid and does not have to be
595 resubmitted as long as the director serves on the board without
596 interruption. A director of an association of a residential
597 condominium who fails to timely file the written certification
598 or educational certificate is suspended from service on the
599 board until he or she complies with this sub-subparagraph. The
600 board may temporarily fill the vacancy during the period of
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601 suspension. The secretary shall cause the association to retain
602 a director's written certification or educational certificate
603 for inspection by the members for 5 years after a director's
604 election or the duration of the director's uninterrupted tenure,
605 whichever is longer. Failure to have such written certification
606 or educational certificate on file does not affect the validity
607 of any board action.
608 c. Any challenge to the election process must be commenced
609 within 60 days after the election results are announced.
610 5. Any approval by unit owners called for by this chapter
611 or the applicable declaration or bylaws, including, but not
612 limited to, the approval requirement ins. 718.111(8), must be
613 made at a duly noticed meeting of unit owners and is subject to
614 all requirements of this chapter or the applicable condominium
615 documents relating to unit owner decisionmaking, except that
616 unit owners may take action by written agreement, without
617 meetings, on matters for which action by written agreement
618 without meetings is expressly allowed by the applicable bylaws
619 or declaration or any law that provides for such action.
620 6. Unit owners may waive notice of specific meetings if
621 allowed by the applicable bylaws or declaration or any law.
622 Notice of meetings of the board of administration, unit owner
623 meetings, except unit owner meetings called to recall board
624 members under paragraph (j), and committee meetings may be given
625 by electronic transmission to unit owners who consent to receive
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626 notice by electronic transmission. A unit owner who consents to
627 receiving notices by electronic transmission is solely
628 responsible for removing or bypassing filters that block receipt
629 of mass e-mails emails sent to members on behalf of the
630 association in the course of giving electronic notices.
631 7. Unit owners have the right to participate in meetings
632 of unit owners with reference to all designated agenda items.
633 However, the association may adopt reasonable rules governing
634 the frequency, duration, and manner of unit owner participation.
635 8. A unit owner may tape record or videotape a meeting of
636 the unit owners subject to reasonable rules adopted by the
637 division.
638 9. Unless otherwise provided in the bylaws, any vacancy
639 occurring on the board before the expiration of a term may be
640 filled by the affirmative vote of the majority of the remaining
641 directors, even if the remaining directors constitute less than
642 a quorum, or by the sole remaining director. In the alternative,
643 a board may hold an election to fill the vacancy, in which case
644 the election procedures must conform to sub-subparagraph 4.a.
645 unless the association governs 10 units or fewer and has opted
646 out of the statutory election process, in which case the bylaws
647 of the association control. Unless otherwise provided in the
648 bylaws, a board member appointed or elected under this section
649 shall fill the vacancy for the unexpired term of the seat being
650 filled. Filling vacancies created by recall is governed by
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651 paragraph (j) and rules adopted by the division.
652 10. This chapter does not limit the use of general or
653 limited proxies, require the use of general or limited proxies,
654 or require the use of a written ballot or voting machine for any
655 agenda item or election at any meeting of a timeshare
656 condominium association or nonresidential condominium
657 association.
658
659 Notwithstanding subparagraph (b)2. and sub-subparagraph 4.a., an
660 association of 10 or fewer units may, by affirmative vote of a
661 majority of the total voting interests, provide for different
662 voting and election procedures in its bylaws, which may be by a
663 proxy specifically delineating the different voting and election
664 procedures. The different voting and election procedures may
665 provide for elections to be conducted by limited or general
666 proxy.
667 (i) Transfer fees.-An association may not H-e charge an
668 applicant any fees, except the actual costs of any background
669 check or screening performed shall be made by the association~
670 or any body thereof in connection with the sale, mortgage,
671 lease, sublease, or other transfer of a unit unless the
672 association is required to approve such transfer and a fee for
673 such approval is provided for in the declaration, articles, or
674 bylaws. Except for the actual costs of any background check or
675 screening performed by the association, any such fee may be
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676 preset, but may not in no event may ouch fee exceed $100 per
677 applicant other than spouses or parent and dependent child, who
678 husband/wife or parent/dependent child, which are considered one
679 applicant. However, if the lease or sublease is a renewal of a
680 lease or sublease with the same lessee or sublessee, a charge
681 may not no charge shall be made. The foregoing notwithstanding,
682 an association may, if the authority to do so appears in the
683 declaration, articles, or bylaws, require that a prospective
684 lessee place a security deposit, in an amount not to exceed the
685 equivalent of 1 month's rent, into an escrow account maintained
686 by the association. The security deposit shall protect against
687 damages to the common elements or association property. Payment
688 of interest, claims against the deposit, refunds, and disputes
689 under this paragraph shall be handled in the same fashion as
690 provided in part II of chapter 83.
691 (k) Alternative dispute resolution Arbitration.-There must
692 shall be a provision for mandatory alternative dispute
693 resolution nonbinding arbitration as provided for ins. 718.1255
694 for any residential condominium.
695 (p) Service providers; conflicts of interest. An
696 association, which is not a timeshare condominium association,
697 may not eHlploy or contract with any service provider that is
698 owned or operated by a board member or with any person who has a
699 financial relationship with a board member or officer, or a
700 relative within the third degree of consanguinity by blood or
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701 marriage of a board member or officer. This paragraph does not
702 apply to a service provider in which a board member or officer,
703 or a relative within the third degree of consanguinity by blood
704 or marriage of a board m.effiber or officer, owns less than 1
705 percent of the equity shares.
706 Section 5. Subsection (8) of section 718.113, Florida
707 Statutes, is amended to read:
708 718.113 Maintenance; limitation upon improvement; display
709 of flag; hurricane shutters and protection; display of religious
710 decorations.-
711 ( 8) The Legislature finds that the use of electric and
712 natural gas fuel vehicles conserves and protects the state's
713 environmental resources, provides significant economic savings
714 to drivers, and serves an important public interest. The
715 participation of condominium associations is essential to the
716 state's efforts to conserve and protect the state's
717 environmental resources and provide economic savings to drivers.
718 For purposes of this subsection, the term "natural gas fuel'' has
719 the same meaning as ins. 206.9951, and the term "natural gas
720 fuel vehicle" means any motor vehicle, as defined ins. 320.01,
721 that is powered by natural gas fuel. Therefore, the installation
722 of an electric vehicle charging station or natural gas fuel
723 station shall be governed as follows:
724 (a) A declaration of condominium or restrictive covenant
725 may not prohibit or be enforced so as to prohibit any unit owner
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726 from installing an electric vehicle charging station or natural
727 gas fuel station within the boundaries of the unit owner's
728 limited common element or exclusively designated parking area.
729 The board of administration of a condominium association may not
730 prohibit a unit owner from installing an electric vehicle
731 charging station for an electric vehicle, as defined ins.
732 320.01, or a natural gas fuel station for a natural gas fuel
733 vehicle within the boundaries of his or her limited common
734 element or exclusively designated parking area. The installation
735 of such charging or fuel stations are subject to the provisions
736 of this subsection.
737 (b) The installation may not cause irreparable damage to
738 the condominium property.
739 (c) The electricity for the electric vehicle charging
740 station or natural gas fuel station must be separately metered
741 or metered by an embedded meter and payable by the unit owner
742 installing such charging or fuel station or by his or her
743 successor.
744 (d) The cost for supply and storage of the natural gas
745 fuel must be paid by the unit owner installing the natural gas
746 fuel station or by his or her successor.
747 l.§1-f-a+ The unit owner who is installing an electric
748 vehicle charging station or natural gas fuel station is
749 responsible for the costs of installation, operation,
750 maintenance, and repair, including, but not limited to, hazard
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751 and liability insurance. The association may enforce payment of
752 such costs under pursuant to s. 718.116.
753 l!l-f-e+ If the unit owner or his or her successor decides
754 there is no longer a need for the electronic vehicle charging
755 station or natural gas fuel station, such person is responsible
756 for the cost of removal of such the eleetronie vehicle charging
757 or fuel station. The association may enforce payment of such
758 costs under pursuant to s. 718.116.
759 (g) The unit owner installing, maintaining, or removing
760 the electric vehicle charging station or natural gas fuel
761 station is responsible for complying with all federal, state, or
762 local laws and regulations applicable to such installation,
763 maintenance, or removal.
764 ll21_-K+ The association may require the unit owner to:
765 1. Comply with bona fide safety requirements, consistent
766 with applicable building codes or recognized safety standards,
767 for the protection of persons and property.
768 2. Comply with reasonable architectural standards adopted
769 by the association that govern the dimensions, placement, or
770 external appearance of the electric vehicle charging station or
771 natural gas fuel station, provided that such standards may not
772 prohibit the installation of such charging or fuel station or
773 substantially increase the cost thereof.
774 3. Engage the services of a licensed and registered firm
775 eleetrieal eontraetor or engineer familiar with the installation
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776 or removal and core requirements of an electric vehicle charging
777 station or natural gas fuel station.
778 4. Provide a certificate of insurance naming the
779 association as an additional insured on the owner's insurance
780 policy for any claim related to the installation, maintenance,
781 or use of the electric vehicle charging station or natural gas
782 fuel station within 14 days after receiving the association's
783 approval to install such charging or fuel station or notice to
784 provide such a certificate.
785 5. Reimburse the association for the actual cost of any
786 increased insurance premium amount attributable to the electric
787 vehicle charging station or natural gas fuel station within 14
788 days after receiving the association's insurance premium
789 invoice.
790 lll_~ The association provides an implied easement across
791 the common elements of the condominium property to the unit
792 owner for purposes of the installation of the electric vehicle
793 charging station or natural gas fuel station installation, and
794 the furnishing of electrical power or natural gas fuel supply,
795 including any necessary equipment, to such charging or fuel
796 station, subject to the requirements of this subsection.
797 Section 6. Subsections (5) and (6) of section 718.1255,
798 Florida Statutes, are renumbered as subsections (6) and (7),
799 respectively, paragraph (a) of subsection (4) of that section is
800 amended, and a new subsection (5) is added to that section, to
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801 read:
802 718.1255 Alternative dispute resolution; voluntary
803 mediation; mandatory nonbinding arbitration; legislative
804 findings.-
805 (4) MANDATORY NONBINDING ARBITRATION AND MEDIATION OF
806 DISPUTES.-The Division of Florida Condominiums, Timeshares, and
807 Mobile Homes of the Department of Business and Professional
808 Regulation may employ full-time attorneys to act as arbitrators
809 to conduct the arbitration hearings provided by this chapter.
810 The division may also certify attorneys who are not employed by
811 the division to act as arbitrators to conduct the arbitration
812 hearings provided by this chapter.~ Ne person may not be
813 employed by the department as a full-time arbitrator unless he
814 or she is a member in good standing of The Florida Bar. A person
815 may only be certified by the division to act as an arbitrator if
816 he or she has been a member in good standing of The Florida Bar
817 for at least 5 years and has mediated or arbitrated at least 10
818 disputes involving condominiums in this state during the 3 years
819 immediately preceding the date of application, mediated or
820 arbitrated at least 30 disputes in any subject area in this
821 state during the 3 years immediately preceding the date of
822 application, or attained board certification in real estate law
823 or condominium and planned development law from The Florida Bar.
824 Arbitrator certification is valid for 1 year. An arbitrator who
825 does not maintain the minimum qualifications for initial
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826 certification may not have his or her certification renewed. The
827 department may not enter into a legal services contract for an
828 arbitration hearing under this chapter with an attorney who is
829 not a certified arbitrator unless a certified arbitrator is not
830 available within 50 miles of the dispute. The department shall
831 adopt rules of procedure to govern such arbitration hearings
832 including mediation incident thereto. The decision of an
833 arbitrator is shall be final; however, a decision is shall not
834 ee deemed final agency action. Nothing in this provision shall
835 be construed to foreclose parties from proceeding in a trial de
836 nova unless the parties have agreed that the arbitration is
837 binding. If judicial proceedings are initiated, the final
838 decision of the arbitrator is shall be admissible in evidence in
839 the trial de nova.
840 (a) Before Prior to the institution of court litigation, a
841 party to a dispute shall either petition the division for
842 nonbinding arbitration or initiate presuit mediation as provided
843 in subsection (5). Arbitration is binding on the parties if all
844 parties in arbitration agree to be bound in a writing filed in
845 arbitration. The petition must be accompanied by a filing fee in
846 the amount of $50. Filing fees collected under this section must
847 be used to defray the expenses of the alternative dispute
848 resolution program.
849 (5) PRESUIT MEDIATION.-In lieu of the initiation of
850 nonbinding arbitration as set forth in subsections (1)-(4), a
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851 party may submit a dispute to presuit mediation in accordance
852 withs. 720.311. Election and recall disputes are not eligible
853 for mediation and such disputes must be arbitrated by the
854 division or filed with a court of competent jurisdiction.
855 Section 7. Subsection (1) and paragraph (b) of subsection
856 (3) of section 718.303, Florida Statutes, are amended to read:
857 718.303 Obligations of owners and occupants; remedies.-
858 (1) Each unit owner, eaeft tenant and other invitee, and
859 eaeft association is governed by, and must comply with the
860 provisions of, this chapter, the declaration, the documents
861 creating the association, and the association bylaws which are
862 shall be deemed expressly incorporated into any lease of a unit.
863 Actions at law or in equity for damages or for injunctive
864 relief, or both, for failure to comply with these provisions may
865 be brought by the association or by a unit owner against:
866 (a) The association.
867 (b) A unit owner.
868 (c) Directors designated by the developer, for actions
869 taken by them before control of the association is assumed by
870 unit owners other than the developer.
871 (d) Any director who willfully and knowingly fails to
872 comply with these provisions.
873 (e) Any tenant leasing a unit, and any other invitee
874 occupying a unit.
875
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876 The prevailing party in any such action or in any action in
877 which the purchaser claims a right of voidability based upon
878 contractual provisions as required in s. 718. 503 ( 1) (a) is
879 entitled to recover reasonable attorney attorney's fees. A unit
880 owner prevailing in an action between the association and the
881 unit owner under this subsection section, in addition to
882 recovering his or her reasonable attorney attorney's fees, may
883 recover additional amounts as determined by the court to be
884 necessary to reimburse the unit owner for his or her share of
885 assessments levied by the association to fund its expenses of
886 the litigation. This relief does not exclude other remedies
887 provided by law. Actions arising under this subsection are not
888 considered ffiay not be deeffied to be actions for specific
889 performance.
890 (3) The association may levy reasonable fines for the
891 failure of the owner of the unit or its occupant, licensee, or
892 invitee to comply with any provision of the declaration, the
893 association bylaws, or reasonable rules of the association. A
894 fine may not become a lien against a unit. A fine may be levied
895 by the board on the basis of each day of a continuing violation,
896 with a single notice and opportunity for hearing before a
897 committee as provided in paragraph (b). However, the fine may
898 not exceed $100 per violation, or $1,000 in the aggregate.
899 (b) A fine or suspension levied by the board of
900 administration may not be imposed unless the board first
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901 provides at least 14 days' written notice to the unit owner and,
902 if applicable, any tenant occupant, licensee, or invitee of the
903 unit owner sought to be fined or suspended, and an opportunity
904 for a hearing before a committee of at least three members
905 appointed by the board who are not officers, directors, or
906 employees of the association, or the spouse, parent, child,
907 brother, or sister of an officer, director, or employee. The
908 role of the committee is limited to determining whether to
909 confirm or reject the fine or suspension levied by the board. If
910 the committee does not approve the proposed fine or suspension
911 by majority vote, the fine or suspension may not be imposed. If
912 the proposed fine or suspension is approved by the committee,
913 the fine payment is due 5 days after notice of the approved fine
914 is provided to the unit owner and, if applicable, to any tenant,
915 licensee, or invitee of the unit owner the date of the coffiffi.ittee
916 meeting at which the fine is approved. The association must
917 provide written notice of such fine or suspension by mail or
918 hand delivery to the unit owner and, if applicable, to any
919 tenant, licensee, or invitee of the unit owner.
920 Section 8. Section 718.5014, Florida Statutes, is amended
921 to read:
922 718.5014 Ombudsman location.-The ombudsman shall maintain
923 his or her principal office in~ Leon County on the premises of
924 the division or, if suitable space cannot be provided there, at
925 another place convenient to the offices of the division which
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926 will enable the ombudsman to expeditiously carry out the duties
927 and functions of his or her office. The ombudsman may establish
928 branch offices elsewhere in the state upon the concurrence of
929 the Governor.
930 Section 9. Subsection (25) of section 719.103, Florida
931 Statutes, is amended to read:
932 719.103 Definitions.-As used in this chapter:
933 (25) "Unit" means a part of the cooperative property which
934 is subject to exclusive use and possession. A unit may be
935 improvements, land, or land and improvements together, as
936 specified in the cooperative documents. An interest in a unit is
937 an interest in real property.
938 Section 10. Paragraph (c) of subsection (2) of section
939 719.104, Florida Statutes, is amended to read:
940 719.104 Cooperatives; access to units; records; financial
941 reports; assessments; purchase of leases.-
942 (2) OFFICIAL RECORDS.-
943 (c) The official records of the association are open to
944 inspection by any association member or the authorized
945 representative of such member at all reasonable times. The right
946 to inspect the records includes the right to make or obtain
947 copies, at the reasonable expense, if any, of the association
948 member. The association may adopt reasonable rules regarding the
949 frequency, time, location, notice, and manner of record
950 inspections and copying, but may not require a member to
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951 demonstrate any purpose or state any reason for the inspection.
952 The failure of an association to provide the records within 10
953 working days after receipt of a written request creates a
954 rebuttable presumption that the association willfully failed to
955 comply with this paragraph. A member unit owner who is denied
956 access to official records is entitled to the actual damages or
957 minimum damages for the association's willful failure to comply.
958 The minimum damages are $50 per calendar day for up to 10 days,
959 beginning on the 11th working day after receipt of the written
960 request. The failure to permit inspection entitles any person
961 prevailing in an enforcement action to recover reasonable
962 attorney fees from the person in control of the records who,
963 directly or indirectly, knowingly denied access to the records.
964 Any person who knowingly or intentionally defaces or destroys
965 accounting records that are required by this chapter to be
966 maintained during the period for which such records are required
967 to be maintained, or who knowingly or intentionally fails to
968 create or maintain accounting records that are required to be
969 created or maintained, with the intent of causing harm to the
970 association or one or more of its members, is personally subject
971 to a civil penalty under pursuant to s. 719.501(1) (d). The
972 association shall maintain an adequate number of copies of the
973 declaration, articles of incorporation, bylaws, and rules, and
974 all amendments to each of the foregoing, as well as the question
975 and answer sheet as described ins. 719.504 and year-end
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976 financial information required by the department, on the
977 cooperative property to ensure their availability to members
978 unit owners and prospective purchasers, and may charge its
979 actual costs for preparing and furnishing these documents to
980 those requesting the same. An association shall allow a member
981 or his or her authorized representative to use a portable
982 device, including a smartphone, tablet, portable scanner, or any
983 other technology capable of scanning or taking photographs, to
984 make an electronic copy of the official records in lieu of the
985 association providing the member or his or her authorized
986 representative with a copy of such records. The association may
987 not charge a member or his or her authorized representative for
988 the use of a portable device. Notwithstanding this paragraph,
989 the following records shall not be accessible to members -llfti-t.
990 owners:
991 1. Any record protected by the lawyer-client privilege as
992 described ins. 90.502 and any record protected by the work-
993 product privilege, including any record prepared by an
994 association attorney or prepared at the attorney's express
995 direction which reflects a mental impression, conclusion,
996 litigation strategy, or legal theory of the attorney or the
997 association, and which was prepared exclusively for civil or
998 criminal litigation or for adversarial administrative
999 proceedings, or which was prepared in anticipation of such
1000 litigation or proceedings until the conclusion of the litigation
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1001 or proceedings.
1002 2. Information obtained by an association in connection
1003 with the approval of the lease, sale, or other transfer of a
1004 unit.
1005 3. Personnel records of association or management company
1006 employees, including, but not limited to, disciplinary, payroll,
1007 health, and insurance records. For purposes of this
1008 subparagraph, the term "personnel records'' does not include
1009 written employment agreements with an association employee or
1010 management company, or budgetary or financial records that
1011 indicate the compensation paid to an association employee.
1012 4. Medical records of unit owners.
1013 5. Social security numbers, driver license numbers, credit
1014 card numbers, e-mail addresses, telephone numbers, facsimile
1015 numbers, emergency contact information, addresses of a unit
1016 owner other than as provided to fulfill the association's notice
1017 requirements, and other personal identifying information of any
1018 person, excluding the person's name, unit designation, mailing
1019 address, property address, and any address, e-mail address, or
1020 facsimile number provided to the association to fulfill the
1021 association's notice requirements. Notwithstanding the
1022 restrictions in this subparagraph, an association may print and
1023 distribute to unit parcel owners a directory containing the
1024 name, unit parcel address, and all telephone numbers of each
1025 unit parcel owner. However, an owner may exclude his or her
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1026 telephone numbers from the directory by so requesting in writing
1027 to the association. An owner may consent in writing to the
1028 disclosure of other contact information described in this
1029 subparagraph. The association is not liable for the inadvertent
1030 disclosure of information that is protected under this
1031 subparagraph if the information is included in an official
1032 record of the association and is voluntarily provided by an
1033 owner and not requested by the association.
1034 6. Electronic security measures that are used by the
1035 association to safeguard data, including passwords.
1036 7. The software and operating system used by the
1037 association which allow the manipulation of data, even if the
1038 owner owns a copy of the same software used by the association.
1039 The data is part of the official records of the association.
1040 Section 11. Paragraph (b) of subsection (1) of section
1041 719.106, Florida Statutes, is amended, and subsection (3) is
1042 added to that section, to read:
1043 719.106 Bylaws; cooperative ownership.-
1044 (1) MANDATORY PROVISIONS.-The bylaws or other cooperative
1045 documents shall provide for the following, and if they do not,
1046 they shall be deemed to include the following:
1047 (b) Quorum; voting requirements; proxies.-
1048 1. Unless otherwise provided in the bylaws, the percentage
1049 of voting interests required to constitute a quorum at a meeting
1050 of the members shall be a majority of voting interests, and
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1051 decisions shall be made by owners of a majority of the voting
1052 interests. Unless otherwise provided in this chapter, or in the
1053 articles of incorporation, bylaws, or other cooperative
1054 documents, and except as provided in subparagraph (d)l.,
1055 decisions shall be made by owners of a majority of the voting
1056 interests represented at a meeting at which a quorum is present.
1057 2. Except as specifically otherwise provided herein, after
1058 January 1, 1992, unit owners may not vote by general proxy, but
1059 may vote by limited proxies substantially conforming to a
1060 limited proxy form adopted by the division. Limited proxies and
1061 general proxies may be used to establish a quorum. Limited
1062 proxies shall be used for votes taken to waive or reduce
1063 reserves in accordance with subparagraph (j)2., for votes taken
1064 to waive the financial reporting requirements of s.
1065 719. 104 ( 4) (b) , for votes taken to amend the articles of
1066 incorporation or bylaws pursuant to this section, and for any
1067 other matter for which this chapter requires or permits a vote
1068 of the unit owners. Except as provided in paragraph (d), after
1069 January 1, 1992, no proxy, limited or general, shall be used in
1070 the election of board members. General proxies may be used for
1071 other matters for which limited proxies are not required, and
1072 may also be used in voting for nonsubstantive changes to items
1073 for which a limited proxy is required and given. Notwithstanding
1074 the provisions of this section, unit owners may vote in person
1075 at unit owner meetings. Nothing contained herein shall limit the
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1076 use of general proxies or require the use of limited proxies or
1077 require the use of limited proxies for any agenda item or
1078 election at any meeting of a timeshare cooperative.
1079 3. Any proxy given shall be effective only for the
1080 specific meeting for which originally given and any lawfully
1081 adjourned meetings thereof. In no event shall any proxy be valid
1082 for a period longer than 90 days after the date of the first
1083 meeting for which it was given. Every proxy shall be revocable
1084 at any time at the pleasure of the unit owner executing it.
1085 4. A member of the board of administration or a committee
1086 may submit in writing his or her agreement or disagreement with
1087 any action taken at a meeting that the member did not attend.
1088 This agreement or disagreement may not be used as a vote for or
1089 against the action taken and may not be used for the purposes of
1090 creating a quorum.
1091 5. A board or committee member participating in a meeting
1092 via telephone, real-time video conferencing, or similar real-
1093 time electronic or video communication counts toward a quorum,
1094 and such member may vote as if physically present When some or
1095 all of the board or committee members meet by telephone
1096 conference, those board or committee members attending by
1097 telephone conference may be counted toward obtaining a quorum
1098 and may vote by telephone. A telephone speaker must shall be
1099 used utilized so that the conversation of such those board or
1100 committee members attending by telephone may be heard by the
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/HB 623 2020
1101 board or committee members attending in person, as well as by
1102 any unit owners present at a meeting.
1103 (3) GENERALLY.-Any provision of the declaration, the
1104 association bylaws, or reasonable rules or regulations of the
1105 association which diminish or infringe upon any right protected
1106 under the Fourteenth Amendment to the United States Constitution
1107 ors. 2, Art. I of the State Constitution is void and
1108 unenforceable without further action of the association. The
1109 association may record a notice in the public records of the
1110 county in which the cooperative is located evidencing its
1111 intention to not enforce such provision. The failure of the
1112 association to record a notice in the public record may not be
1113 the basis for liability or evidence of discrimination or a
1114 discriminatory intention.
1115 Section 12. Paragraph (1) of subsection (4) of section
1116 720.303, Florida Statutes, is redesignated as paragraph (m),
1117 paragraph (c) of subsection (2) is amended, and a new paragraph
1118 (1) is added to subsection (4) of that section, to read:
1119 720.303 Association powers and duties; meetings of board;
1120 official records; budgets; financial reporting; association
1121 funds; recalls.-
1122 (2) BOARD MEETINGS.-
1123 (c) The bylaws shall provide the following for giving
1124 notice to parcel owners and members of all board meetings and,
1125 if they do not do so, shall be deemed to include the following:
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CS/CS/HB 623 2020
1126 1. Notices of all board meetings must be posted in a
1127 conspicuous place in the community at least 48 hours in advance
1128 of a meeting, except in an emergency. In the alternative, if
1129 notice is not posted in a conspicuous place in the community,
1130 notice of each board meeting must be mailed or delivered to each
1131 member at least 7 days before the meeting, except in an
1132 emergency. Notwithstanding this general notice requirement, for
1133 communities with more than 100 members, the association bylaws
1134 may provide for a reasonable alternative to posting or mailing
1135 of notice for each board meeting, including publication of
1136 notice, provision of a schedule of board meetings, or the
1137 conspicuous posting and repeated broadcasting of the notice on a
1138 closed-circuit cable television system serving the homeowners'
1139 association. However, if broadcast notice is used in lieu of a
1140 notice posted physically in the community, the notice must be
1141 broadcast at least four times every broadcast hour of each day
1142 that a posted notice is otherwise required. When broadcast
1143 notice is provided, the notice and agenda must be broadcast in a
1144 manner and for a sufficient continuous length of time so as to
1145 allow an average reader to observe the notice and read and
1146 comprehend the entire content of the notice and the agenda. In
1147 addition to any of the authorized means of providing notice of a
1148 meeting of the board, the association may, by rule, adopt a
1149 procedure for conspicuously posting the meeting notice and the
1150 agenda on the association's website for at least the minimum
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CS/CS/HB 623 2020
1151 period of time for which a notice of a meeting is also required
1152 to be physically posted on the association property. Any rule
1153 adopted shall, in addition to other matters, include a
1154 requirement that the association send an electronic notice in
1155 the same manner as is required for a notice of a meeting of the
1156 members, which must include a hyperlink to the website where the
1157 notice is posted, to members whose e-mail addresses are included
1158 in the association's official records. The association may
1159 provide notice by electronic transmission in a manner authorized
1160 by law for meetings of the board of directors, committee
1161 meetings requiring notice under this section, and annual and
1162 special meetings of the members to any member who has provided a
1163 facsimile number or e-mail address to the association to be used
1164 for such purposes; however, a member must consent in writing to
1165 receiving notice by electronic transmission.
1166 2. An assessment may not be levied at a board meeting
1167 unless the notice of the meeting includes a statement that
1168 assessments will be considered and the nature of the
1169 assessments. Written notice of any meeting at which special
1170 assessments will be considered or at which amendments to rules
1171 regarding parcel use will be considered must be mailed,
1172 delivered, or electronically transmitted to the members and
1173 parcel owners and posted conspicuously on the property or
1174 broadcast on closed-circuit cable television not less than 14
1175 days before the meeting.
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1176 3. Directors may not vote by proxy or by secret ballot at
1177 board meetings, except that secret ballots may be used in the
1178 election of officers. This subsection also applies to the
1179 meetings of any committee or other similar body, when a final
1180 decision will be made regarding the expenditure of association
1181 funds, and to any body vested with the power to approve or
1182 disapprove architectural decisions with respect to a specific
1183 parcel of residential property owned by a member of the
1184 community.
1185 (4) OFFICIAL RECORDS.-The association shall maintain each
1186 of the following items, when applicable, which constitute the
1187 official records of the association:
1188 (1) Ballots, sign-in sheets, voting proxies, and all other
1189 papers and electronic records relating to voting by parcel
1190 owners, which must be maintained for at least 1 year after the
1191 date of the election, vote, or meeting.
1192 ~-f-±+ All other written records of the association not
1193 specifically included in this subsection the foregoing which are
1194 related to the operation of the association.
1195 Section 13. Subsections (1) and (2) of section 720.305,
1196 Florida Statutes, are amended to read:
1197 720.305 Obligations of members; remedies at law or in
1198 equity; levy of fines and suspension of use rights.-
1199 (1) Each member and the member's tenants, guests, and
1200 invitees, and each association, are governed by, and must comply
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CS/CS/HB 623 2020
1201 with, this chapter andT the governing documents of the
1202 community, and the rules of the association. Actions at law or
1203 in equity, or both, to redress alleged failure or refusal to
1204 comply with these provisions may be brought by the association
1205 or by any member against:
1206 (a) The association;
1207 (b) A member;
1208 (c) Any director or officer of an association who
1209 willfully and knowingly fails to comply with these provisions;
1210 and
1211 (d) Any tenants, guests, or invitees occupying a parcel or
1212 using the common areas.
1213
1214 The prevailing party in any such litigation is entitled to
1215 recover reasonable attorney fees and costs. A member prevailing
1216 in an action between the association and the member under this
1217 section, in addition to recovering his or her reasonable
1218 attorney fees, may recover additional amounts as determined by
1219 the court to be necessary to reimburse the member for his or her
1220 share of assessments levied by the association to fund its
1221 expenses of the litigation. This relief does not exclude other
1222 remedies provided by law. This section does not deprive any
1223 person of any other available right or remedy.
1224 (2) An .!ffte association may levy reasonable fines. A fine
1225 may not exceed $100 per violation against any member or any
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CS/CS/HB 623 2020
1226 member's tenant, guest, or invitee for the failure of the owner
1227 of the parcel or its occupant, licensee, or invitee to comply
1228 with any provision of the declaration, the association bylaws,
1229 or reasonable rules of the association unless otherwise provided
1230 in the governing documents. A fine may be levied by the board
1231 for each day of a continuing violation, with a single notice and
1232 opportunity for hearing, except that the fine may not exceed
1233 $1,000 in the aggregate unless otherwise provided in the
1234 governing documents. A fine of less than $1,000 may not become a
1235 lien against a parcel. In any action to recover a fine, the
1236 prevailing party is entitled to reasonable attorney fees and
1237 costs from the nonprevailing party as determined by the court.
1238 (a) An association may suspend, for a reasonable period of
1239 time, the right of a member, or a member's tenant, guest, or
1240 invitee, to use common areas and facilities for the failure of
1241 the owner of the parcel or its occupant, licensee, or invitee to
1242 comply with any provision of the declaration, the association
1243 bylaws, or reasonable rules of the association. This paragraph
1244 does not apply to that portion of common areas used to provide
1245 access or utility services to the parcel. A suspension may not
1246 prohibit an owner or tenant of a parcel from having vehicular
1247 and pedestrian ingress to and egress from the parcel, including,
1248 but not limited to, the right to park.
1249 (b) A fine or suspension levied by the board of
1250 administration may not be imposed unless the board first
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1251 provides at least 14 days' notice to the parcel owner and, if
1252 applicable, any occupant, licensee, or invitee of the parcel
1253 owner, sought to be fined or suspended and an opportunity for a
1254 hearing before a committee of at least three members appointed
1255 by the board who are not officers, directors, or employees of
1256 the association, or the spouse, parent, child, brother, or
1257 sister of an officer, director, or employee. If the committee,
1258 by majority vote, does not approve a proposed fine or
1259 suspension, the proposed fine or suspension may not be imposed.
1260 The role of the committee is limited to determining whether to
1261 confirm or reject the fine or suspension levied by the board. If
1262 the proposed fine or suspension levied by the board is approved
1263 by the committee, the fine payment is due 5 days after notice of
1264 the approved fine is provided to the parcel owner and, if
1265 applicable, to any occupant, licensee, or invitee of the parcel
1266 owner the date of the cofllfll.ittee meeting at which the fine is
1267 approved. The association must provide written notice of such
1268 fine or suspension by mail or hand delivery to the parcel owner
1269 and, if applicable, to any occupant tenant, licensee, or invitee
1270 of the parcel owner.
1271 Section 14. Paragraph (g) of subsection (1) of section
1272 720.306, Florida Statutes, is amended to read:
1273 720.306 Meetings of members; voting and election
1274 procedures; amendments.-
1275 (1) QUORUM; AMENDMENTS.-
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1276 (g) A notice required under this section must be mailed or
1277 delivered to the address identified as the parcel owner's
1278 mailing address in the official records of the association as
1279 required under s. 720.303(4) on the property appraiser's website
1280 for the county in which the parcel is located, or electronically
1281 transmitted in a manner authorized by the association if the
1282 parcel owner has consented, in writing, to receive notice by
1283 electronic transmission.
1284 Section 15. Subsection (6) is added to section 720.3075,
1285 Florida Statutes, to read:
1286 720.3075 Prohibited clauses in association documents.-
1287 (6) Any provision of the declaration, the association
1288 bylaws, or reasonable rules or regulations of the association
1289 which diminish or infringe upon any right protected under the
1290 Fourteenth Amendment to the United States Constitution ors. 2,
1291 Art. I of the State Constitution is void and unenforceable
1292 without further action of the association. The association may
1293 record a notice in the public records of the county in which the
1294 community is located evidencing its intention to not enforce
1295 such provision. The failure of the association to record a
1296 notice in the public record may not be the basis for liability
1297 or evidence of discrimination or a discriminatory intention.
1298 Section 16. This act shall take effect July 1, 2020.
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COMMERCE COMMITTEE
HB 623 by Rep. Shoaf
Community Associations
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Shoaf (Strike-all amendment):
The strike-all amendment:
• Increases the fee for transfer of a condominium from $100 to $150, and the fees shall be
adjusted every 5 years for inflation.
• Provides that any provision in any title transaction that violates any right under the 14th
Amendment of the U.S. Constitution or article I, section 2 of the Florida Constitution is
unenforceable, and any such provision in a previously recorded title transaction is
extinguished and severed from the recorded title transaction.
• Provides that an association board may, at the request of an owner, remove a restriction
that violates any right under the 14th Amendment of the U.S. Constitution or article I,
section 2 of the Florida Constitution.
• Allows a condominium developer to withdraw escrow funds from the sale of a
condominium unit for the costs incurred by the developer instead of the actual
construction costs to develop the condominium.
• Provides that if the governing documents of an HOA do not obligate a developer to
create reserve accounts or the HOA has not provided for reserve accounts by majority
vote, the HOA must include a statement on its financial reports.
• Repeals current law providing that if a developer initially funds a reserve account for an
HOA, the developer has created a reserve account, which must be funded unless
waived by the members.
• Requires condominiums to maintain official records in a manner determined by DBPR,
and allows DBPR to investigate complaints related to the maintenance of official records.
• Requires condominiums to provide a checklist to a unit owner who is requesting official
records.
• Defines the term "financial issue" and authorizes DBPR to investigate complaints related
to the financial issues of a condominium.
• Allows DBPR to adopt rules to establish requirements for certain training programs.
• Provides that the installation of a natural gas fuel station may not be the basis for filing a
lien against a condominium association, but it may be the basis for filing a lien against
the unit owner installing the station.
• Makes conforming changes to the Condominium Act, Cooperative Act, and the HOA Act
related to arbitration and mediation and DBPR's arbitration program.
• Provides that amendments to an HOA's governing documents related to the prohibition
or regulation of rentals only applies to owners consenting to the amendment or owners
who acquire a parcel after the effective date of the amendment. However, amendments
prohibiting or regulating rentals that are for less than six months or prohibiting or
regulating parcels that are rented more than three times in a calendar year apply to all
parcel owners.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Shoaf offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Paragraph (a) of subsection (2) of section
7 514.0115, Florida Statutes, is amended to read:
8 514.0115 Exemptions from supervision or regulation;
9 variances.-
10 (2) (a) Pools serving condominium, cooperative, and
11 homeowners' associations, as well as other property
12 associations, which have no more than 32 condominium or
13 cooperative units or parcels and which are not operated as a
14 public lodging establishments are establishment shall be exempt
15 from supervision under this chapter, except for water quality.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
16 Section 2. Subsection (4) of section 627.714, Florida
17 Statutes, is amended to read:
18 627.714 Residential condominium unit owner coverage; loss
19 assessment coverage required.-
20 (4) Every individual unit owner's residential property
21 policy must contain a provision stating that the coverage
22 afforded by such policy is excess coverage over the amount
23 recoverable under any other policy covering the same property.
24 If a condominium association's insurance policy does not provide
25 rights for subrogation against the unit owners in the
26 association, an insurance policy issued to an individual unit
27 owner located in the association may not provide rights of
28 subrogation against the condominium association.
29 Section 3. Section 712.065, Florida Statutes, is created
30 to read:
31 712.065 Extinguishment of discriminatory restrictions.-
32 (1) As used in this section, the term "discriminatory
33 restriction" means a provision in a title transaction recorded
34 in this state which restricts the ownership, occupancy, or use
35 of any real property in this state by any natural person on the
36 basis of a characteristic that has been held, or is held after
37 July 1, 2020, by the United States Supreme Court or the Florida
38 Supreme Court to be protected against discrimination under the
39 Fourteenth Amendment to the United States Constitution or under
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
40 s. 2, Art. I of the State Constitution, including race, color,
41 national origin, religion, gender, or physical disability.
42 (2) A discriminatory restriction is not enforceable in
43 this state, and all discriminatory restrictions contained in any
44 title transaction recorded in this state are unlawful, are
45 unenforceable, and are declared null and void. Any
46 discriminatory restriction contained in a previously recorded
47 title transaction is extinguished and severed from the recorded
48 title transaction and the remainder of the title transaction
49 remains enforceable and effective except for the severed
50 discriminatory restriction. The recording of any notice
51 preserving or protecting interests or rights pursuant to s.
52 712.05 does not reimpose or preserve any discriminatory
53 restriction that is extinguished under this section.
54 (3) Upon request of a parcel owner, a discriminatory
55 restriction appearing in a covenant or restriction affecting the
56 parcel may be removed from the covenant or restriction by an
57 amendment approved by a majority vote of the board of directors
58 of the respective property owners' association or an owners'
59 association in which all owners may voluntarily join,
60 notwithstanding any other requirements for approval of an
61 amendment of the covenant or restriction. Unless the amendment
62 also changes other provisions of the covenant or restriction,
63 the recording of an amendment removing a discriminatory
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
64 restriction does not constitute a title transaction occurring
65 after the root of title for purposes of s. 712.03(4).
66 Section 4. Paragraphs (a), (b), (c), (f) and (g) of
67 subsection (12) of section 718.111, Florida Statutes, are
68 amended to read:
69 718.111 The association.-
70 (12) OFFICIAL RECORDS.-
71 (a) From the inception of the association, the association
72 shall maintain each of the following items, if applicable, which
73 constitutes the official records of the association:
74 1. A copy of the plans, permits, warranties, and other
75 items provided by the developer under pursuant to s. 718.301(4).
76 2. A photocopy of the recorded declaration of condominium
77 of each condominium operated by the association and each
78 amendment to each declaration.
79 3. A photocopy of the recorded bylaws of the association
80 and each amendment to the bylaws.
81 4. A certified copy of the articles of incorporation of
82 the association, or other documents creating the association,
83 and each amendment thereto.
84 5. A copy of the current rules of the association.
85 6. A book or books that contain the minutes of all
86 meetings of the association, the board of administration, and
87 the unit owners.
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
88 7. A current roster of all unit owners and their mailing
89 addresses, unit identifications, voting certifications, and, if
90 known, telephone numbers. The association shall also maintain
91 the e-mail addresses and facsimile numbers of unit owners
92 consenting to receive notice by electronic transmission. Thee-
93 mail addresses and facsimile numbers are not accessible to unit
94 owners if consent to receive notice by electronic transmission
95 is not provided in accordance with sub-subparagraph (c)3.e.
96 However, the association is not liable for an inadvertent
97 disclosure of the e-mail address or facsimile number for
98 receiving electronic transmission of notices.
99 8. All current insurance policies of the association and
100 condominiums operated by the association.
101 9. A current copy of any management agreement, lease, or
102 other contract to which the association is a party or under
103 which the association or the unit owners have an obligation or
104 responsibility.
105 10. Bills of sale or transfer for all property owned by
106 the association.
107 11. Accounting records for the association and separate
108 accounting records for each condominium that the association
109 operates. Any person who knowingly or intentionally defaces or
110 destroys such records, or who knowingly or intentionally fails
111 to create or maintain such records, with the intent of causing
112 harm to the association or one or more of its members, is
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
113 personally subject to a civil penalty under s. 718.501(2) (d)
114 pursuant to s. 718.501(1) (d). The accounting records must
115 include, but are not limited to:
116 a. Accurate, itemized, and detailed records of all
117 receipts and expenditures.
118 b. A current account and a monthly, bimonthly, or
119 quarterly statement of the account for each unit designating the
120 name of the unit owner, the due date and amount of each
121 assessment, the amount paid on the account, and the balance due.
122 c. All audits, reviews, accounting statements, and
123 financial reports of the association or condominium.
124 d. All contracts for work to be performed. Bids for work
125 to be performed are also considered official records and must be
126 maintained by the association for at least 1 year after receipt
127 of the bid.
128 12. Ballots, sign-in sheets, voting proxies, and all other
129 papers and electronic records relating to voting by unit owners,
130 which must be maintained for 1 year from the date of the
131 election, vote, or meeting to which the document relates,
132 notwithstanding paragraph (b).
133 13. All rental records if the association is acting as
134 agent for the rental of condominium units.
135 14. A copy of the current question and answer sheet as
136 described ins. 718.504.
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
137 15. All other written records of the association not
138 specifically included in the foregoing which are related to the
139 operation of the association.
140 15.-1-6-.-- A copy of the inspection report as described ins.
141 718. 301 (4) (p).
142 16.-1--1-.- Bids for materials, equipment, or services.
143 17. All other written records of the association not
144 specifically included in subparagraphs 1.-16. which are related
145 to the operation of the association.
146 (b) The official records specified in subparagraphs (a)l.-
147 6. must be permanently maintained from the inception of the
148 association. Bids for work to be performed or for materials,
149 equipment, or services must be maintained for at least 1 year
150 after receipt of the bid. All other official records must be
151 maintained within the state for at least 7 years, unless
152 otherwise provided by general law. All official records must be
153 maintained in a manner and format determined by the division so
154 that the records are easily accessible for inspection. The
155 records of the association shall be made available to a unit
156 owner within 45 miles of the condominium property or within the
157 county in which the condominium property is located within 10
158 working days after receipt of a written request by the board or
159 its designee. However, such distance requirement does not apply
160 to an association governing a timeshare condominium. This
161 paragraph may be complied with by having a copy of the official
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
162 records of the association available for inspection or copying
163 on the condominium property or association property, or the
164 association may offer the option of making the records available
165 to a unit owner electronically via the Internet or by allowing
166 the records to be viewed in electronic format on a computer
167 screen and printed upon request. The association is not
168 responsible for the use or misuse of the information provided to
169 an association member or his or her authorized representative in
170 pursuant to the compliance with requirements of this chapter
171 unless the association has an affirmative duty not to disclose
172 such information under pursuant to this chapter.
173 (c)l. The official records of the association are open to
174 inspection by any association member or the authorized
175 representative of such member at all reasonable times. The right
176 to inspect the records includes the right to make or obtain
177 copies, at the reasonable expense, if any, of the member or
178 authorized representative of such member. A renter of a unit
179 only has a right to inspect and copy the declaration of
180 condominium and association's bylaws and rules. The association
181 must provide a checklist to the member or the authorized
182 representative of such member of all records that are made
183 available for inspection and copying in response to a written
184 request. If any of the association's official records are not
185 available, such records must be identified on the checklist
186 provided to the person requesting the records. The checklist
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
187 must be signed by a manager, licensed pursuant to chapter 468
188 who certifies that the checklist is accurate to the best of his
189 or her knowledge and belief, or the association must provide the
190 person requesting the records with a sworn affidavit attesting
191 to the veracity of the checklist and executed by the person
192 responding to the written request on behalf of the association.
193 The association must maintain a copy of the checklist and
194 affidavit for at least 7 years. Delivery of the checklist and,
195 if required, the sworn affidavit to the person requesting the
196 records creates a rebuttable presumption that the association
197 complied with this paragraph. The association may adopt
198 reasonable rules regarding the frequency, time, location,
199 notice, and manner of record inspections and copying, but may
200 not require a member to demonstrate any purpose or state any
201 reason for the inspection. The failure of an association to
202 provide the records within 10 working days after receipt of a
203 written request creates a rebuttable presumption that the
204 association willfully failed to comply with this paragraph. A
205 unit owner who is denied access to official records is entitled
206 to the actual damages or minimum damages for the association's
207 willful failure to comply. Minimum damages are $50 per calendar
208 day for up to 10 days, beginning on the 11th working day after
209 receipt of the written request. The failure to permit inspection
210 entitles any person prevailing in an enforcement action to
211 recover reasonable attorney fees from the person in control of
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212 the records who, directly or indirectly, knowingly denied access
213 to the records.
214 2. Any person who knowingly or intentionally defaces or
215 destroys accounting records that are required by this chapter to
216 be maintained during the period for which such records are
217 required to be maintained, or who knowingly or intentionally
218 fails to create or maintain accounting records that are required
219 to be created or maintained, with the intent of causing harm to
220 the association or one or more of its members, is personally
221 subject to a civil penalty under 718.501(2) (d) pursuant to s.
222 718. 501 (1) (d).
223 3. The association shall maintain an adequate number of
224 copies of the declaration, articles of incorporation, bylaws,
225 and rules, and all amendments to each of the foregoing, as well
226 as the question and answer sheet as described ins. 718.504 and
227 year-end financial information required under this section, on
228 the condominium property to ensure their availability to unit
229 owners and prospective purchasers, and may charge its actual
230 costs for preparing and furnishing these documents to those
231 requesting the documents. An association shall allow a member or
232 his or her authorized representative to use a portable device,
233 including a smartphone, tablet, portable scanner, or any other
234 technology capable of scanning or taking photographs, to make an
235 electronic copy of the official records in lieu of the
236 association's providing the member or his or her authorized
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237 representative with a copy of such records. The association may
238 not charge a member or his or her authorized representative for
239 the use of a portable device. Notwithstanding this paragraph,
240 the following records are not accessible to unit owners:
241 a. Any record protected by the lawyer-client privilege as
242 described ins. 90.502 and any record protected by the work-
243 product privilege, including a record prepared by an association
244 attorney or prepared at the attorney's express direction, which
245 reflects a mental impression, conclusion, litigation strategy,
246 or legal theory of the attorney or the association, and which
247 was prepared exclusively for civil or criminal litigation or for
248 adversarial administrative proceedings, or which was prepared in
249 anticipation of such litigation or proceedings until the
250 conclusion of the litigation or proceedings.
251 b. Information obtained by an association in connection
252 with the approval of the lease, sale, or other transfer of a
253 unit.
254 c. Personnel records of association or management company
255 employees, including, but not limited to, disciplinary, payroll,
256 health, and insurance records. For purposes of this sub-
257 subparagraph, the term ''personnel records" does not include
258 written employment agreements with an association employee or
259 management company, or budgetary or financial records that
260 indicate the compensation paid to an association employee.
261 d. Medical records of unit owners.
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262 e. Social security numbers, driver license numbers, credit
263 card numbers, e-mail addresses, telephone numbers, facsimile
264 numbers, emergency contact information, addresses of a unit
265 owner other than as provided to fulfill the association's notice
266 requirements, and other personal identifying information of any
267 person, excluding the person's name,· unit designation, mailing
268 address, property address, and any address, e-mail address, or
269 facsimile number provided to the association to fulfill the
270 association's notice requirements. Notwithstanding the
271 restrictions in this sub-subparagraph, an association may print
272 and distribute to unit parcel owners a directory containing the
273 name, unit parcel address, and all telephone numbers of each
274 unit parcel owner. However, an owner may exclude his or her
275 telephone numbers from the directory by so requesting in writing
276 to the association. An owner may consent in writing to the
277 disclosure of other contact information described in this sub-
278 subparagraph. The association is not liable for the inadvertent
279 disclosure of information that is protected under this sub-
280 subparagraph if the information is included in an official
281 record of the association and is voluntarily provided by an
282 owner and not requested by the association.
283 f. Electronic security measures that are used by the
284 association to safeguard data, including passwords.
285 g. The software and operating system used by the
286 association which allow the manipulation of data, even if the
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287 owner owns a copy of the same software used by the association.
288 The data is part of the official records of the association.
289 (f) An outgoing board or committee member must relinquish
290 all official records and property of the association in his or
291 her possession or under his or her control to the incoming board
292 within 5 days after the election. The division shall impose a
293 civil penalty as set forth ins. 718.501(2) (d)6. -s.-
294 718.501(1) (d)6. against an outgoing board or committee member
295 who willfully and knowingly fails to relinquish such records and
296 property.
297 (g)l. By January 1, 2019, an association managing a
298 condominium with 150 or more units which does not contain
299 timeshare units shall post digital copies of the documents
300 specified in subparagraph 2. on its website or make such
301 documents available through an application that can be
302 downloaded on a mobile device.
303 a. The association's website or application must be:
304 (I) An independent website, application, or web portal
305 wholly owned and operated by the association; or
306 (II) A website, application, or web portal operated by a
307 third-party provider with whom the association owns, leases,
308 rents, or otherwise obtains the right to operate a web page,
309 subpage, web portal, e-r collection of subpages or web portalsL
310 or application which is dedicated to the association's
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311 activities and on which required notices, records, and documents
312 may be posted or made available by the association.
313 b. The association's website or application must be
314 accessible through the Internet and must contain a subpage, web
315 portal, or other protected electronic location that is
316 inaccessible to the general public and accessible only to unit
317 owners and employees of the association.
318 c. Upon a unit owner's written request, the association
319 must provide the unit owner with a username and password and
320 access to the protected sections of the association's website or
321 application that contain any notices, records, or documents that
322 must be electronically provided.
323 2. A current copy of the following documents must be
324 posted in digital format on the association's website or
325 application:
326 a. The recorded declaration of condominium of each
327 condominium operated by the association and each amendment to
328 each declaration.
329 b. The recorded bylaws of the association and each
330 amendment to the bylaws.
331 c. The articles of incorporation of the association, or
332 other documents creating the association, and each amendment to
333 the articles of incorporation or other documents thereto. The
334 copy posted pursuant to this sub-subparagraph must be a copy of
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335 the articles of incorporation filed with the Department of
336 State.
337 d. The rules of the association.
338 e. A list of all executory contracts or documents to which
339 the association is a party or under which the association or the
340 unit owners have an obligation or responsibility and, after
341 bidding for the related materials, equipment, or services has
342 closed, a list of bids received by the association within the
343 past year. Summaries of bids for materials, equipment, or
344 services which exceed $500 must be maintained on the website or
345 application for 1 year. In lieu of summaries, complete copies of
346 the bids may be posted.
347 f. The annual budget required bys. 718.112(2) (f) and any
348 proposed budget to be considered at the annual meeting.
349 g. The financial report required by subsection (13) and
350 any monthly income or expense statement to be considered at a
351 meeting.
352 h. The certification of each director required bys.
353 718.112(2) (d)4.b.
354 i. All contracts or transactions between the association
355 and any director, officer, corporation, firm, or association
356 that is not an affiliated condominium association or any other
357 entity in which an association director is also a director or
358 officer and financially interested.
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359 j. Any contract or document regarding a conflict of
360 interest or possible conflict of interest as provided in ss.
361 468.436(2) (b)6. and 718.3027(3).
362 k. The notice of any unit owner meeting and the agenda for
363 the meeting, as required bys. 718.112(2) (d)3., no later than 14
364 days before the meeting. The notice must be posted in plain view
365 on the front page of the website or application, or on a
366 separate subpage of the website or application labeled ''Notices"
367 which is conspicuously visible and linked from the front page.
368 The association must also post on its website or application any
369 document to be considered and voted on by the owners during the
370 meeting or any document listed on the agenda at least 7 days
371 before the meeting at which the document or the information
372 within the document will be considered.
373 1. Notice of any board meeting, the agenda, and any other
374 document required for the meeting as required bys.
375 718.112(2) (c), which must be posted no later than the date
376 required for notice under pursuant to s. 718.112(2) (c).
377 3. The association shall ensure that the information and
378 records described in paragraph (c), which are not allowed to be
379 accessible to unit owners, are not posted on the association's
380 website or application. If protected information or information
381 restricted from being accessible to unit owners is included in
382 documents that are required to be posted on the association's
383 website or application, the association shall ensure the
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384 information is redacted before posting the documents online.
385 Notwithstanding the foregoing, the association or its agent is
386 not liable for disclosing information that is protected or
387 restricted under pursuant to this paragraph unless such
388 disclosure was made with a knowing or intentional disregard of
389 the protected or restricted nature of such information.
390 4. The failure of the association to post information
391 required under subparagraph 2. is not in and of itself
392 sufficient to invalidate any action or decision of the
393 association's board or its committees.
394 Section 5. Paragraphs (d), (i), (j), (k), and (p) of
395 subsection (2) of section 718.112, Florida Statutes, are
396 amended, and paragraph (c) is added to subsection (1) of that
397 section, to read:
398 718.112 Bylaws.-
399 (1) GENERALLY.-
400 (c) The association may extinguish a discriminatory
401 restriction, as defined ins. 712.065(1) pursuant to s. 712.065.
402 (2) REQUIRED PROVISIONS.-The bylaws shall provide for the
403 following and, if they do not do so, shall be deemed to include
404 the following:
405 (d) Unit owner meetings.-
406 l. An annual meeting of the unit owners must be held at
407 the location provided in the association bylaws and, if the
408 bylaws are silent as to the location, the meeting must be held
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409 within 45 miles of the condominium property. However, such
410 distance requirement does not apply to an association governing
411 a timeshare condominium.
412 2. Unless the bylaws provide otherwise, a vacancy on the
413 board caused by the expiration of a director's term must be
414 filled by electing a new board member, and the election must be
415 by secret ballot. An election is not required if the number of
416 vacancies equals or exceeds the number of candidates. For
417 purposes of this paragraph, the term ''candidate" means an
418 eligible person who has timely submitted the written notice, as
419 described in sub-subparagraph 4.a., of his or her intention to
420 become a candidate. Except in a timeshare or nonresidential
421 condominium, or if the staggered term of a board member does not
422 expire until a later annual meeting, or if all members' terms
423 would otherwise expire but there are no candidates, the terms of
424 all board members expire at the annual meeting, and such members
425 may stand for reelection unless prohibited by the bylaws. Board
426 members may serve terms longer than 1 year if permitted by the
427 bylaws or articles of incorporation. A board member may not
428 serve more than 8 consecutive years unless approved by an
429 affirmative vote of unit owners representing two-thirds of all
430 votes cast in the election or unless there are not enough
431 eligible candidates to fill the vacancies on the board at the
432 time of the vacancy. Only board service that occurs on or after
433 July 1, 2018, may be used when calculating a board member's term
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434 limit. If the number of board members whose terms expire at the
435 annual meeting equals or exceeds the number of candidates, the
436 candidates become members of the board effective upon the
437 adjournment of the annual meeting. Unless the bylaws provide
438 otherwise, any remaining vacancies shall be filled by the
439 affirmative vote of the majority of the directors making up the
440 newly constituted board even if the directors constitute less
441 than a quorum or there is only one director. In a residential
442 condominium association of more than 10 units or in a
443 residential condominium association that does not include
444 timeshare units or timeshare interests, co-owners of a unit may
445 not serve as members of the board of directors at the same time
446 unless they own more than one unit or unless there are not
447 enough eligible candidates to fill the vacancies on the board at
448 the time of the vacancy. A unit owner in a residential
449 condominium desiring to be a candidate for board membership must
450 comply with sub-subparagraph 4.a. and must be eligible to be a
451 candidate to serve on the board of directors at the time of the
452 deadline for submitting a notice of intent to run in order to
453 have his or her name listed as a proper candidate on the ballot
454 or to serve on the board. A person who has been suspended or
455 removed by the division under this chapter, or who is delinquent
456 in the payment of any monetary obligation due to the
457 association, is not eligible to be a candidate for board
458 membership and may not be listed on the ballot. A person who has
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459 been convicted of any felony in this state or in a United States
460 District or Territorial Court, or who has been convicted of any
461 offense in another jurisdiction which would be considered a
462 felony if committed in this state, is not eligible for board
463 membership unless such felon's civil rights have been restored
464 for at least 5 years as of the date such person seeks election
465 to the board. The validity of an action by the board is not
466 affected if it is later determined that a board member is
467 ineligible for board membership due to having been convicted of
468 a felony. This subparagraph does not limit the term of a member
469 of the board of a nonresidential or timeshare condominium.
470 3. The bylaws must provide the method of calling meetings
471 of unit owners, including annual meetings. Written notice of an
472 annual meeting must include an agenda~, must be mailed, hand
473 delivered, or electronically transmitted to each unit owner at
474 least 14 days before the annual meeting~, and rn-u-s-t- be posted in
475 a conspicuous place on the condominium property at least 14
476 continuous days before the annual meeting. Written notice of a
477 meeting other than an annual meeting must include an agenda; be
478 mailed, hand delivered, or electronically transmitted to each
479 unit owner; and be posted in a conspicuous place on the
480 condominium property in accordance with the minimum period of
481 time for posting a notice as set forth in the bylaws, and if the
482 bylaws do not provide such notice requirements, then at least 14
483 continuous days before the meeting. Upon notice to the unit
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484 owners, the board shall, by duly adopted rule, designate a
485 specific location on the condominium property where all notices
486 of unit owner meetings must be posted. This requirement does not
487 apply if there is no condominium property for posting notices.
488 In lieu of, or in addition to, the physical posting of meeting
489 notices, the association may, by reasonable rule, adopt a
490 procedure for conspicuously posting and repeatedly broadcasting
491 the notice and the agenda on a closed-circuit cable television
492 system serving the condominium association. However, if
493 broadcast notice is used in lieu of a notice posted physically
494 on the condominium property, the notice and agenda must be
495 broadcast at least four times every broadcast hour of each day
496 that a posted notice is otherwise required under this section.
497 If broadcast notice is provided, the notice and agenda must be
498 broadcast in a manner and for a sufficient continuous length of
499 time so as to allow an average reader to observe the notice and
500 read and comprehend the entire content of the notice and the
501 agenda. In addition to any of the authorized means of providing
502 notice of a meeting of the board, the association may, by rule,
503 adopt a procedure for conspicuously posting the meeting notice
504 and the agenda on a website serving the condominium association
505 for at least the minimum period of time for which a notice of a
506 meeting is also required to be physically posted on the
507 condominium property. Any rule adopted shall, in addition to
508 other matters, include a requirement that the association send
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509 an electronic notice in the same manner as a notice for a
510 meeting of the members, which must include a hyperlink to the
511 website where the notice is posted, to unit owners whose e-mail
512 addresses are included in the association's official records.
513 Unless a unit owner waives in writing the right to receive
514 notice of the annual meeting, such notice must be hand
515 delivered, mailed, or electronically transmitted to each unit
516 owner. Notice for meetings and notice for all other purposes
517 must be mailed to each unit owner at the address last furnished
518 to the association by the unit owner, or hand delivered to each
519 unit owner. However, if a unit is owned by more than one person,
520 the association must provide notice to the address that the
521 developer identifies for that purpose and thereafter as one or
522 more of the owners of the unit advise the association in
523 writing, or if no address is given or the owners of the unit do
524 not agree, to the address provided on the deed of record. An
525 officer of the association, or the manager or other person
526 providing notice of the association meeting, must provide an
527 affidavit or United States Postal Service certificate of
528 mailing, to be included in the official records of the
529 association affirming that the notice was mailed or hand
530 delivered in accordance with this provision.
531 4. The members of the board of a residential condominium
532 shall be elected by written ballot or voting machine. Proxies
533 may not be used in electing the board in general elections or
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534 elections to fill vacancies caused by recall, resignation, or
535 otherwise, unless otherwise provided in this chapter. This
536 subparagraph does not apply to an association governing a
537 timeshare condominium.
538 a. At least 60 days before a scheduled election, the
539 association shall mail, deliver, or electronically transmit, by
540 separate association mailing or included in another association
541 mailing, delivery, or transmission, including regularly
542 published newsletters, to each unit owner entitled to a vote, a
543 first notice of the date of the election. A unit owner or other
544 eligible person desiring to be a candidate for the board must
545 give written notice of his or her intent to be a candidate to
546 the association at least 40 days before a scheduled election.
547 Together with the written notice and agenda as set forth in
548 subparagraph 3., the association shall mail, deliver, or
549 electronically transmit a second notice of the election to all
550 unit owners entitled to vote, together with a ballot that lists
551 all candidates not less than 14 days or more than 34 days before
552 the date of the election. Upon request of a candidate, an
553 information sheet, no larger than 8 1/2 inches by 11 inches,
554 which must be furnished by the candidate at least 35 days before
555 the election, must be included with the mailing, delivery, or
556 transmission of the ballot, with the costs of mailing, delivery,
557 or electronic transmission and copying to be borne by the
558 association. The association is not liable for the contents of
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559 the information sheets prepared by the candidates. In order to
560 reduce costs, the association may print or duplicate the
561 information sheets on both sides of the paper. The division
562 shall by rule establish voting procedures consistent with this
563 sub-subparagraph, including rules establishing procedures for
564 giving notice by electronic transmission and rules providing for
565 the secrecy of ballots. Elections shall be decided by a
566 plurality of ballots cast. There is no quorum requirement;
567 however, at least 20 percent of the eligible voters must cast a
568 ballot in order to have a valid election. A unit owner may not
569 authorize any other person to vote his or her ballot, and any
570 ballots improperly cast are invalid. A unit owner who violates
571 this provision may be fined by the association in accordance
572 withs. 718.303. A unit owner who needs assistance in casting
573 the ballot for the reasons stated ins. 101.051 may obtain such
574 assistance. The regular election must occur on the date of the
575 annual meeting. Notwithstanding this sub-subparagraph, an
576 election is not required unless more candidates file notices of
577 intent to run or are nominated than board vacancies exist.
578 b. Within 90 days after being elected or appointed to the
579 board of an association of a residential condominium, each newly
580 elected or appointed director shall certify in writing to the
581 secretary of the association that he or she has read the
582 association's declaration of condominium, articles of
583 incorporation, bylaws, and current written policies; that he or
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584 she will work to uphold such documents and policies to the best
585 of his or her ability; and that he or she will faithfully
586 discharge his or her fiduciary responsibility to the
587 association's members. In lieu of this written certification,
588 within 90 days after being elected or appointed to the board,
589 the newly elected or appointed director may submit a certificate
590 of having satisfactorily completed the educational curriculum
591 administered by a division-approved condominium education
592 provider within 1 year before or 90 days after the date of
593 election or appointment. The written certification or
594 educational certificate is valid and does not have to be
595 resubmitted as long as the director serves on the board without
596 interruption. A director of an association of a residential
597 condominium who fails to timely file the written certification
598 or educational certificate is suspended from service on the
599 board until he or she complies with this sub-subparagraph. The
600 board may temporarily fill the vacancy during the period of
601 suspension. The secretary shall cause the association to retain
602 a director's written certification or educational certificate
603 for inspection by the members for 5 years after a director's
604 election or the duration of the director's uninterrupted tenure,
605 whichever is longer. Failure to have such written certification
606 or educational certificate on file does not affect the validity
607 of any board action.
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608 c. Any challenge to the election process must be commenced
609 within 60 days after the election results are announced.
610 5. Any approval by unit owners called for by this chapter
611 or the applicable declaration or bylaws, including, but not
612 limited to, the approval requirement ins. 718.111(8), must be
613 made at a duly noticed meeting of unit owners and is subject to
614 all requirements of this chapter or the applicable condominium
615 documents relating to unit owner decisionmaking, except that
616 unit owners may take action by written agreement, without
617 meetings, on matters for which action by written agreement
618 without meetings is expressly allowed by the applicable bylaws
619 or declaration or any law that provides for such action.
620 6. Unit owners may waive notice of specific meetings if
621 allowed by the applicable bylaws or declaration or any law.
622 Notice of meetings of the board of administration, unit owner
623 meetings, except unit owner meetings called to recall board
624 members under paragraph (j), and committee meetings may be given
625 by electronic transmission to unit owners who consent to receive
626 notice by electronic transmission. A unit owner who consents to
627 receiving notices by electronic transmission is solely
628 responsible for removing or bypassing filters that block receipt
629 of mass e-mails emails sent to members on behalf of the
630 association in the course of giving electronic notices.
631 7. Unit owners have the right to participate in meetings
632 of unit owners with reference to all designated agenda items.
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633 However, the association may adopt reasonable rules governing
634 the frequency, duration, and manner of unit owner participation.
635 8. A unit owner may tape record or videotape a meeting of
636 the unit owners subject to reasonable rules adopted by the
637 division.
638 9. Unless otherwise provided in the bylaws, any vacancy
639 occurring on the board before the expiration of a term may be
640 filled by the affirmative vote of the majority of the remaining
641 directors, even if the remaining directors constitute less than
642 a quorum, or by the sole remaining director. In the alternative,
643 a board may hold an election to fill the vacancy, in which case
644 the election procedures must conform to sub-subparagraph 4.a.
645 unless the association governs 10 units or fewer and has opted
646 out of the statutory election process, in which case the bylaws
647 of the association control. Unless otherwise provided in the
648 bylaws, a board member appointed or elected under this section
649 shall fill the vacancy for the unexpired term of the seat being
650 filled. Filling vacancies created by recall is governed by
651 paragraph (j) and rules adopted by the division.
652 10. This chapter does not limit the use of general or
653 limited proxies, require the use of general or limited proxies,
654 or require the use of a written ballot or voting machine for any
655 agenda item or election at any meeting of a timeshare
656 condominium association or nonresidential condominium
657 association.
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658
659 Notwithstanding subparagraph (b)2. and sub-subparagraph 4.a., an
660 association of 10 or fewer units may, by affirmative vote of a
661 majority of the total voting interests, provide for different
662 voting and election procedures in its bylaws, which may be by a
663 proxy specifically delineating the different voting and election
664 procedures. The different voting and election procedures may
665 provide for elections to be conducted by limited or general
666 proxy.
667 (i) Transfer fees.-No charge shall be made by the
668 association or any body thereof in connection with the sale,
669 mortgage, lease, sublease, or other transfer of a unit unless
670 the association is required to approve such transfer and a fee
671 for such approval is provided for in the declaration, articles,
672 or bylaws. Any such fee may be preset, but in no event may such
673 fee exceed $150-$-±-&& per applicant other than husband/wife or
674 parent/dependent child, which are considered one applicant.
675 However, if the lease or sublease is a renewal of a lease or
676 sublease with the same lessee or sublessee, no charge shall be
677 made. The fees specified in this subsection shall be adjusted
678 every 5 years in an amount equal to the total of the annual
679 increases for that 5-year period in the Consumer Price Index for
680 All Urban Consumers, U.S. City Average, All Items. The
681 Department of Business and Professional Regulation shall
682 periodically calculate the fees, rounded to the nearest dollar,
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Amendment No. 1
683 and publish the amounts, as adjusted, on its website. The
684 foregoing notwithstanding, an association may, if the authority
685 to do so appears in the declaration, articles, or bylaws,
686 require that a prospective lessee place a security deposit, in
687 an amount not to exceed the equivalent of 1 month's rent, into
688 an escrow account maintained by the association. The security
689 deposit shall protect against damages to the common elements or
690 association property. Payment of interest, claims against the
691 deposit, refunds, and disputes under this paragraph shall be
692 handled in the same fashion as provided in part II of chapter
693 83.
694 (j) Recall of board members.-Subject to s. 718.301, any
695 member of the board of administration may be recalled and
696 removed from office with or without cause by the vote or
697 agreement in writing by a majority of all the voting interests.
698 A special meeting of the unit owners to recall a member or
699 members of the board of administration may be called by 10
700 percent of the voting interests giving notice of the meeting as
701 required for a meeting of unit owners, and the notice shall
702 state the purpose of the meeting. Electronic transmission may
703 not be used as a method of giving notice of a meeting called in
704 whole or in part for this purpose.
705 1. If the recall is approved by a majority of all voting
706 interests by a vote at a meeting, the recall will be effective
707 as provided in this paragraph. The board shall duly notice and
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Amendment No. 1
708 hold a board meeting within 5 full business days after the
709 adjournment of the unit owner meeting to recall one or more
710 board members. Such member or members shall be recalled
711 effective immediately upon conclusion of the board meeting,
712 provided that the recall is facially valid. A recalled member
713 must turn over to the board, within 10 full business days after
714 the vote, any and all records and property of the association in
715 their possession.
716 2. If the proposed recall is by an agreement in writing by
717 a majority of all voting interests, the agreement in writing or
718 a copy thereof shall be served on the association by certified
719 mail or by personal service in the manner authorized by chapter
720 48 and the Florida Rules of Civil Procedure. The board of
721 administration shall duly notice and hold a meeting of the board
722 within 5 full business days after receipt of the agreement in
723 writing. Such member or members shall be recalled effective
724 immediately upon the conclusion of the board meeting, provided
725 that the recall is facially valid. A recalled member must turn
726 over to the board, within 10 full business days, any and all
727 records and property of the association in their possession.
728 3. If the board fails to duly notice and hold a board
729 meeting within 5 full business days after service of an
730 agreement in writing or within 5 full business days after the
731 adjournment of the unit owner recall meeting, the recall shall
732 be deemed effective and the board members so recalled shall turn
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Amendment No. 1
733 over to the board within 10 full business days after the vote
734 any and all records and property of the association.
735 4. If the board fails to duly notice and hold the required
736 meeting or at the conclusion of the meeting determines that the
737 recall is not facially valid, the unit owner representative may
738 file a petition or action pursuant to s. 718.1255 challenging
739 the board's failure to act or challenging the board's
740 determination on facial validity. The petition or action must be
741 filed within 60 days after the expiration of the applicable 5-
742 full-business-day period. The review of a petition or action
743 under this subparagraph is limited to the sufficiency of service
744 on the board and the facial validity of the written agreement or
745 ballots filed.
746 5. If a vacancy occurs on the board as a result of a
747 recall or removal and less than a majority of the board members
748 are removed, the vacancy may be filled by the affirmative vote
749 of a majority of the remaining directors, notwithstanding any
750 provision to the contrary contained in this subsection. If
751 vacancies occur on the board as a result of a recall and a
752 majority or more of the board members are removed, the vacancies
753 shall be filled in accordance with procedural rules to be
754 adopted by the division, which rules need not be consistent with
755 this subsection. The rules must provide procedures governing the
756 conduct of the recall election as well as the operation of the
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Amendment No. 1
757 association during the period after a recall but before the
758 recall election.
759 6. A board member who has been recalled may file a
760 petition or action pursuant to s. 718.1255 challenging the
761 validity of the recall. The petition or action must be filed
762 within 60 days after the recall. The association and the unit
763 owner representative shall be named as the respondents. The
764 petition or action may challenge the facial validity of the
765 written agreement or ballots filed or the substantial compliance
766 with the procedural requirements for the recall. If the
767 arbitrator or court determines the recall was invalid, the
768 petitioning board member shall immediately be reinstated and the
769 recall is null and void. A board member who is successful in
770 challenging a recall is entitled to recover reasonable attorney
771 fees and costs from the respondents. The arbitrator or court may
772 award reasonable attorney fees and costs to the respondents if
773 they prevail, if the arbitrator or court makes a finding that
774 the petitioner's claim is frivolous.
775 7. The division or a court of competent jurisdiction may
776 not accept for filing a recall petition or action, whether filed
777 pursuant to subparagraph 1., subparagraph 2., subparagraph 4.,
778 or subparagraph 6. when there are 60 or fewer days until the
779 scheduled reelection of the board member sought to be recalled
780 or when 60 or fewer days have elapsed since the election of the
781 board member sought to be recalled.
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Amendment No. 1
782 (k) Alternative Dispute Resolution Arbitration.- There
783 must shall be a provision for mandatory alternative dispute
784 resolution nonbinding arbitration as provided for ins. 718.1255
785 for any residential condominium.
786 (p) Service providers; conflicts of interest. ~n
787 association, which is not a timeshare condominium association,
788 may not employ or contract with any service provider that is
789 owned or operated by a board member or with any person who has a
790 financial relationship with a board member or officer, or a
791 relative within the third degree of consanguinity by blood or
7 92 marriage of a board member or officer. This paragraph does not
793 apply to a service provider in ',vhich a board member or officer,
7 94 or a relative within the third degree of consanguinity by blood
795 or marriage of a board member or officer, owns less than 1
796 percent of the equity shares.
7 97 Section 6. Subsection (8) of section 718.113, Florida
7 98 Statutes, is amended to read:
799 718.113 Maintenance; limitation upon improvement; display
800 of flag; hurricane shutters and protection; display of religious
801 decorations.-
802 (8) The Legislature finds that the use of electric and
803 natural gas fuel vehicles conserves and protects the state's
804 environmental resources, provides significant economic savings
805 to drivers, and serves an important public interest. The
806 participation of condominium associations is essential to the
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Amendment No. 1
807 state's efforts to conserve and protect the state's
808 environmental resources and provide economic savings to drivers.
809 For purposes of this subsection, the term "natural gas fuel" has
810 the same meaning as ins. 206.9951, and the term "natural gas
811 fuel vehicle" means any motor vehicle, as defined ins. 320.01,
812 that is powered by natural gas fuel. Therefore, the installation
813 of an electric vehicle charging station or natural gas fuel
814 station shall be governed as follows:
815 (a) A declaration of condominium or restrictive covenant
816 may not prohibit or be enforced so as to prohibit any unit owner
817 from installing an electric vehicle charging station or natural
818 gas fuel station within the boundaries of the unit owner's
819 limited common element or exclusively designated parking area.
820 The board of administration of a condominium association may not
821 prohibit a unit owner from installing an electric vehicle
822 charging station for an electric vehicle, as defined ins.
823 320.01, or a natural gas fuel station for a natural gas fuel
824 vehicle within the boundaries of his or her limited common
825 element or exclusively designated parking area. The installation
826 of such charging or fuel stations are subject to the provisions
827 of this subsection.
828 (b) The installation may not cause irreparable damage to
829 the condominium property.
830 (c) The electricity for the electric vehicle charging
831 station or natural gas fuel station must be separately metered
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Amendment No. 1
832 or metered by an embedded meter and payable by the unit owner
833 installing such charging or fuel station or by his or her
834 successor.
835 (d} The cost for supply and storage of the natural gas
836 fuel must be paid by the unit owner installing the natural gas
837 fuel station or by his or her successor.
838 (e)-fe+ The unit owner who is installing an electric
839 vehicle charging station or natural gas fuel station is
840 responsible for the costs of installation, operation,
841 maintenance, and repair, including, but not limited to, hazard
842 and liability insurance. The association may enforce payment of
843 such costs under pursuant to s. 718.116.
844 (f)-fet If the unit owner or his or her successor decides
845 there is no longer a need for the electronic vehicle charging
846 station or natural gas fuel station, such person is responsible
847 for the cost of removal of such the electronic vehicle charging
848 or fuel station. The association may enforce payment of such
849 costs under pursuant to s. 718.116.
850 (g) The unit owner installing, maintaining, or removing
851 the electric vehicle charging station or natural gas fuel
852 station is responsible for complying with all federal, state, or
853 local laws and regulations applicable to such installation,
854 maintenance, or removal.
855 J..bl-tf+ The association may require the unit owner to:
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Amendment No. 1
856 1. Comply with bona fide safety requirements, consistent
857 with applicable building codes or recognized safety standards,
858 for the protection of persons and property.
859 2. Comply with reasonable architectural standards adopted
860 by the association that govern the dimensions, placement, or
861 external appearance of the electric vehicle charging station or
862 natural gas fuel station, provided that such standards may not
863 prohibit the installation of such charging or fuel station or
864 substantially increase the cost thereof.
865 3. Engage the services of a licensed and registered firm
866 electrical contractor or engineer familiar with the installation
867 or removal and core requirements of an electric vehicle charging
868 station or natural gas fuel station.
869 4. Provide a certificate of insurance naming the
870 association as an additional insured on the owner's insurance
871 policy for any claim related to the installation, maintenance,
872 or use of the electric vehicle charging station or natural gas
873 fuel station within 14 days after receiving the association's
874 approval to install such charging or fuel station or notice to
875 provide such a certificate.
876 5. Reimburse the association for the actual cost of any
877 increased insurance premium amount attributable to the electric
878 vehicle charging station or natural gas fuel station within 14
879 days after receiving the association's insurance premium
880 invoice.
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881 J.jJ_+J+- The association provides an implied easement across
882 the common elements of the condominium property to the unit
883 owner for purposes of the installation of the electric vehicle
884 charging station or natural gas fuel station installation, and
885 the furnishing of electrical power or natural gas fuel supply,
886 including any necessary equipment, to such charging or fuel
887 station, subject to the requirements of this subsection.
888 Section 7. Subsection (16) of section 718.117, Florida
889 Statutes, is amended to read:
890 718.117 Termination of condominium.-
891 (16) RIGHT TO CONTEST.-A unit owner or lienor may contest
892 a plan of termination by initiating a petition in accordance
893 with for mandatory nonbinding arbitration pursuant to s.
894 718.1255 within 90 days after the date the plan is recorded. A
895 unit owner or lienor may only contest the fairness and
896 reasonableness of the apportionment of the proceeds from the
897 sale among the unit owners, that the liens of the first
898 mortgages of unit owners other than the bulk owner have not or
899 will not be satisfied to the extent required by subsection (3),
900 or that the required vote to approve the plan was not obtained.
901 A unit owner or lienor who does not contest the plan within the
902 90-day period is barred from asserting or prosecuting a claim
903 against the association, the termination trustee, any unit
904 owner, or any successor in interest to the condominium property.
905 In an action contesting a plan of termination, the person
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Amendment No. 1
906 contesting the plan has the burden of pleading and proving that
907 the apportionment of the proceeds from the sale among the unit
908 owners was not fair and reasonable or that the required vote was
909 not obtained. The apportionment of sale proceeds is presumed
910 fair and reasonable if it was determined pursuant to the methods
911 prescribed in subsection (12). If the petition is filed with the
912 division for arbitration, the arbitrator shall determine the
913 rights and interests of the parties in the apportionment of the
914 sale proceeds. If the arbitrator determines that the
915 apportionment of sales proceeds is not fair and reasonable, the
916 arbitrator may void the plan or may modify the plan to apportion
917 the proceeds in a fair and reasonable manner pursuant to this
918 section based upon the proceedings and order the modified plan
919 of termination to be implemented. If the arbitrator determines
920 that the plan was not properly approved, or that the procedures
921 to adopt the plan were not properly followed, the arbitrator may
922 void the plan or grant other relief it deems just and proper.
923 The arbitrator shall automatically void the plan upon a finding
924 that any of the disclosures required in subparagraph (3) (c)5.
925 are omitted, misleading, incomplete, or inaccurate. Any
926 challenge to a plan, other than a challenge that the required
927 vote was not obtained, does not affect title to the condominium
928 property or the vesting of the condominium property in the
929 trustee, but shall only be a claim against the proceeds of the
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Amendment No. 1
930 plan. In any such action, the prevailing party shall recover
931 reasonable attorney fees and costs.
932 Section 8. Subsection (2) of section 718.121, Florida
933 Statutes, is amended to read:
934 718.121 Liens.-
935 (2) Labor performed on or materials furnished to a unit
936 shall not be the basis for the filing of a lien pursuant to part
937 I of chapter 713, the Construction Lien Law, against the unit or
938 condominium parcel of any unit owner not expressly consenting to
939 or requesting the labor or materials. Labor performed on or
940 materials furnished for the installation of a natural gas fuel
941 station or an electronic vehicle charging station pursuant to s.
942 718.113(8) may not be the basis for filing a lien under part I
943 of chapter 713 against the association, but such a lien may be
944 filed against the unit owner. Labor performed on or materials
945 furnished to the common elements are not the basis for a lien on
946 the common elements, but if authorized by the association, the
947 labor or materials are deemed to be performed or furnished with
948 the express consent of each unit owner and may be the basis for
949 the filing of a lien against all condominium parcels in the
950 proportions for which the owners are liable for common expenses.
951 Section 9. Subsections (5) and (6) of section 718.1255,
952 Florida Statutes, are renumbered as subsections (6) and (7),
953 respectively, paragraph (a) of subsection (4) of that section is
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Amendment No. 1
954 amended, and a new subsection (5) is added to that section, to
955 read:
956 718.1255 Alternative dispute resolution; voluntary
957 mediation; mandatory nonbinding arbitration; legislative
958 findings.-
959 ( 4) HZ'1HD.7'1TORY NONBINDING ARBITRATION AND MEDIATION OF
960 DISPUTES.-The Division of Florida Condominiums, Timeshares, and
961 Mobile Homes of the Department of Business and Professional
962 Regulation may employ full-time attorneys to act as arbitrators
963 to conduct the arbitration hearings provided by this chapter.
964 The division may also certify attorneys who are not employed by
965 the division to act as arbitrators to conduct the arbitration
966 hearings provided by this chapter.~ fte person may not be
967 employed by the department as a full-time arbitrator unless he
968 or she is a member in good standing of The Florida Bar. A person
969 may only be certified by the division to act as an arbitrator if
970 he or she has been a member in good standing of The Florida Bar
971 for at least 5 years and has mediated or arbitrated at least 10
972 disputes involving condominiums in this state during the 3 years
973 immediately preceding the date of application, mediated or
974 arbitrated at least 30 disputes in any subject area in this
97 5 state during the 3 years immediately preceding the date of
97 6 application, or attained board certification in real estate law
977 or condominium and planned development law from The Florida Bar.
978 Arbitrator certification is valid for 1 year. An arbitrator who
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Amendment No. 1
979 does not maintain the minimum qualifications for initial
980 certification may not have his or her certification renewed. The
981 department may not enter into a legal services contract for an
982 arbitration hearing under this chapter with an attorney who is
983 not a certified arbitrator unless a certified arbitrator is not
984 available within 50 miles of the dispute. The department shall
985 adopt rules of procedure to govern such arbitration hearings
986 including mediation incident thereto. The decision of an
987 arbitrator is shall be final; however, a decision is shall not
988 be deemed final agency action. Nothing in this provision shall
989 be construed to foreclose parties from proceeding in a trial de
990 novo unless the parties have agreed that the arbitration is
991 binding. If judicial proceedings are initiated, the final
992 decision of the arbitrator is shall be admissible in evidence in
993 the trial de nova.
994 (a) Before Prior to the institution of court litigation, a
995 party to a dispute shall either petition the division for
996 nonbinding arbitration or initiate presuit mediation as provided
997 in subsection (5). Arbitration is binding on the parties if all
998 parties in arbitration agree to be bound in a writing filed in
999 arbitration. The petition must be accompanied by a filing fee in
1000 the amount of $50. Filing fees collected under this section must
1001 be used to defray the expenses of the alternative dispute
1002 resolution program.
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Bill No. CS/CS/HB 62 3 ( 2 02 0)
Amendment No. 1
1003 (5) PRESUIT MEDIATION.-In lieu of the initiation of
1004 nonbinding arbitration as set forth in subsections (1)-(4), a
1005 party may submit a dispute to presuit mediation in accordance
1006 withs. 720.311. Election and recall disputes are not eligible
1007 for mediation and such disputes must be arbitrated by the
1008 division or filed with a court of competent jurisdiction.
1009 Section 10. Subsection (3) of section 718.202, Florida
1010 Statutes, is amended to read:
1011 718.202 Sales or reservation deposits prior to closing.-
1012 (3) If the contract for sale of the condominium unit so
1013 provides, the developer may withdraw escrow funds in excess of
1014 10 percent of the purchase price from the special account
1015 required by subsection (2) when the construction of improvements
1016 has begun. He or she may use the funds for the actual costs
1017 incurred by the developer in the actual construction and
1018 development of the condominium property in which the unit to be
1019 sold is located. Actual costs include, but are not limited to,
1020 expenditures for demolition, site clearing, permit fees, impact
1021 fees, and utility reservation fees, as well as architectural,
1022 engineering, and surveying fees that directly relate to
1023 construction and development. However, no part of these funds
1024 may be used for salaries, commissions, or expenses of
1025 salespersons~ e-r for advertising, marketing, or promotional
1026 purposes; or for loan fees, costs or interest, attorney fees,
1027 accounting fees, or insurance. A contract which permits use of
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1028 the advance payments for these purposes shall include the
1029 following legend conspicuously printed or stamped in boldfaced
1030 type on the first page of the contract and immediately above the
1031 place for the signature of the buyer: ANY PAYMENT IN EXCESS OF
1032 10 PERCENT OF THE PURCHASE PRICE MADE TO DEVELOPER PRIOR TO
1033 CLOSING PURSUANT TO THIS CONTRACT MAY BE USED FOR CONSTRUCTION
1034 PURPOSES BY THE DEVELOPER.
1035 Section 11. Subsection (1) and paragraph (b) of subsection
1036 (3) of section 718.303, Florida Statutes, are amended to read:
1037 718.303 Obligations of owners and occupants; remedies.-
1038 (1) Each unit owner, ea€ft tenant and other invitee, and
1039 ea€ft association is governed by, and must comply with the
1040 provisions of, this chapter, the declaration, the documents
1041 creating the association, and the association bylaws which are
1042 shall be deemed expressly incorporated into any lease of a unit.
1043 Actions at law or in equity for damages or for injunctive
1044 relief, or both, for failure to comply with these provisions may
1045 be brought by the association or by a unit owner against:
1046 (a) The association.
1047 (b) A unit owner.
1048 (c) Directors designated by the developer, for actions
1049 taken by them before control of the association is assumed by
1050 unit owners other than the developer.
1051 (d) Any director who willfully and knowingly fails to
1052 comply with these provisions.
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Amendment No. 1
1053 (e) Any tenant leasing a unit, and any other invitee
1054 occupying a unit.
1055
1056 The prevailing party in any such action or in any action in
1057 which the purchaser claims a right of voidability based upon
1058 contractual provisions as required ins. 718.503(1) (a) is
1059 entitled to recover reasonable attorney attorney's fees. A unit
1060 owner prevailing in an action between the association and the
1061 unit owner under this subsection section, in addition to
1062 recovering his or her reasonable attorney attorney's fees, may
1063 recover additional amounts as determined by the court to be
1064 necessary to reimburse the unit owner for his or her share of
1065 assessments levied by the association to fund its expenses of
1066 the litigation. This relief does not exclude other remedies
1067 provided by law. Actions arising under this subsection are not
1068 considered may not be deemed to be actions for specific
1069 performance.
1070 (3) The association may levy reasonable fines for the
1071 failure of the owner of the unit or its occupant, licensee, or
1072 invitee to comply with any provision of the declaration, the
1073 association bylaws, or reasonable rules of the association. A
1074 fine may not become a lien against a unit. A fine may be levied
1075 by the board on the basis of each day of a continuing violation,
1076 with a single notice and opportunity for hearing before a
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Amendment No. 1
1077 committee as provided in paragraph (b). However, the fine may
1078 not exceed $100 per violation, or $1,000 in the aggregate.
1079 (b) A fine or suspension levied by the board of
1080 administration may not be imposed unless the board first
1081 provides at least 14 days' written notice to the unit owner and,
1082 if applicable, any tenant occupant, licensee, or invitee of the
1083 unit owner sought to be fined or suspended, and an opportunity
1084 for a hearing before a committee of at least three members
1085 appointed by the board who are not officers, directors, or
1086 employees of the association, or the spouse, parent, child,
1087 brother, or sister of an officer, director, or employee. The
1088 role of the committee is limited to determining whether to
1089 confirm or reject the fine or suspension levied by the board. If
1090 the committee does not approve the proposed fine or suspension
1091 by majority vote, the fine or suspension may not be imposed. If
1092 the proposed fine or suspension is approved by the committee,
1093 the fine payment is due 5 days after notice of the approved fine
1094 is provided to the unit owner and, if applicable, to any tenant,
1095 licensee, or invitee of the unit owner the date of the committee
1096 meeting at which the fine is approved. The association must
1097 provide written notice of such fine or suspension by mail or
1098 hand delivery to the unit owner and, if applicable, to any
1099 tenant, licensee, or invitee of the unit owner.
1100 Section 12. Present subsections (1) and (2) of section
1101 718.501, Florida Statutes, are redesignated as subsections (2)
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Amendment No. 1
1102 and (3), respectively, a new subsection (1) is added to that
1103 section and paragraphs (h) and (j) of present subsection (1) of
1104 that section are amended, to read:
1105 718.501 Authority, responsibility, and duties of Division
1106 of Florida Condominiums, Timeshares, and Mobile Homes.-
1107 (1) As used in this section, the term ''financial issue"
1108 means an issue related to operating budgets; reserve schedules;
1109 accounting records under s. 718.111(12) (a)ll.; notices of
1110 meetings; minutes of meetings discussing budget or financial
1111 issues; assessments for common expenses, fees, or fines; the
1112 commingling of funds; and any other record necessary to
1113 determine the revenues and expenses of the association. The
1114 division may adopt rules to further define what a financial
1115 issue is under this section and may adopt a rule outlining the
1116 requirements of the checklist under s. 718.lll(c)l.
1117 (2) The division may enforce and ensure compliance with
1118 the provisions of this chapter and rules relating to the
1119 development, construction, sale, lease, ownership, operation,
1120 and management of residential condominium units. In performing
1121 its duties, the division has complete jurisdiction to
1122 investigate complaints and enforce compliance with respect to
1123 associations that are still under developer control or the
1124 control of a bulk assignee or bulk buyer pursuant to part VII of
1125 this chapter and complaints against developers, bulk assignees,
1126 or bulk buyers involving improper turnover or failure to
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Amendment No. 1
1127 turnover, pursuant to s. 718.301. However, after turnover has
1128 occurred, the division has jurisdiction to investigate
1129 complaints related only to financial issues, elections, and the
1130 maintenance of and unit owner access to association records
1131 under pursuant to s. 718.111(12).
1132 (h) The division shall furnish each association that pays
1133 the fees required by paragraph (3) (a) (2) (a) a copy of this
1134 chapter, as amended, and the rules adopted thereto on an annual
1135 basis.
1136 (j) The division shall provide training and educational
1137 programs for condominium association board members and unit
1138 owners. The training may, in the division's discretion, include
1139 web-based electronic media, and live training and seminars in
1140 various locations throughout the state. The division may review
1141 and approve education and training programs for board members
1142 and unit owners offered by providers and shall maintain a
1143 current list of approved programs and providers and make such
1144 list available to board members and unit owners in a reasonable
1145 and cost-effective manner. The division may adopt rules to
1146 establish requirements for the training and educational programs
1147 required in this paragraph.
1148 Section 13. Section 718.5014, Florida Statutes, is amended
1149 to read:
1150 718.5014 Ombudsman location.-The ombudsman shall maintain
1151 his or her principal office in a Leon County on the premises of
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1152 the division or, if suitable space cannot be provided there, at
1153 another place convenient to the offices of the division which
1154 will enable the ombudsman to expeditiously carry out the duties
1155 and functions of his or her office. The ombudsman may establish
1156 branch offices elsewhere in the state upon the concurrence of
1157 the Governor.
1158 Section 14. Subsection (25) of section 719.103, Florida
1159 Statutes, is amended to read:
1160 719.103 Definitions.-As used in this chapter:
1161 (25) "Unit" means a part of the cooperative property which
1162 is subject to exclusive use and possession. A unit may be
1163 improvements, land, or land and improvements together, as
1164 specified in the cooperative documents. An interest in a unit is
1165 an interest in real property.
1166 Section 15. Paragraph (c) of subsection (2) of section
1167 719.104, Florida Statutes, is amended to read:
1168 719.104 Cooperatives; access to units; records; financial
1169 reports; assessments; purchase of leases.-
1170 (2) OFFICIAL RECORDS.-
1171 (c) The official records of the association are open to
1172 inspection by any association member or the authorized
1173 representative of such member at all reasonable times. The right
1174 to inspect the records includes the right to make or obtain
1175 copies, at the reasonable expense, if any, of the association
1176 member. The association may adopt reasonable rules regarding the
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1177 frequency, time, location, notice, and manner of record
1178 inspections and copying, but may not require a member to
1179 demonstrate any purpose or state any reason for the inspection.
1180 The failure of an association to provide the records within 10
1181 working days after receipt of a written request creates a
1182 rebuttable presumption that the association willfully failed to
1183 comply with this paragraph. A member unit owner who is denied
1184 access to official records is entitled to the actual damages or
1185 minimum damages for the association's willful failure to comply.
1186 The minimum damages are $50 per calendar day for up to 10 days,
1187 beginning on the 11th working day after receipt of the written
1188 request. The failure to permit inspection entitles any person
1189 prevailing in an enforcement action to recover reasonable
1190 attorney fees from the person in control of the records who,
1191 directly or indirectly, knowingly denied access to the records.
1192 Any person who knowingly or intentionally defaces or destroys
1193 accounting records that are required by this chapter to be
1194 maintained during the period for which such records are required
1195 to be maintained, or who knowingly or intentionally fails to
1196 create or maintain accounting records that are required to be
1197 created or maintained, with the intent of causing harm to the
1198 association or one or more of its members, is personally subject
1199 to a civil penalty under pursuant to s. 719.501(1) (d). The
1200 association shall maintain an adequate number of copies of the
1201 declaration, articles of incorporation, bylaws, and rules, and
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1202 all amendments to each of the foregoing, as well as the question
1203 and answer sheet as described ins. 719.504 and year-end
1204 financial information required by the department, on the
1205 cooperative property to ensure their availability to members
1206 unit owners and prospective purchasers, and may charge its
1207 actual costs for preparing and furnishing these documents to
1208 those requesting the same. An association shall allow a member
1209 or his or her authorized representative to use a portable
1210 device, including a smartphone, tablet, portable scanner, or any
1211 other technology capable of scanning or taking photographs, to
1212 make an electronic copy of the official records in lieu of the
1213 association providing the member or his or her authorized
1214 representative with a copy of such records. The association may
1215 not charge a member or his or her authorized representative for
1216 the use of a portable device. Notwithstanding this paragraph,
1217 the following records shall not be accessible to members -llfri-t-
1218 owners:
1219 1. Any record protected by the lawyer-client privilege as
1220 described ins. 90.502 and any record protected by the work-
1221 product privilege, including any record prepared by an
1222 association attorney or prepared at the attorney's express
1223 direction which reflects a mental impression, conclusion,
1224 litigation strategy, or legal theory of the attorney or the
1225 association, and which was prepared exclusively for civil or
1226 criminal litigation or for adversarial administrative
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1227 proceedings, or which was prepared in anticipation of such
1228 litigation or proceedings until the conclusion of the litigation
1229 or proceedings.
1230 2. Information obtained by an association in connection
1231 with the approval of the lease, sale, or other transfer of a
1232 unit.
1233 3. Personnel records of association or management company
1234 employees, including, but not limited to, disciplinary, payroll,
1235 health, and insurance records. For purposes of this
1236 subparagraph, the term ''personnel records" does not include
1237 written employment agreements with an association employee or
1238 management company, or budgetary or financial records that
1239 indicate the compensation paid to an association employee.
1240 4. Medical records of unit owners.
1241 5. Social security numbers, driver license numbers, credit
1242 card numbers, e-mail addresses, telephone numbers, facsimile
1243 numbers, emergency contact information, addresses of a unit
1244 owner other than as provided to fulfill the association's notice
1245 requirements, and other personal identifying information of any
1246 person, excluding the person's name, unit designation, mailing
1247 address, property address, and any address, e-mail address, or
1248 facsimile number provided to the association to fulfill the
1249 association's notice requirements. Notwithstanding the
1250 restrictions in this subparagraph, an association may print and
1251 distribute to unit parcel owners a directory containing the
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1252 name, unit parcel address, and all telephone numbers of each
1253 unit parcel owner. However, an owner may exclude his or her
1254 telephone numbers from the directory by so requesting in writing
1255 to the association. An owner may consent in writing to the
1256 disclosure of other contact information described in this
1257 subparagraph. The association is not liable for the inadvertent
1258 disclosure of information that is protected under this
1259 subparagraph if the information is included in an official
1260 record of the association and is voluntarily provided by an
1261 owner and not requested by the association.
1262 6. Electronic security measures that are used by the
1263 association to safeguard data, including passwords.
1264 7. The software and operating system used by the
1265 association which allow the manipulation of data, even if the
1266 owner owns a copy of the same software used by the association.
1267 The data is part of the official records of the association.
1268 Section 16. Paragraphs (b), (f), and (1) of subsection (1)
1269 of section 719.106, Florida Statutes, is amended, and subsection
1270 (3) is added to that section, to read:
1271 719.106 Bylaws; cooperative ownership.-
1272 (1) MANDATORY PROVISIONS.-The bylaws or other cooperative
1273 documents shall provide for the following, and if they do not,
1274 they shall be deemed to include the following:
1275 (b) Quorum; voting requirements; proxies.-
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1276 1. Unless otherwise provided in the bylaws, the percentage
1277 of voting interests required to constitute a quorum at a meeting
1278 of the members shall be a majority of voting interests, and
1279 decisions shall be made by owners of a majority of the voting
1280 interests. Unless otherwise provided in this chapter, or in the
1281 articles of incorporation, bylaws, or other cooperative
1282 documents, and except as provided in subparagraph (d)l.,
1283 decisions shall be made by owners of a majority of the voting
1284 interests represented at a meeting at which a quorum is present.
1285 2. Except as specifically otherwise provided herein, after
1286 January 1, 1992, unit owners may not vote by general proxy, but
1287 may vote by limited proxies substantially conforming to a
1288 limited proxy form adopted by the division. Limited proxies and
1289 general proxies may be used to establish a quorum. Limited
1290 proxies shall be used for votes taken to waive or reduce
1291 reserves in accordance with subparagraph (j)2., for votes taken
1292 to waive the financial reporting requirements of s.
1293 719.104(4) (b), for votes taken to amend the articles of
1294 incorporation or bylaws pursuant to this section, and for any
1295 other matter for which this chapter requires or permits a vote
1296 of the unit owners. Except as provided in paragraph (d), after
1297 January 1, 1992, no proxy, limited or general, shall be used in
1298 the election of board members. General proxies may be used for
1299 other matters for which limited proxies are not required, and
1300 may also be used in voting for nonsubstantive changes to items
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Amendment No. 1
1301 for which a limited proxy is required and given. Notwithstanding
1302 the provisions of this section, unit owners may vote in person
1303 at unit owner meetings. Nothing contained herein shall limit the
1304 use of general proxies or require the use of limited proxies or
1305 require the use of limited proxies for any agenda item or
1306 election at any meeting of a timeshare cooperative.
1307 3. Any proxy given shall be effective only for the
1308 specific meeting for which originally given and any lawfully
1309 adjourned meetings thereof. In no event shall any proxy be valid
1310 for a period longer than 90 days after the date of the first
1311 meeting for which it was given. Every proxy shall be revocable
1312 at any time at the pleasure of the unit owner executing it.
1313 4. A member of the board of administration or a committee
1314 may submit in writing his or her agreement or disagreement with
1315 any action taken at a meeting that the member did not attend.
1316 This agreement or disagreement may not be used as a vote for or
1317 against the action taken and may not be used for the purposes of
1318 creating a quorum.
1319 5. A board or committee member participating in a meeting
1320 via telephone, real-time video conferencing, or similar real-
1321 time electronic or video communication counts toward a quorum,
1322 and such member may vote as if physically present When some or
1323 all of the board or coffiffiittee members meet by telephone
1324 conference, those board or coffiffiittee members attending by
1325 telephone conference may be counted toward obtaining a quorum
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Amendment No. 1
1326 and may vote by telephone. A telephone speaker must shall be
1327 used utilized so that the conversation of such those board or
1328 committee members attending by telephone may be heard by the
1329 board or committee members attending in person, as well as by
1330 any unit owners present at a meeting.
1331 (f) Recall of board members.-Subject to s. 719.301, any
1332 member of the board of administration may be recalled and
1333 removed from office with or without cause by the vote or
1334 agreement in writing by a majority of all the voting interests.
1335 A special meeting of the voting interests to recall any member
1336 of the board of administration may be called by 10 percent of
1337 the unit owners giving notice of the meeting as required for a
1338 meeting of unit owners, and the notice shall state the purpose
1339 of the meeting. Electronic transmission may not be used as a
1340 method of giving notice of a meeting called in whole or in part
1341 for this purpose.
1342 1. If the recall is approved by a majority of all voting
1343 interests by a vote at a meeting, the recall shall be effective
1344 as provided in this paragraph. The board shall duly notice and
1345 hold a board meeting within 5 full business days after the
1346 adjournment of the unit owner meeting to recall one or more
1347 board members. At the meeting, the board shall either certify
1348 the recall, in which case such member or members shall be
1349 recalled effective immediately and shall turn over to the board
1350 within 5 full business days any and all records and property of
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1351 the association in their possession, or shall proceed as set
1352 forth in subparagraph 3.
1353 2. If the proposed recall is by an agreement in writing by
1354 a majority of all voting interests, the agreement in writing or
1355 a copy thereof shall be served on the association by certified
1356 mail or by personal service in the manner authorized by chapter
1357 48 and the Florida Rules of Civil Procedure. The board of
1358 administration shall duly notice and hold a meeting of the board
1359 within 5 full business days after receipt of the agreement in
1360 writing. At the meeting, the board shall either certify the
1361 written agreement to recall members of the board, in which case
1362 such members shall be recalled effective immediately and shall
1363 turn over to the board, within 5 full business days, any and all
1364 records and property of the association in their possession, or
1365 proceed as described in subparagraph 3.
1366 3. If the board determines not to certify the written
1367 agreement to recall members of the board, or does not certify
1368 the recall by a vote at a meeting, the board shall, within 5
1369 full business days after the board meeting, file with the
1370 division a petition for binding arbitration pursuant to the
1371 procedures of s. 719.1255 or file an action with a court of
1372 competent jurisdiction. For purposes of this paragraph, the unit
1373 owners who voted at the meeting or who executed the agreement in
1374 writing shall constitute one party under the petition for
1375 arbitration or action with a court of competent jurisdiction. If
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1376 the arbitrator or court certifies the recall as to any member of
1377 the board, the recall shall be effective upon the final order of
1378 the court or the mailing of the final order of arbitration to
1379 the association. If the association fails to comply with the
1380 order of the arbitrator or court, the division may take action
1381 pursuant to s. 719.501. Any member so recalled shall deliver to
1382 the board any and all records and property of the association in
1383 the member's possession within 5 full business days after the
1384 effective date of the recall.
1385 4. If the board fails to duly notice and hold a board
1386 meeting within 5 full business days after service of an
1387 agreement in writing or within 5 full business days after the
1388 adjournment of the unit owner recall meeting, the recall shall
1389 be deemed effective and the board members so recalled shall
1390 immediately turn over to the board any and all records and
1391 property of the association.
1392 5. If the board fails to duly notice and hold the required
1393 meeting or fails to file the required petition or action, the
1394 unit owner representative may file a petition pursuant to s.
1395 719.1255 or file an action in a court of competent jurisdiction
1396 challenging the board's failure to act. The petition or action
1397 must be filed within 60 days after the expiration of the
1398 applicable 5-full-business-day period. The review of a petition
1399 or action under this subparagraph is limited to the sufficiency
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Amendment No. 1
1400 of service on the board and the facial validity of the written
1401 agreement or ballots filed.
1402 6. If a vacancy occurs on the board as a result of a
1403 recall and less than a majority of the board members are
1404 removed, the vacancy may be filled by the affirmative vote of a
1405 majority of the remaining directors, notwithstanding any
1406 provision to the contrary contained in this chapter. If
1407 vacancies occur on the board as a result of a recall and a
1408 majority or more of the board members are removed, the vacancies
1409 shall be filled in accordance with procedural rules to be
1410 adopted by the division, which rules need not be consistent with
1411 this chapter. The rules must provide procedures governing the
1412 conduct of the recall election as well as the operation of the
1413 association during the period after a recall but before the
1414 recall election.
1415 7. A board member who has been recalled may file a
1416 petition pursuant to s. 719.1255 or file an action in a court of
1417 competent jurisdiction challenging the validity of the recall.
1418 The petition or action must be filed within 60 days after the
1419 recall is deemed certified. The association and the unit owner
1420 representative shall be named as the respondents.
1421 8. The division or a court of competent jurisdiction may
1422 not accept for filing a recall petition or action, whether filed
1423 pursuant to subparagraph 1., subparagraph 2., subparagraph 5.,
1424 or subparagraph 7. and regardless of whether the recall was
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Amendment No. 1
1425 certified, when there are 60 or fewer days until the scheduled
1426 reelection of the board member sought to be recalled or when 60
1427 or fewer days have not elapsed since the election of the board
1428 member sought to be recalled.
1429 (1) Alternative Dispute Resolution ~rbitration.-There
1430 shall be a provision for mandatory nonbinding alternative
1431 dispute resolution arbitration of internal disputes arising from
1432 the operation of the cooperative in accordance withs. 719.1255.
1433 (3) GENERALLY.-The association may extinguish a
1434 discriminatory restriction, as defined ins. 712.065(1),
1435 pursuant to s. 712.065.
1436 Section 17. Paragraph (1) of subsection (4) of section
1437 720.303, Florida Statutes, is redesignated as paragraph (m), a
1438 new paragraph (1) is added to that subsection, and paragraph (c)
1439 of subsection (2), present paragraph (1) of subsection (4), and
1440 paragraphs (c) and (d) of subsection (6), and paragraphs (b),
1441 (d), (g), (k), and (1) of subsection (10) of that section are
1442 amended, to read:
1443 720.303 Association powers and duties; meetings of board;
1444 official records; budgets; financial reporting; association
1445 funds; recalls.-
1446 (2) BOARD MEETINGS.-
1447 (c) The bylaws shall provide the following for giving
1448 notice to parcel owners and members of all board meetings and,
1449 if they do not do so, shall be deemed to include the following:
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Amendment No. 1
1450 1. Notices of all board meetings must be posted in a
1451 conspicuous place in the community at least 48 hours in advance
1452 of a meeting, except in an emergency. In the alternative, if
1453 notice is not posted in a conspicuous place in the community,
1454 notice of each board meeting must be mailed or delivered to each
1455 member at least 7 days before the meeting, except in an
1456 emergency. Notwithstanding this general notice requirement, for
1457 communities with more than 100 members, the association bylaws
1458 may provide for a reasonable alternative to posting or mailing
1459 of notice for each board meeting, including publication of
1460 notice, provision of a schedule of board meetings, or the
1461 conspicuous posting and repeated broadcasting of the notice on a
1462 closed-circuit cable television system serving the homeowners'
1463 association. However, if broadcast notice is used in lieu of a
1464 notice posted physically in the community, the notice must be
1465 broadcast at least four times every broadcast hour of each day
1466 that a posted notice is otherwise required. When broadcast
1467 notice is provided, the notice and agenda must be broadcast in a
1468 manner and for a sufficient continuous length of time so as to
1469 allow an average reader to observe the notice and read and
1470 comprehend the entire content of the notice and the agenda. In
1471 addition to any of the authorized means of providing notice of a
1472 meeting of the board, the association may, by rule, adopt a
1473 procedure for conspicuously posting the meeting notice and the
1474 agenda on the association's website or mobile application for at
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Amendment No. 1
1475 least the minimum period of time for which a notice of a meeting
1476 is also required to be physically posted on the association
1477 property. Any rule adopted shall, in addition to other matters,
1478 include a requirement that the association send an electronic
1479 notice in the same manner as is required for a notice of a
1480 meeting of the members, which must include a hyperlink to the
1481 website or mobile appliation where the notice is posted, to
1482 members whose e-mail addresses are included in the association's
1483 official records. The association may provide notice by
1484 electronic transmission in a manner authorized by law for
1485 meetings of the board of directors, committee meetings requiring
1486 notice under this section, and annual and special meetings of
1487 the members to any member who has provided a facsimile number or
1488 e-mail address to the association to be used for such purposes;
1489 however, a member must consent in writing to receiving notice by
1490 electronic transmission.
1491 2. An assessment may not be levied at a board meeting
1492 unless the notice of the meeting includes a statement that
1493 assessments will be considered and the nature of the
1494 assessments. Written notice of any meeting at which special
1495 assessments will be considered or at which amendments to rules
1496 regarding parcel use will be considered must be mailed,
1497 delivered, or electronically transmitted to the members and
1498 parcel owners and posted conspicuously on the property or
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1499 broadcast on closed-circuit cable television not less than 14
1500 days before the meeting.
1501 3. Directors may not vote by proxy or by secret ballot at
1502 board meetings, except that secret ballots may be used in the
1503 election of officers. This subsection also applies to the
1504 meetings of any committee or other similar body, when a final
1505 decision will be made regarding the expenditure of association
1506 funds, and to any body vested with the power to approve or
1507 disapprove architectural decisions with respect to a specific
1508 parcel of residential property owned by a member of the
1509 community.
1510 (4) OFFICIAL RECORDS.-The association shall maintain each
1511 of the following items, when applicable, which constitute the
1512 official records of the association:
1513 (1) Ballots, sign-in sheets, voting proxies, and all other
1514 papers and electronic records relating to voting by parcel
1515 owners, which must be maintained for at least 1 year after the
1516 date of the election, vote, or meeting.
1517 (m)-f-±+ All other written records of the association not
1518 specifically included in this subsection the foregoing which are
1519 related to the operation of the association.
1520 (6) BUDGETS.-
1521 (c)l. If the budget of the association does not provide
1522 for reserve accounts pursuant to paragraph (d), or the
1523 declaration of covenants, articles, or bylaws do not obligate
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Amendment No. 1
1524 the developer to create reserves, and the association is
1525 responsible for the repair and maintenance of capital
1526 improvements that may result in a special assessment if reserves
1527 are not provided or not fully funded, then each financial report
1528 for the preceding fiscal year required by subsection (7) must
1529 contain the following statement in conspicuous type:
1530
1531 THE BUDGET OF THE ASSOCIATION DOES NOT PROVIDE FOR FULLY FUNDING
1532 RESERVE ACCOUNTS FOR CAPITAL EXPENDITURES AND DEFERRED
1533 MAINTENANCE THAT MAY RESULT IN SPECIAL ASSESSMENTS REGARDING
1534 THOSE ITEMS. OWNERS MAY ELECT TO PROVIDE FOR FULLY FUNDING
1535 RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6), FLORIDA
1536 STATUTES, UPON OBTAINING THE APPROVAL OF A MAJORITY OF THE TOTAL
1537 VOTING INTERESTS OF THE ASSOCIATION BY VOTE OF THE MEMBERS AT A
1538 MEETING OR BY WRITTEN CONSENT.
1539
1540 2. If the budget of the association does provide for
1541 funding accounts for deferred expenditures, including, but not
1542 limited to, funds for capital expenditures and deferred
1543 maintenance, but such accounts are not created or established
1544 pursuant to paragraph (d), each financial report for the
1545 preceding fiscal year required under subsection (7) must also
1546 contain the following statement in conspicuous type:
1547
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1548 THE BUDGET OF THE ASSOCIATION PROVIDES FOR LIMITED VOLUNTARY
1549 DEFERRED EXPENDITURE ACCOUNTS, INCLUDING CAPITAL EXPENDITURES
1550 AND DEFERRED MAINTENANCE, SUBJECT TO LIMITS ON FUNDING CONTAINED
1551 IN OUR GOVERNING DOCUMENTS. BECAUSE THE OWNERS HAVE NOT ELECTED
1552 TO PROVIDE FOR RESERVE ACCOUNTS PURSUANT TO SECTION 720.303(6),
1553 FLORIDA STATUTES, THESE FUNDS ARE NOT SUBJECT TO THE
1554 RESTRICTIONS ON USE OF SUCH FUNDS SET FORTH IN THAT STATUTE, NOR
1555 ARE RESERVES CALCULATED IN ACCORDANCE WITH THAT STATUTE.
1556 (d) An association is deemed to have provided for reserve
1557 accounts if reserve accounts have been initially established by
1558 the developer or if the membership of the association
1559 affirmatively elects to provide for reserves. If reserve
1560 accounts are established by the developer, the budget must
1561 designate the components for which the reserve accounts may be
1562 used. If reserve accounts are not initially provided by the
1563 developer, the membership of the association may elect to do so
1564 upon the affirmative approval of a majority of the total voting
1565 interests of the association. Such approval may be obtained by
1566 vote of the members at a duly called meeting of the membership
1567 or by the written consent of a majority of the total voting
1568 interests of the association. The approval action of the
1569 membership must state that reserve accounts shall be provided
1570 for in the budget and must designate the components for which
1571 the reserve accounts are to be established. Upon approval by the
1572 membership, the board of directors shall include the required
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Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1573 reserve accounts in the budget in the next fiscal year following
1574 the approval and each year thereafter. Once established as
1575 provided in this subsection, the reserve accounts must be funded
1576 or maintained or have their funding waived in the manner
1577 provided in paragraph (f).
1578 (10) RECALL OF DIRECTORS.-
1579 (b)l. Board directors may be recalled by an agreement in
1580 writing or by written ballot without a membership meeting. The
1581 agreement in writing or the written ballots, or a copy thereof,
1582 shall be served on the association by certified mail or by
1583 personal service in the manner authorized by chapter 48 and the
1584 Florida Rules of Civil Procedure.
1585 2. The board shall duly notice and hold a meeting of the
1586 board within 5 full business days after receipt of the agreement
1587 in writing or written ballots. At the meeting, the board shall
1588 either certify the written ballots or written agreement to
1589 recall a director or directors of the board, in which case such
1590 director or directors shall be recalled effective immediately
1591 and shall turn over to the board within 5 full business days any
1592 and all records and property of the association in their
1593 possession, or proceed as described in paragraph (d).
1594 3. When it is determined by the department pursuant to
1595 binding arbitration proceedings or a court of competent
1596 jurisdiction that an initial recall effort was defective,
1597 written recall agreements or written ballots used in the first
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1598 recall effort and not found to be defective may be reused in one
1599 subsequent recall effort. However, in no event is a written
1600 agreement or written ballot valid for more than 120 days after
1601 it has been signed by the member.
1602 4. Any rescission or revocation of a member's written
1603 recall ballot or agreement must be in writing and, in order to
1604 be effective, must be delivered to the association before the
1605 association is served with the written recall agreements or
1606 ballots.
1607 5. The agreement in writing or ballot shall list at least
1608 as many possible replacement directors as there are directors
1609 subject to the recall, when at least a majority of the board is
1610 sought to be recalled; the person executing the recall
1611 instrument may vote for as many replacement candidates as there
1612 are directors subject to the recall.
1613 (d) If the board determines not to certify the written
1614 agreement or written ballots to recall a director or directors
1615 of the board or does not certify the recall by a vote at a
1616 meeting, the board shall, within 5 full business days after the
1617 meeting, file an action with a court of competent jurisdiction
1618 or file with the department a petition for binding arbitration
1619 pursuant to the applicable procedures in ss. 718.112(2) (j) and
1620 718.1255 and the rules adopted thereunder. For the purposes of
1621 this section, the members who voted at the meeting or who
1622 executed the agreement in writing shall constitute one party
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1623 under the petition for arbitration or action in a court of
1624 competent jurisdiction. If the arbitrator or court certifies the
1625 recall as to any director or directors of the board, the recall
1626 will be effective upon the final order of the court or the
1627 mailing of the final order of arbitration to the association.
1628 The director or directors so recalled shall deliver to the board
1629 any and all records of the association in their possession
1630 within 5 full business days after the effective date of the
1631 recall.
1632 (g) If the board fails to duly notice and hold the
1633 required meeting or fails to file the required petition or
1634 action, the unit owner representative may file an action in a
1635 court of competent jurisdiction or a petition pursuant to s.
1636 718.1255 challenging the board's failure to act. The petition or
1637 action must be filed within 60 days after the expiration of the
1638 applicable 5-full-business-day period. The review of a petition
1639 or action under this paragraph is limited to the sufficiency of
1640 service on the board and the facial validity of the written
1641 agreement or ballots filed.
1642 (k) A board member who has been recalled may file an
1643 action with a court of competent jurisdiction or file a petition
1644 pursuant toss. 718.112(2) (j) and 718.1255 and the rules adopted
1645 challenging the validity of the recall. The petition or action
1646 must be filed within 60 days after the recall is deemed
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1647 certified. The association and the unit owner representative
1648 shall be named as respondents.
1649 (1) The division or a court of competent jurisdiction may
1650 not accept for filing a recall petition or action, whether filed
1651 pursuant to paragraph (b), paragraph (c), paragraph (g), or
1652 paragraph (k) and regardless of whether the recall was
1653 certified, when there are 60 or fewer days until the scheduled
1654 reelection of the board member sought to be recalled or when 60
1655 or fewer days have not elapsed since the election of the board
1656 member sought to be recalled.
1657 Section 18. Subsections (1) and (2) of section 720.305,
1658 Florida Statutes, are amended to read:
1659 720.305 Obligations of members; remedies at law or in
1660 equity; levy of fines and suspension of use rights.-
1661 (1) Each member and the member's tenants, guests, and
1662 invitees, and each association, are governed by, and must comply
1663 with, this chapter andT the governing documents of the
1664 community, and the rules of the association. Actions at law or
1665 in equity, or both, to redress alleged failure or refusal to
1666 comply with these provisions may be brought by the association
1667 or by any member against:
1668 (a) The association;
1669 (b) A member;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1670 (c) Any director or officer of an association who
1671 willfully and knowingly fails to comply with these provisions;
1672 and
1673 (d) Any tenants, guests, or invitees occupying a parcel or
1674 using the common areas.
1675
1676 The prevailing party in any such litigation is entitled to
1677 recover reasonable attorney fees and costs. A member prevailing
1678 in an action between the association and the member under this
1679 section, in addition to recovering his or her reasonable
1680 attorney fees, may recover additional amounts as determined by
1681 the court to be necessary to reimburse the member for his or her
1682 share of assessments levied by the association to fund its
1683 expenses of the litigation. This relief does not exclude other
1684 remedies provided by law. This section does not deprive any
1685 person of any other available right or remedy.
1686 (2) An !f.fte association may levy reasonable fines. A fine
1687 may not exceed $100 per violation against any member or any
1688 member's tenant, guest, or invitee for the failure of the owner
1689 of the parcel or its occupant, licensee, or invitee to comply
1690 with any provision of the declaration, the association bylaws,
1691 or reasonable rules of the association unless otherwise provided
1692 in the governing documents. A fine may be levied by the board
1693 for each day of a continuing violation, with a single notice and
1694 opportunity for hearing, except that the fine may not exceed
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1695 $1,000 in the aggregate unless otherwise provided in the
1696 governing documents. A fine of less than $1,000 may not become a
1697 lien against a parcel. In any action to recover a fine, the
1698 prevailing party is entitled to reasonable attorney fees and
1699 costs from the nonprevailing party as determined by the court.
1700 (a) An association may suspend, for a reasonable period of
1701 time, the right of a member, or a member's tenant, guest, or
1702 invitee, to use common areas and facilities for the failure of
1703 the owner of the parcel or its occupant, licensee, or invitee to
1704 comply with any provision of the declaration, the association
1705 bylaws, or reasonable rules of the association. This paragraph
1706 does not apply to that portion of common areas used to provide
1707 access or utility services to the parcel. A suspension may not
1708 prohibit an owner or tenant of a parcel from having vehicular
1709 and pedestrian ingress to and egress from the parcel, including,
1710 but not limited to, the right to park.
1711 (b) A fine or suspension levied by the board of
1712 administration may not be imposed unless the board first
1713 provides at least 14 days' notice to the parcel owner and, if
1714 applicable, any occupant, licensee, or invitee of the parcel
1715 owner, sought to be fined or suspended and an opportunity for a
1716 hearing before a committee of at least three members appointed
1717 by the board who are not officers, directors, or employees of
1718 the association, or the spouse, parent, child, brother, or
1719 sister of an officer, director, or employee. If the committee,
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1720 by majority vote, does not approve a proposed fine or
1721 suspension, the proposed fine or suspension may not be imposed.
1722 The role of the committee is limited to determining whether to
1723 confirm or reject the fine or suspension levied by the board. If
1724 the proposed fine or suspension levied by the board is approved
1725 by the committee, the fine payment is due 5 days after notice of
1726 the approved fine is provided to the parcel owner and, if
1727 applicable, to any occupant, licensee, or invitee of the parcel
1728 owner the date of the coffiffiittee meeting at which the fine is
1729 approved. The association must provide written notice of such
1730 fine or suspension by mail or hand delivery to the parcel owner
1731 and, if applicable, to any occupant tenant, licensee, or invitee
1732 of the parcel owner.
1733 Section 19. Paragraph (g) of subsection (1) and paragraph
1734 (c) of subsection 9 of section 720.306, Florida Statutes, are
1735 amended, and paragraph (h) is added to subsection (1) to read:
1736 720.306 Meetings of members; voting and election
1737 procedures; amendments.-
1738 (1) QUORUM; AMENDMENTS.-
1739 (g) A notice required under this section must be mailed or
1740 delivered to the address identified as the parcel owner's
1741 mailing address in the official records of the association as
1742 required under s. 720.303(4) on the property appraiser's website
1743 for the county in which the parcel is located, or electronically
1744 transmitted in a manner authorized by the association if the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1745 parcel owner has consented, in writing, to receive notice by
1746 electronic transmission.
1747 (h)l. Except as provided herein, an amendment to any
1748 governing document enacted after July 1, 2020, that prohibits a
1749 parcel owner from renting his or her parcel, alters the
1750 authorized duration of a rental term, or specifies or limits the
1751 number of times that a parcel owner may rent his or her parcel
1752 during a specified period, applies only to a parcel owner who
1753 consents, individually or through a representative, to the
1754 amendment, and to parcel owners who acquire title to a parcel
1755 after the effective date of the amendment.
1756 2. Notwithstanding subparagraph 1. an association may
1757 amend its governing documents to prohibit or regulate rental
1758 durations that are for terms of less than six months, and
1759 prohibit a parcel owner from renting his or parcel more than
1760 three times in a calendar year. Any such amendments apply to all
1761 parcel owners.
17 62 3. Nothing in this paragraph shall affect the amendment
1763 restrictions for associations of 15 or fewer parcel owners as
1764 provided ins. 720.303(1).
1765 4. For purposes of this paragraph, a change of ownership
1766 does not occur when a parcel owner conveys the parcel to an
17 67 affiliated entity or when beneficial ownership of the parcel
17 68 does not change. For purposes of this paragraph, the term
1769 "affiliated entity" means an entity which controls, is
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1770 controlled by, or is under common control with the parcel owner
1771 or that becomes a parent or successor entity by reason of
1772 transfer, merger, consolidation, public offering,
1773 reorganization, dissolution or sale of stock, or transfer of
1774 membership partnership interests. For a conveyance to be
1775 recognized as one made to an affiliated entity, the entity must
1776 furnish the association a document certifying that this
1777 paragraph applies, as well as providing any organizational
1778 documents for the parcel owner and the affiliated entity that
1779 support the representations in the certificate, as requested by
1780 the association.
1781 (9) ELECTIONS AND BOARD VACANCIES.-
1782 (c) Any election dispute between a member and an
1783 association must be submitted to mandatory binding arbitration
1784 with the division or filed with a court of competent
1785 jurisdiction. Such proceedings that are submitted to mandatory
1786 binding arbitration with the division must be conducted in the
1787 manner provided bys. 718.1255 and the procedural rules adopted
1788 by the division. Unless otherwise provided in the bylaws, any
1789 vacancy occurring on the board before the expiration of a term
1790 may be filled by an affirmative vote of the majority of the
1791 remaining directors, even if the remaining directors constitute
1792 less than a quorum, or by the sole remaining director. In the
1793 alternative, a board may hold an election to fill the vacancy,
1794 in which case the election procedures must conform to the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1795 requirements of the governing documents. Unless otherwise
1796 provided in the bylaws, a board member appointed or elected
1797 under this section is appointed for the unexpired term of the
1798 seat being filled. Filling vacancies created by recall is
1799 governed bys. 720.303(10) and rules adopted by the division.
1800 Section 20. Subsection (1) of section 720.311, Florida
1801 Statutes, is amended to read:
1802 720.311 Dispute resolution.-
1803 (1) The Legislature finds that alternative dispute
1804 resolution has made progress in reducing court dockets and
1805 trials and in offering a more efficient, cost-effective option
1806 to litigation. The filing of any petition for arbitration or the
1807 serving of a demand for presuit mediation as provided for in
1808 this section shall toll the applicable statute of limitations.
1809 Any recall dispute filed with the department pursuant to s.
1810 720.303(10) shall be conducted by the department in accordance
1811 with the provisions of ss. 718.112(2) (j) and 718.1255~ and the
1812 rules adopted by the division. In addition, the department shall
1813 conduct mandatory binding arbitration of election disputes
1814 between a member and an association pursuant to s. 718.1255 and
1815 rules adopted by the division. Neither election disputes nor
1816 recall disputes are eligible for presuit mediation; these
1817 disputes shall be arbitrated by the department or filed in a
1818 court of competent jurisdiction. At the conclusion of a tBe
1819 proceeding filed for arbitration with the department, the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1820 department shall charge the parties a fee in an amount adequate
1821 to cover all costs and expenses incurred by the department in
1822 conducting the proceeding. Initially, the petitioner shall remit
1823 a filing fee of at least $200 to the department. The fees paid
1824 to the department shall become a recoverable cost in the
1825 arbitration proceeding, and the prevailing party in an
1826 arbitration proceeding shall recover its reasonable costs and
1827 attorney's fees in an amount found reasonable by the arbitrator.
1828 The department shall adopt rules to effectuate the purposes of
1829 this section.
1830 Section 21. Subsection (6) is added to section 720.3075,
1831 Florida Statutes, to read:
1832 720.3075 Prohibited clauses in association documents.-
1833 (6) The association may extinguish a discriminatory
1834 restriction, as defined ins. 712.065(1), pursuant to s.
1835 712.065.
1836 Section 22. This act shall take effect July 1, 2020.
1837
1838
1839
1840 T I T L E A ME N D ME N T
1841 Remove everything before the enacting clause and insert:
1842 An act relating to community associations; amending s.
1843 514.0015, F.S.; exempting certain property association
1844 pools from Department of Health regulations; amending
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1845 s. 627.714, F.S.; prohibiting subrogation rights
1846 against a condominium association under certain
1847 circumstances; creating s. 712.065, F.S.; defining the
1848 term ''discriminatory restriction"; providing that
1849 discriminatory restrictions are unlawful,
1850 unenforceable, and declared null and void; providing
1851 that certain discriminatory restrictions are
1852 extinguished and severed from recorded title
1853 transactions; specifying that the recording of certain
1854 notices does not reimpose or preserve a discriminatory
1855 restriction; providing requirements for a parcel owner
1856 to remove a discriminatory restriction from a covenant
1857 or restriction; amending s. 718.111, F.S.; requiring
1858 that certain records be maintained for a specified
1859 time; requiring associations to maintain official
1860 records in a specified manner; requiring an
1861 association to provide a checklist or affidavit
1862 relating to certain records to certain persons;
1863 providing a timeframe for maintaining such checklist
1864 and affidavit; creating a rebuttable presumption;
1865 prohibiting an association from requiring certain
1866 actions relating to the inspection of records;
1867 revising requirements relating to the posting of
1868 digital copies of certain documents by certain
1869 condominium associations; conforming cross-references;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1870 amending s. 718.112, F.S.; authorizing condominium
1871 associations to extinguish discriminatory
1872 restrictions; specifying that only board service that
1873 occurs on or after a specified date may be used for
1874 calculating a board member's term limit; providing
1875 requirements for certain notices; revising the fees an
1876 association may charge for transfers; conforming
1877 provisions to changes made by the act; deleting a
1878 prohibition against employing or contracting with
1879 certain service providers; amending s. 718.113, F.S.;
1880 defining the terms "natural gas fuel" and "natural gas
1881 fuel vehicle"; revising legislative findings; revising
1882 requirements for electric vehicle charging stations;
1883 providing requirements for the installation of natural
1884 gas fuel stations on property governed by condominium
1885 associations; amending s. 718.1255, F.S.; authorizing
1886 parties to initiate presuit mediation under certain
1887 circumstances; specifying when arbitration is binding
1888 on the parties; providing requirements for presuit
1889 mediation; amending s. 718.117, F.S.; conforming
1890 provisions to changes made by the act; amending s.
1891 718.121, F.S.; providing when the installation of a
1892 natural gas fuel station may be the basis of a lien;
1893 amending s. 718.202, F.S.; revising how developers may
1894 use certain withdrawn escrow funds; amending s.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1895 718.303, F.S.; revising requirements for certain
1896 actions for failure to comply with specified
1897 provisions; revising requirements for certain fines;
1898 amending s. 718.501, F.S.; defining the term
1899 ''financial issue"; authorizing the Division of
1900 Condominiums, Timeshares, and Mobile Homes to adopt
1901 rules; amending s. 718.5014, F.S.; revising where the
1902 principal office of the Office of the Condominium
1903 Ombudsman must be maintained; amending s. 719.103,
1904 F.S.; revising the definition of the term ''unit" to
1905 specify that an interest in a cooperative unit is an
1906 interest in real property; amending s. 719.104, F.S.;
1907 prohibiting an association from requiring certain
1908 actions relating to the inspection of records; making
1909 technical changes; amending s. 719.106, F.S.; revising
1910 provisions relating to a quorum and voting rights for
1911 members remotely participating in meetings; amending
1912 procedure to challenge a board member recall;
1913 conforming provisions to changes made by the act;
1914 authorizing cooperative associations to extinguish
1915 discriminatory restrictions; amending s. 720.303,
1916 F.S.; authorizing an association to adopt procedures
1917 for electronic meeting notices; revising the documents
1918 that constitute the official records of an
1919 association; revising when a specified statement must
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. 1
1920 be included in an association's financial report for
1921 the preceding fiscal year; revising requirements for
1922 such statement; revising when an association is deemed
1923 to have provided for reserve accounts; amending
1924 procedure to challenge a board member recall; amending
1925 s. 720.305, F.S.; providing requirements for certain
1926 fines; amending s. 720.306, F.S.; revising
1927 requirements for providing certain notices; providing
1928 limitations on associations when a parcel owner
1929 attempts to rent or lease his or her parcel; amending
1930 the procedure for election disputes; amending s.
1931 720.311, F.S.; amending procedure for election
1932 disputes; amending s. 720.3075, F.S.; authorizing
1933 homeowners' associations to extinguish discriminatory
1934 restrictions; providing an effective date.
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COMMERCE COMMITTEE
HB 623 by Rep. Shoaf
Community Associations
AMENDMENT SUMMARY
February 27, 2020
Amendment to amendment 1 by Rep. LaRosa (line 1656):
The amendment to the amendment:
• Provides that an owner in a homeowner's association may display another state's flag,
including any U.S. territory or commonwealth, in addition to being able to display the flag
of the United States, the State of Florida, a branch of the United States military, or a
POW-MIA flag.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. al
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative La Rosa offered the following:
3
4 Amendment to Amendment (079453) by Representative Shoaf
5 (with title amendment)
6 Between lines 1656 and 1657 of the amendment, insert:
7 Section 1. Paragraphs (a) and (b) of subsection (2) of
8 section 720.304, Florida Statutes, are amended to read:
9 720.304 Right of owners to peaceably assemble; display of
10 flag; SLAPP suits prohibited.-
11 (2) (a) Any homeowner may display one portable, removable
12 United States flag or official flag of the State of Florida in a
13 respectful manner, and one portable, removable official flag, in
14 a respectful manner, not larger than 4 1/2 feet by 6 feet, which
15 represents any state, as defined ins. 624.08, or the United
16 States Army, Navy, Air Force, Marine Corps, or Coast Guard, or a
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. al
17 POW-MIA flag, regardless of any covenants, restrictions, bylaws,
18 rules, or requirements of the association.
19 (b) Any homeowner may erect a freestanding flagpole no
20 more than 20 feet high on any portion of the homeowner's real
21 property, regardless of any covenants, restrictions, bylaws,
22 rules, or requirements of the association, if the flagpole does
23 not obstruct sightlines at intersections and is not erected
24 within or upon an easement. The homeowner may further display in
25 a respectful manner from that flagpole, regardless of any
26 covenants, restrictions, bylaws, rules, or requirements of the
27 association, one official United States flag, not larger than 4
28 1/2 feet by 6 feet, and may additionally display one official
29 flag of the State of Florida, any state, as defined ins.
30 624.08, or the United States Army, Navy, Air Force, Marines, or
31 Coast Guard, or a POW-MIA flag. Such additional flag must be
32 equal in size to or smaller than the United States flag. The
33 flagpole and display are subject to all building codes, zoning
34 setbacks, and other applicable governmental regulations,
35 including, but not limited to, noise and lighting ordinances in
36 the county or municipality in which the flagpole is erected and
37 all setback and locational criteria contained in the governing
38 documents.
39
40
41 T I T L E A ME N D ME N T
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 623 (2020)
Amendment No. al
42 Remove line 1925 of the amendment and insert:
43 amending s. 720.304, F.S.; regarding display of flags; amending
44 s. 720.305, F.S.; providing requirements for certain
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Page 3 of 3
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 723 Peer-to-Peer Car Sharing
SPONSOR(S): Insurance & Banking Subcommittee; Fischer and others
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 1 N, As CS Lloyd Cooper
2) State Affairs Committee 19 Y, 2 N Roth Williamson
3) Commerce Committee Lloyd Hamon
SUMMARY ANALYSIS
In recent years, the private market, through the Internet and smart phone technology, has allowed the
development of new forms of direct person-to-person economic arrangements. Companies have emerged to
facilitate the sharing of motor vehicles such that a private passenger vehicle is given over to another individual
to operate for a period. This is known as "peer-to-peer car-sharing." These services are different from
transportation network companies, like Uber, Sidecar, and Lyft, in that another person takes over possession
and control of the motor vehicle from the owner, rather than simply obtaining a ride. There are similar
commercial services available where one can rent a car from a business on an hourly basis; these are known
as car-sharing services and are similar to but distinct from traditional rental car companies. Unlike
transportation network companies and car-sharing services, there are no statutes directly regulating peer-to-
peer car-sharing.
The bill establishes statutory requirements for peer-to-peer car-sharing, including liabilities and insurance
obligations among participants. The bill:
• Defines the term "peer-to-peer car-sharing" as the authorized use of a motor vehicle by an individual
other than the vehicle's owner through a peer-to-peer car-sharing program. The term does not include
the renting of a motor vehicle through a rental company, the use of a for-hire vehicle, or joint use of
motor vehicles, such as ridesharing or carpooling.
• Establishes insurance requirements for each party involved in peer-to-peer car-sharing. During the
period that the owner is sharing the car with another driver, the peer-to-peer car-sharing program (e.g.,
Turo, Drift, and Getaround) is responsible for providing motor vehicle insurance at or above the
statutory minimums for private passenger motor vehicles. It coordinates coverage if there are multiple
insurance policies involved and depending on the circumstances. If the owner's or driver's policy lapses
or is inadequate, the program is responsible for the insurance requirements.
• Allows motor vehicle insurers insuring the shared vehicle owner to exclude coverage for use of the
vehicle in car-sharing.
• Provides that the peer-to-peer car-sharing program and vehicle owner are not vicariously liable for the
actions and damages of the driver during periods of peer-to-peer car-sharing use.
• Specifies recordkeeping requirements and retention periods.
• Includes requirements for consumer protection notifications.
• Addresses the repair, use, and non-use of motor vehicles under a safety recall notice.
• Provides that the bill does not limit the liability of the peer-to-peer car-sharing program for its acts or
omissions that cause bodily harm during peer-to-peer car-sharing; nor, the owner or driver to the peer-
to-peer car-sharing program for economic losses due to a breach of contract.
The bill does not appear to have a fiscal impact on the state or local governments.
The bill is effective March 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
In recent years, the private market, using the Internet and smart phone technology, has allowed the
development of new forms of direct person-to-person economic arrangements. Transportation network
companies (TNCs) have organized to allow individuals to earn extra income by sharing rides in their
personal cars. Entities like Uber, Lyft, and Sidecar facilitate the connection of individuals seeking rides
with those offering rides and manage payment transactions for the service. Because of questions over
safety, regulations, and insurance considerations, the Legislature passed CS/HB 221 1 in 2017 to
preempt local regulations and establish statutory requirements for TNCs, including defining insurance
liabilities and standards.
In a manner similar to TNCs, new companies have emerged to facilitate the sharing of motor vehicles
such that a private passenger vehicle is provided to another individual to operate for a period. This is
known as peer-to-peer car-sharing.
Currently, there are three motor vehicle rental or sharing models available. They are motor vehicle
rental companies, car-sharing services, and peer-to-peer car-sharing programs. Motor vehicle rental
companies and car-sharing services 2 are regulated by statute; however, there are no statutes
specifically regulating the standards and requirements applicable to peer-to-peer car-sharing.
For-Hire Vehicles
With certain exceptions, offering for lease or rent any motor vehicle in the state qualifies the vehicle as
a "for-hire vehicle." Specifically, s. 320.01(15)(a}, F.S., provides:
"For-hire vehicle" means any motor vehicle, when used for transporting persons or
goods for compensation; let or rented to another for consideration; offered for rent
or hire as a means of transportation for compensation; advertised in a newspaper
or generally held out as being for rent or hire; used in connection with a travel
bureau; or offered or used to provide transportation for persons solicited through
personal contact or advertised on a "share-expense" basis. When goods or
passengers are transported for compensation in a motor vehicle outside a
municipal corporation of this state, or when goods are transported in a motor
vehicle not owned by the person owning the goods, such transportation is "for hire."
The carriage of goods and other personal property in a motor vehicle by a
corporation or association for its stockholders, shareholders, and members,
cooperative or otherwise, is transportation "for hire."
Renting a Motor Vehicle to Another
Current law establishes the requirements for a person (including natural persons and businesses) who
wishes to rent a motor vehicle to another. 3 These include requiring: inspection of the driver license of
the person to whom the vehicle is to be rented; and, comparing and verifying the signature thereon with
the signature of such person written in his or her presence before the vehicle can be rented. Further, a
record must be kept of the registration number of the motor vehicle rented, the name and address of
the person renting, and the number, date, and place of issue.
1
Ch. 2017-12, Laws of Fla.
2
S. 212.0606, F.S.
3
S. 322.38, F.S.,
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Car-Sharing Service
For the purposes of defining the applicability of the rental car surcharge 4 authorized bys. 212.0606,
F.S., a "car-sharing service" is a membership-based organization or business that requires the payment
of an application or membership fee and provides member access to motor vehicles:
• Only at locations that are not staffed by car-sharing service personnel employed solely for the
purpose of interacting with car-sharing service members;
• Twenty-four hours per day, seven days per week;
• Only through automated means, which may include, but are not limited to, smartphone
applications or electronic membership cards;
• On hourly or shorter increments;
• Without a separate fee for refueling the motor vehicle;
• Without a separate fee for minimum financial responsibility liability insurance; and
• Owned or controlled by the car-sharing service or its affiliates.
The car rental surcharge applicable to car-sharing services does not apply to the lease, rental, or usage
of a motor vehicle from a location-owned, operated, or leased by or for the benefit of an airport or
airport authority. 5
Peer-to-Peer Car-sharing
In peer-to-peer car-sharing, owners interested in sharing their vehicles can register as a host on a peer-
to-peer car-sharing site. 6 Sites require photos of the car and help the owner determine a fee based on
the location and type of vehicle. The host then specifies the vehicle's availability. The host may choose
to have the vehicle picked up at his or her house, deliver the vehicle, or have it picked up at another
location, such as an airport. Hosts typically receive between 65 and 75 percent of fees collected on
their behalf by the site from the guest. Payments are typically made to the owner through direct
deposit. 7 The site provides the recordkeeping necessary to the transaction and in compliance with
requirements of law.
Guests also register with the peer-to-peer car-sharing site. The site will conduct a background check
and look at the guests' driving records before approving them. The process involves choosing an
available vehicle, reserving a date and time, and providing credit card information, if it is not already on
file. At the end of the sharing period, the driver replaces any consumed fuel before returning the vehicle
to its pickup location. 8
One peer-to-peer car-sharing website, Turo.com, reports that its company has users in 56 countries in
over 5,500 cities across the world. It also has over 850 makes and models of vehicles and offers up to
$1 million in liability insurance. 9 The average host earns $500 per month. Hosts with three or more
vehicles average over $3,000 per month. 10
4
A rental car surcharge of $2.00 per day for each day of the first 30 days of a car rental and $1.00 per day for a car sharing service, if the rental by
the service is less than 24 hours, is required to be collected and paid to the state. S. 212.0606, F.S.
5 S. 212.0606(2), F.S.
6
Turo, Getaround, and Avail are examples of car sharing websites/applications.
7
Russ Heaps, The Good, Bad and Ugly of Peer-to-Peer Car Sharing, Autotrader, (Feb. 2015), https://www.autotrader.com/car-shopping/good-bad-
and-ugly-peer-peer-car-sharing-234961 (last visited Jan. 25, 2020).
s Id.
9
Turo, About Turo, https://turo.com/en-us/about (last visited Jan. 25, 2020).
10 Id.
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Documentation Required for Operation of a Vehicle
Section 320.0605(1), F.S., requires that at all times while a vehicle is being used or operated on the
roads of Florida, the operator of the vehicle must be in the possession of:
• The registration certificate or an official copy;
• A true copy of rental or lease documentation issued for a motor vehicle or issued for a
replacement vehicle in the same registration period;
• A temporary receipt printed upon self-initiated electronic renewal of a registration via the
Internet; or
• A cab card issued for a vehicle registered under the International Registration Plan.
The certificate or document must be shown upon demand of any authorized law enforcement officer or
agent of the Department of Highway Safety and Motor Vehicles (DHSMV), except for a registered fleet
vehicle. 11 This provision does not apply during the first 30 days after purchase of a replacement vehicle.
A violation is a noncriminal traffic infraction, punishable as a nonmoving violation as provided in
ch. 318, F.S. 12
Section 320.0605(2), F.S., specifies that for a vehicle rented from a motor vehicle rental company, the
rental or lease documentation must include:
• Date of rental and time of exit from rental facility;
• Rental station identification;
• Rental agreement number;
• Rental vehicle identification number;
• Rental vehicle license plate number and state of registration;
• Vehicle's make, model, and color;
• Vehicle's mileage; and
• Authorized renter's name.
Effect of the Bill
The bill creates a new section of the Florida Insurance Code 13 providing requirements for "peer-to-peer
car-sharing," also called "car-sharing" in the bill. Peer-to-peer car-sharing is the authorized use of a
shared vehicle (vehicle or car) through a peer-to-peer car-sharing program (program) by an individual,
the shared vehicle driver (driver), who is not the shared vehicle owner (owner).
"Peer-to-peer car-sharing" does not include the renting of a motor vehicle through a rental company,
the use of a for-hire vehicle, or joint use of motor vehicles, such as ridesharing or carpooling. The bill
defines the term "peer-to-peer car-sharing program" (program) as a business platform that enables
peer-to-peer car-sharing by connecting motor vehicle owners with drivers for financial consideration. It
does not include a rental car company, taxi cab association, the owner of a for-hire vehicle, or a car-
sharing service. 14
11 A fleet vehicle registered under s. 320.0657, F.S., provides for the permanent registration of fleet license plates.
12 Chapter 318, F.S., relates to the disposition of traffic infractions.
13
The Florida Insurance Code is chapters 624-632, 634,635,636,641,642,648, and 651, F.S. S. 624.01, F.S.
14
A "for-hire vehicle" means any motor vehicle, when used for transporting persons or goods for compensation; let or rented to another for
consideration; offered for rent or hire as a means of transportation for compensation; advertised in a newspaper or generally held out as being for rent
or hire; used in connection with a travel bureau; or offered or used to provide transportation for persons solicited through personal contact or
advertised on a "share-expense" basis. When goods or passengers are transported for compensation in a motor vehicle outside a municipal
corporation of this state, or when goods are transported in a motor vehicle not owned by the person owning the goods, such transportation is "for
hire." The carriage of goods and other personal property in a motor vehicle by a corporation or association for its stockholders, shareholders, and
members, cooperative or otherwise, is transportation "for hire." S. 320.0 I (15), F.S.
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Peer-to-Peer Car-Sharing Insurance Requirements
The bill requires the program to ensure that, during each car-sharing period, the owner and driver of the
vehicle have the following minimum coverage for motor vehicle insurance, which are the current
statutory minimums required for private passenger motor vehicles, during peer-to-peer car-sharing
periods:
• Property damage coverage of at least $10,000;
• Bodily injury coverage of at least $10,000 for injury to one person and $20,000 for injury to two
or more persons;
• Personal injury protection of $10,000; and
• Uninsured/underinsured motorist coverage, as required bys. 627.727, F.S. 15
The program must also ensure that the insurance policy either recognizes the use of the vehicle in
peer-to-peer car-sharing or does not exclude shared use. Compliant insurance coverage may be
maintained by the vehicle owner, driver, the program, or any combination thereof, which will be the
primary insurance coverage during periods the vehicle is shared. If the owner's or driver's insurance
lapses or does not provide the required coverage, the program's coverage must provide coverage as if
it were primary from day one, i.e., provide coverage from the first dollar claimed. Further, the program's
coverage must not require that a claim be denied by another insurer. The program is authorized to
maintain multiple insurance policies to meet its obligations. 16
Liabilities and Exclusions
If it is determined that the vehicle owner was in control 17 of the vehicle at the time of a loss, the owner
must indemnify the program to the extent of the insurer's obligation.
During shared periods, the program assumes the liability of the vehicle owner for bodily injury and
property damage to third parties, uninsured/underinsured motorists, and personal injury protection
coverages in the amount specified in the car-sharing agreement, which must meet statutory minimums.
This shifting of liability is void if the owner makes an intentional or fraudulent material misrepresentation
or omission to the program before the sharing period when the loss occurred or if the owner acts in
concert with a vehicle driver who fails to return the vehicle as provided in the peer-to-peer car-sharing
agreement.
If a dispute exists about who was in control of a vehicle at the time of a loss and the program does not
have, did not retain, or fails to provide specific required information, the program will have primary
liability for a claim.
If the owner's insurer defends or indemnifies a claim related to a vehicle that it has excluded from
coverage and for which it is not liable under the bill, the owner's insurer is entitled to contribution from
the program's insurer under certain conditions.
15
While uninsured/underinsured motorist coverage is required to be offered to every purchaser of motor vehicle insurance in this state, the purchaser
may reject such coverage in writing. S. 627.727(1), F.S. Therefore, such insurance is elective.
16
The program has an insurable interest in the shared vehicle. Also, it may meet its insurance obligations by purchasing insurance from an admitted
insurer, which means claims are backed by the Florida Insurance Guaranty Association, in the event the insurer becomes insolvent, or the insurance
may be purchased from an authorized surplus lines company, provided the company carries a minimum rating specified by the bill.
17
See Section III.C. Drafting Issues or Other Comments.
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Exemption from Vicarious Liability
The program and the shared vehicle owner are exempted from vicarious liability under any local or
state law that imposes liability based on vehicle ownership. 18 This means that the actions and liabilities
of the driver cannot be imputed to be those of the program or the vehicle owner.
Motor Vehicle Insurance Policy Exclusions
The bill specifies that a motor vehicle insurer may exclude coverage and the duty to defend or
indemnify any claim under an owner's policy, including, but not limited to, all types of motor vehicle
coverage. The bill provides current insurance policies approved for use in Florida that exclude
coverage of vehicles offered for rent, sharing, or hire or for any business use are not invalidated or
limited.
Notification Regarding Liens
If the vehicle has a lien against it at the time it is registered for use within the program, the program
must notify the owner that using the vehicle for car-sharing may violate the terms of the contract with
the lienholder.
Required Recordkeeping
The program must collect and verify records regarding vehicle use, including the times used, fees paid
by the driver, and revenues received by the owner. These records must be retained for at least the
duration of the statute of limitations for personal injuries and provided on request to the vehicle owner,
the owner's insurer, or the vehicle driver's insurer. The program must also keep the following records: 19
• The name and address of the driver;
• The driver license number of the driver and each other person, if any, who will operate the
vehicle; and
• The place of issuance of the driver license.
Consumer Protections
The peer-to-peer car-sharing agreement must include the following disclosures to the owner and driver:
• Any right of the program to seek indemnification from either the owner or driver for economic
losses due to a breach of contract;
• A motor vehicle insurance policy issued to the owner for the vehicle or to the driver does not
provide a defense or indemnification for any claim asserted by the program;
• The program's insurance is only in effect during the sharing period;
• If the driver uses the vehicle beyond the agreed termination time, the owner and driver may not
have insurance coverage;
• The daily rate, fees, and, if applicable, any insurance or protection package costs that are
charged to the owner or the driver;
• The vehicle owner's motor vehicle liability insurance may exclude coverage for a vehicle;
18
The bill references the federal Graves Amendment, 49 U.S.C. 30106 (2005). The Graves Amendment provides that the owner ofa motor vehicle
who engages in the business of renting or leasing vehicles and has not been negligent or committed a crime is not liable for the damages caused by a
renter/lessee during the rental or lease period merely based on being the owner of the rented or leased vehicle. The Graves Amendment defines owner
as a person who is-
(A) a record or beneficial owner, holder of title, lessor, or lessee of a motor vehicle;
(B) entitled to the use and possession of a motor vehicle subject to a security interest in another person; or
(C) a lessor, lessee, or a bailee of a motor vehicle, in the trade or business of renting or leasing motor vehicles, having the use or possession
thereof, under a lease, bailment, or otherwise.
19 See Section III.C. Drafting Issues or Other Comments.
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• An emergency telephone number of the personnel capable of fielding calls for roadside
assistance and other customer service inquiries; and
• Any conditions under which a vehicle driver must maintain a personal motor vehicle insurance
policy with certain coverage on a primary basis in order to book a vehicle.
The program may not enter into an agreement with a driver, unless the driver:
• Holds a Florida driver license of the type required for the class of vehicle shared;
• Holds a driver license issued by the driver's state or country of the type required for the class of
vehicle and the driver is the minimum age to operate a vehicle in Florida; or
• Is specifically authorized by DHSMV to drive vehicles of the class shared.
The program is solely responsible for program equipment installed in or on the vehicle for the purposes
of allowing use of the vehicle in car-sharing through the program. The program must indemnify the
owner for any damage to or theft of such equipment during share periods that is not caused by the
owner; the program may seek indemnification from the driver for such damage.
Motor Vehicle Safety Recalls
The program must verify the recall and repair status of the vehicle when it is registered for use with the
program. The owner must be notified by the program that: vehicles under recall cannot be shared until
repaired; if the owner receives a recall notice while the vehicle is available for sharing, the vehicle must
be removed from sharing as soon as practicable; and, if the vehicle is in the possession of a driver, the
owner must notify the program as soon as practicable so that it can be repaired. 20
Construction
The bill specifically provides that it does not limit the liability of the program for acts and omissions by
the program that cause bodily harm to a person as a result of peer-to-peer car-sharing. It also provides
that it does not limit the program's right to contract for indemnification from owners or drivers for
economic losses due to a breach of contract.
B. SECTION DIRECTORY:
Section 1. Creates s. 627.7483, F.S., relating to peer-to-peer car sharing; insurance requirements.
Section 2. Provides an effective date of March 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None known.
2. Expenditures:
None known.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None known.
20 Id.
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2. Expenditures:
None known.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Providing specific requirements and delineating insurance obligations and liabilities of the various
parties to a peer-to-peer car-sharing agreement may increase economic activity and avoid litigation
over the scope of each party's liability.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have to
raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
8. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill defines a "shared vehicle owner'' as the registered owner, or a natural person or entity
designated by the registered owner, of a motor vehicle made available for sharing to shared vehicle
drivers through a peer-to-peer car-sharing program. The bill uses the term "shared vehicle owner"
exclusively in the context of the role of the registered owner of the motor vehicle. It does not provide a
separate context for when an individual or entity designated by the owner would act on behalf of the
owner or limit the liability of designated person or entity to only the liabilities that could arise from their
actions performed in the interest of the owner. Therefore, all responsibilities, obligations, and liabilities
that the bill places on the owner are shared by the designee, without limitation. This may create a
situation where a person is designated only to facilitate delivery or return of a vehicle and they become
liable for all of the owner's insurance obligations with respect to the vehicle and the program.
The bill requires the peer-to-peer car-sharing program to ensure that the owner and driver of a vehicle
have uninsured/underinsured motorist coverage as required by law. The uninsured/underinsured
motorist coverage statute is elective. However, on lines 175-182, the bill shifts liability for specified
coverages from the owner to the program, including liability to uninsured/underinsured motorists. This
language implies that the program is required to provide uninsured/underinsured motorist coverage
meeting or exceeding statutory minimums. It is unclear if the intent of the bill is to require
uninsured/underinsured motorist coverage, despite its elective status or to allow the program to accept
arrangements and be free from liability where the owner and or the driver have rejected
uninsured/underinsured motorist coverage.
The bill provides that the "car-sharing termination time" is when agreed use time ends and the vehicle is
returned to the agreed upon location, the vehicle is returned to an alternate agreed upon location, or
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the vehicle owner takes possession and control of the vehicle. In three instances, the bill provides for
limitations or liabilities when the vehicle owner is in control of the vehicle. It is unclear if references to
"in control" and "in possession and control" are intended to have the same meaning. Further, it is
unclear if the term "in control" refers to an individual actively operating the vehicle or if it means the
general responsibility for a vehicle by means of being able to exclude others from its use without
permission. Since a clear understanding of this term is needed to understand the extent of liability
shifting between the owner and the program, the use of the term may need to be clarified.
On lines 289-291, the bill requires designation of personnel capable of fielding calls for roadside
assistance and other customer service inquiries. It is not clear to whom the term "personnel" refers to
for this purpose or who will designate them.
On lines 313-318, the bill specifies certain records that the program must keep. This occurs in a section
titled "Consumer Protections" rather than in an earlier section titled "Recordkeeping." The bill requires
the retention of a non-exclusive list of specified records for a designated period. It is unclear if listing
additional recordkeeping requirements in another portion of the bill is subject to the same retention
period. It may avoid confusion to list all recordkeeping requirements in a single section of the bill.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On January 28, 2020, the Insurance & Banking Subcommittee considered the bill, adopted two
amendments, and reported the bill favorably as a committee substitute. The amendments clarified the term
"person" is a "natural person," for purposes of designating someone to act on behalf of a vehicle owner,
and replaced the term "network" where context indicated that the term should be "peer-to-peer car-sharing
program."
The staff analysis reflects the committee substitute.
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F L O R D A H O U S E 0 F R E P R E S E N T A T I V E S
CS/HB 723 2020
1 A bill to be entitled
2 An act relating to peer-to-peer car sharing; creating
3 s. 627.7483, F.S.; providing definitions; providing
4 motor vehicle insurance requirements for peer-to-peer
5 car sharing; providing that peer-to-peer car-sharing
6 programs have an insurable interest in shared vehicles
7 in specified periods; authorizing peer-to-peer car-
8 sharing programs to own and maintain certain policies
9 of motor vehicle insurance; providing liabilities
10 under certain circumstances; providing applicability;
11 requiring shared vehicle owners' insurers to indemnify
12 networks under certain circumstances; providing
13 exemptions from vicarious liabilities; authorizing
14 motor vehicle insurance policies to exclude specified
15 coverages under certain circumstances; authorizing
16 specified insurers to seek contributions against
17 indemnifications under certain circumstances;
18 providing requirements for notifications of
19 implications of liens; providing requirements for
20 recordkeeping; requiring specified disclosures to
21 shared vehicle drivers and owners; requiring driver
22 license verification and data retention under certain
23 circumstances; providing responsibilities and
24 indemnifications for specified equipment; providing
25 requirements for verification and notification
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/HB 723 2020
26 relating to motor vehicle safety recalls; providing
27 construction; providing an effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Section 627.7483, Florida Statutes, is created
32 to read:
33 627.7483 Peer-to-peer car sharing; insurance
34 requirements.-
35 (1) DEFINITIONS.-As used in this section, the term:
36 (a) "Car-sharing delivery period" means the period of time
37 during which a shared vehicle is being delivered to the location
38 of the car-sharing start time, if applicable, as documented by
39 the governing peer-to-peer car-sharing program agreement.
40 (b) "Car-sharing period" means the period of time that
41 commences either at the car-sharing delivery period or, if there
42 is no car-sharing delivery period, at the car-sharing start time
43 and that ends at the car-sharing termination time.
44 (c) "Car-sharing start time" means the time when the
45 shared vehicle is under the control of the shared vehicle
46 driver, which time occurs at or after the time the reservation
47 of the shared vehicle is scheduled to begin, as documented in
48 the records of a peer-to-peer car-sharing program.
49 (d) "Car-sharing termination time" means the earliest of
50 the following events:
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CS/HB 723 2020
51 1. The expiration of the agreed-upon period of time
52 established for the use of a shared vehicle according to the
53 terms of the peer-to-peer car-sharing program agreement if the
54 shared vehicle is delivered to the location agreed upon in the
55 peer-to-peer car-sharing program agreement;
56 2. The time the shared vehicle is returned to a location
57 as alternatively agreed upon by the shared vehicle owner and
58 shared vehicle driver, as communicated through a peer-to-peer
59 car-sharing program; or
60 3. The time the shared vehicle owner takes possession and
61 control of the shared vehicle.
62 (e) "Peer-to-peer car sharing" or "car sharing" means the
63 authorized use of a motor vehicle by an individual other than
64 the vehicle's owner through a peer-to-peer car-sharing program.
65 For the purposes of this section, the term does not include the
66 renting of a motor vehicle through a rental car company, the use
67 of a for-hire vehicle as defined ins. 320.01(15), ridesharing
68 as defined ins. 341.031(9), carpool as defined ins. 450.28(3),
69 or the use of a motor vehicle under an agreement for a car-
70 sharing service as defined ins. 212.0606(2).
71 ( f) "Peer-to-peer car-sharing program" means a business
72 platform that enables peer-to-peer car sharing by connecting
73 motor vehicle owners with drivers for financial consideration.
74 For the purposes of this section, the term does not include a
75 rental car company, a car-sharing service as defined ins.
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CS/HB 723 2020
76 212.0606(2), a taxicab association, or the owner of a for-hire
77 vehicle as defined ins. 320.01(15).
78 (g) "Peer-to-peer car-sharing program agreement'' means the
79 terms and conditions established by the peer-to-peer car-sharing
80 program which are applicable to a shared vehicle owner and a
81 shared vehicle driver and which govern the use of a shared
82 vehicle through a peer-to-peer car-sharing program. For the
83 purposes of this section, the term does not include a rental
84 agreement or an agreement for a for-hire vehicle as defined in
85 s. 320.01(15) or for a car-sharing service as defined ins.
86 212.0606(2).
87 (h) "Shared vehicle" means a motor vehicle that is
88 available for sharing through a peer-to-peer car-sharing
89 program. For the purposes of this section, the term does not
90 include a rental car, a for-hire vehicle as defined ins.
91 320.01(15), or a motor vehicle used for ridesharing as defined
92 ins. 341.031(9), for carpool as defined ins. 450.28(3), or for
93 car-sharing service as defined ins. 212.0606(2).
94 (i) "Shared vehicle driver" means an individual who has
95 been authorized by the shared vehicle owner to drive the shared
96 vehicle under the peer-to-peer car-sharing program agreement.
97 (j) "Shared vehicle owner" means the registered owner, or
98 a natural person or entity designated by the registered owner,
99 of a motor vehicle made available for sharing to shared vehicle
100 drivers through a peer-to-peer car-sharing program. For the
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101 purposes of this section, the term does not include an owner of
102 a for-hire vehicle as defined ins. 320.01(15).
103 (2) INSURANCE COVERAGE REQUIREMENTS.-
104 (a)l. A peer-to-peer car-sharing program shall ensure
105 that, during each car-sharing period, the shared vehicle owner
106 and the shared vehicle driver are insured under a motor vehicle
107 insurance policy that provides all of the following:
108 a. Property damage liability coverage that meets the
109 minimum coverage amounts required under s. 324.022.
110 b. Bodily injury liability coverage limits as described in
111 s. 324.021(7) (a) and (b).
112 c. Personal injury protection benefits that meet the
113 minimum coverage amounts required under s. 627.736.
114 d. Uninsured and underinsured vehicle coverage as required
115 under s. 627.727.
116 2. The peer-to-peer car-sharing program shall also ensure
117 that the motor vehicle insurance policy under subparagraph 1.:
118 a. Recognizes that the shared vehicle insured under the
119 policy is made available and used through a peer-to-peer car-
120 sharing program; or
121 b. Does not exclude the use of a shared vehicle by a
122 shared vehicle driver.
123 (b)l. The insurance described under paragraph (a) may be
124 satisfied by a motor vehicle insurance policy maintained by:
125 a. A shared vehicle owner;
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126 b. A shared vehicle driver;
127 c. A peer-to-peer car-sharing program; or
128 d. A combination of a shared vehicle owner, a shared
129 vehicle driver, and a peer-to-peer car-sharing program.
130 2. The insurance policy maintained in subparagraph 1.
131 which satisfies the insurance requirements under paragraph (a)
132 is primary during each car-sharing period.
133 3.a. If the insurance maintained by a shared vehicle owner
134 or shared vehicle driver in accordance with subparagraph 1. has
135 lapsed or does not provide the coverage required under paragraph
136 (a), the insurance maintained by the peer-to-peer car-sharing
137 program must provide the coverage required under paragraph (a),
138 beginning with the first dollar of a claim, and must defend such
139 claim, except under circumstances as set forth in subparagraph
140 (3) (a) 2.
141 b. Coverage under a motor vehicle insurance policy
142 maintained by the peer-to-peer car-sharing program must not be
143 dependent on another motor vehicle insurer first denying a
144 claim, and another motor vehicle insurance policy is not
145 required to first deny a claim.
146 c. Notwithstanding any other law, statute, rule, or
147 regulation to the contrary, a peer-to-peer car-sharing program
148 has an insurable interest in a shared vehicle during the car-
149 sharing period. This sub-subparagraph does not create liability
150 for a peer-to-peer car-sharing program for maintaining the
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151 coverage required under paragraph (a) and under this paragraph,
152 if applicable.
153 d. A peer-to-peer car-sharing program may own and maintain
154 as the named insured one or more policies of motor vehicle
155 insurance which provide coverage for:
156 (I) Liabilities assumed by the peer-to-peer car-sharing
157 program under a peer-to-peer car-sharing program agreement;
158 (II) Liability of the shared vehicle owner;
159 (III) Liability of the shared vehicle driver;
160 (IV) Damage or loss to the shared motor vehicle; or
161 (V) Damage, loss, or injury to persons or property to
162 satisfy the personal injury protection and uninsured and
163 underinsured motorist coverage requirements of this section.
164 e. Insurance required under paragraph (a), when maintained
165 by a peer-to-peer car-sharing program, may be provided by an
166 insurer authorized to do business in this state which is a
167 member of the Florida Insurance Guaranty Association or an
168 eligible surplus lines insurer that has a superior, excellent,
169 exceptional, or equivalent financial strength rating by a rating
170 agency acceptable to the office. A peer-to-peer car-sharing
171 program is not transacting in insurance when it maintains the
172 insurance required under this section.
173 (3) LIABILITIES AND INSURANCE EXCLUSIONS.-
174 (a) Liability.-
175 1. A peer-to-peer car-sharing program shall assume
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176 liability, except as provided in subparagraph 2., of a shared
177 vehicle owner for bodily injury or property damage to third
178 parties or uninsured and underinsured motorist or personal
179 injury protection losses during the car-sharing period in an
180 amount stated in the peer-to-peer car-sharing program agreement,
181 which amount may not be less than those set forth in ss.
182 324.021(7) (a) and (b), 324.022, 627.727, and 627.736,
183 respectively.
184 2. The assumption of liability under subparagraph 1. does
185 not apply if a shared vehicle owner:
186 a. Makes an intentional or fraudulent material
187 misrepresentation or omission to the peer-to-peer car-sharing
188 program before the car-sharing period in which the loss occurs;
189 or
190 b. Acts in concert with a shared vehicle driver who fails
191 to return the shared vehicle pursuant to the terms of the peer-
192 to-peer car-sharing program agreement.
193 3. A peer-to-peer car-sharing program shall assume primary
194 liability for a claim when it is in whole or in part providing
195 the insurance required under paragraph (2) (a) and:
196 a. A dispute exists as to who was in control of the shared
197 motor vehicle at the time of the loss; and
198 b. The peer-to-peer car-sharing program does not have
199 available, did not retain, or fails to provide the information
200 required under subsection (5).
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201
202 The shared vehicle owner's insurer shall indemnify the peer-to-
203 peer car-sharing program to the extent of the insurer's
204 obligation, if any, under the applicable insurance policy if it
205 is determined that the shared vehicle owner was in control of
206 the shared motor vehicle at the time of the loss.
207 (b} Vicarious liability.-A peer-to-peer car-sharing
208 program and a shared vehicle owner are exempt from vicarious
209 liability consistent with 49 U.S.C. s. 30106 (2005) under any
210 state or local law that imposes liability solely based on
211 vehicle ownership.
212 (c} Exclusions in motor vehicle insurance policies.-An
213 authorized insurer that writes motor vehicle liability insurance
214 in this state may exclude any and all coverage and the duty to
215 defend or indemnify for any claim afforded under a shared
216 vehicle owner's motor vehicle insurance policy, including, but
217 not limited to:
218 1. Liability coverage for bodily injury and property
219 damage;
220 2. Personal injury protection coverage;
221 3. Uninsured and underinsured motorist coverage;
222 4. Medical payments coverage;
223 5. Comprehensive physical damage coverage; and
224 6. Collision physical damage coverage.
225
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226 This paragraph does not invalidate or limit any exclusion
227 contained in a motor vehicle insurance policy, including any
228 insurance policy in use or approved for use which excludes
229 coverage for motor vehicles made available for rent, sharing, or
230 hire or for any business use.
231 (d) Contribution against indemnification.-A shared vehicle
232 owner's motor vehicle insurer that defends or indemnifies a
233 claim against a shared vehicle which is excluded under the terms
234 of its policy has the right to seek contribution against the
235 motor vehicle insurer of the peer-to-peer car-sharing program if
236 the claim is:
237 1. Made against the shared vehicle owner or the shared
238 vehicle driver for loss or injury that occurs during the car-
239 sharing period; and
240 2. Excluded under the terms of its policy.
241 (4) NOTIFICATION OF IMPLICATIONS OF LIEN.-At the time a
242 motor vehicle owner registers as a shared vehicle owner on a
243 peer-to-peer car-sharing program and before the shared vehicle
244 owner may make a shared vehicle available for car sharing on the
245 peer-to-peer car-sharing program, the peer-to-peer car-sharing
246 program must notify the shared vehicle owner that, if the shared
247 vehicle has a lien against it, the use of the shared vehicle
248 through a peer-to-peer car-sharing program, including the use
249 without physical damage coverage, may violate the terms of the
250 contract with the lienholder.
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251 (5) RECORDKEEPING.-A peer-to-peer car-sharing program
252 shall:
253 (a) Collect and verify records pertaining to the use of a
254 shared vehicle, including, but not limited to, the times used,
255 fees paid by the shared vehicle driver, and revenues received by
256 the shared vehicle owner.
257 (b) Retain the records in paragraph (a) for a time period
258 not less than the applicable personal injury statute of
259 limitations.
260 (c) Provide the information contained in the records in
261 paragraph (a) upon request to the shared vehicle owner, the
262 shared vehicle owner's insurer, or the shared vehicle driver's
263 insurer to facilitate a claim coverage investigation.
264 (6) CONSUMER PROTECTIONS.-
265 (a) Disclosures.-Each peer-to-peer car-sharing program
266 agreement made in this state must disclose to the shared vehicle
267 owner and the shared vehicle driver:
268 1. Any right of the peer-to-peer car-sharing program to
269 seek indemnification from the shared vehicle owner or the shared
270 vehicle driver for economic loss resulting from a breach of the
271 terms and conditions of the peer-to-peer car-sharing program
272 agreement.
273 2. That a motor vehicle insurance policy issued to the
274 shared vehicle owner for the shared vehicle or to the shared
275 vehicle driver does not provide a defense or indemnification for
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276 any claim asserted by the peer-to-peer car-sharing program.
277 3. That the peer-to-peer car-sharing program's insurance
278 coverage on the shared vehicle owner and the shared vehicle
279 driver is in effect only during each car-sharing period and
280 that, for any use of the shared vehicle by the shared vehicle
281 driver after the car-sharing termination time, the shared
282 vehicle driver and the shared vehicle owner may not have
283 insurance coverage.
284 4. The daily rate, fees, and, if applicable, any insurance
285 or protection package costs that are charged to the shared
286 vehicle owner or the shared vehicle driver.
287 5. That the shared vehicle owner's motor vehicle liability
288 insurance may exclude coverage for a shared vehicle.
289 6. An emergency telephone number of the personnel capable
290 of fielding calls for roadside assistance and other customer
291 service inquiries.
292 7. Any conditions under which a shared vehicle driver must
293 maintain a personal motor vehicle insurance policy with certain
294 applicable coverage limits on a primary basis in order to book a
295 shared vehicle.
296 (b) Driver license verification and data retention.-
297 1. A peer-to-peer car-sharing program may not enter into a
298 peer-to-peer car-sharing program agreement with a driver unless
299 the driver:
300 a. Holds a driver license issued under chapter 322 which
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301 authorizes the driver to drive vehicles of the class of the
302 shared vehicle;
303 b. Is a nonresident who:
304 (I) Holds a driver license issued by the state or country
305 of the driver's residence which authorizes the driver in that
306 state or country to drive vehicles of the class of the shared
307 vehicle; and
308 (II) Is at least the same age as that required of a
309 resident to drive; or
310 c. Is otherwise specifically authorized by the Department
311 of Highway Safety and Motor Vehicles to drive vehicles of the
312 class of the shared vehicle.
313 2. A peer-to-peer car-sharing program shall keep a record
314 of:
315 a. The name and address of the shared vehicle driver;
316 b. The number of the driver license of the shared vehicle
317 driver and each other person, if any, who will operate the
318 shared vehicle; and
319 c. The place of issuance of the driver license.
320 (c) Responsibility for equipment.-A peer-to-peer car-
321 sharing program has sole responsibility for any equipment that
322 is put in or on the shared vehicle to monitor or facilitate the
323 peer-to-peer car-sharing transaction, including a GPS system.
324 The peer-to-peer car-sharing program shall indemnify and hold
325 harmless the shared vehicle owner for any damage to or theft of
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326 such equipment during the car-sharing period which is not caused
327 by the shared vehicle owner. The peer-to-peer car-sharing
328 program may seek indemnity from the shared vehicle driver for
329 any damage to or loss of such equipment which occurs during the
330 car-sharing period.
331 (d) Motor vehicle safety recalls.-At the time a motor
332 vehicle owner registers as a shared vehicle owner on a peer-to-
333 peer car-sharing program and before the shared vehicle owner may
334 make a shared vehicle available for car sharing on the peer-to-
335 peer car-sharing program, the peer-to-peer car-sharing program
336 must:
337 1. Verify that the shared vehicle does not have any safety
338 recalls on the vehicle for which the repairs have not been made;
339 and
340 2. Notify the shared vehicle owner that if the shared
341 vehicle owner:
342 a. Has received an actual notice of a safety recall on the
343 vehicle, he or she may not make a vehicle available as a shared
344 vehicle on the peer-to-peer car-sharing program until the safety
345 recall repair has been made.
346 b. Receives an actual notice of a safety recall on a
347 shared vehicle while the shared vehicle is made available on the
348 peer-to-peer car-sharing program, he or she shall remove the
349 shared vehicle as available on the peer-to-peer car-sharing
350 program as soon as practicably possible after receiving the
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351 notice of the safety recall and until the safety recall repair
352 has been made.
353 c. Receives an actual notice of a safety recall while the
354 shared vehicle is in the possession of a shared vehicle driver,
355 he or she shall notify the peer-to-peer car-sharing program
356 about the safety recall as soon as practicably possible after
357 receiving the notice of the safety recall, so that he or she may
358 address the safety recall repair.
359 (7) CONSTRUCTION.-This section does not limit:
360 (a) The liability of a peer-to-peer car-sharing program
361 for any act or omission of the peer-to-peer car-sharing program
362 which results in the bodily injury to a person as a result of
363 the use of a shared vehicle through peer-to-peer car sharing; or
364 (b) The ability of a peer-to-peer car-sharing program to
365 seek, by contract, indemnification from the shared vehicle owner
366 or the shared vehicle driver for economic loss resulting from a
367 breach of the terms and conditions of the peer-to-peer car-
368 sharing program agreement.
369 Section 2. This act shall take effect March 1, 2021.
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COMMERCE COMMITTEE
CS/HB 723 by Rep. Fischer
Peer-to-Peer Car Sharing
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Fischer (Line 76): The amendment clarifies that the bill does not apply
to someone that is using hardware or software that might otherwise be considered a peer-to-
peer car-sharing program, if it is not used to pay for use of a shared vehicle.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 723 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Fischer offered the following:
3
4 Amendment
5 Remove lines 76-77 and insert:
6 212.0606(2), a taxicab association, the owner of a for-hire
7 vehicle as defined ins. 320.01(15), or a service provider who
8 is solely providing hardware or software as a service to a
9 person or entity that is not effectuating payment of financial
10 consideration for use of a shared vehicle.
11
843871 - h0723-line 76.docx
Published On: 2/26/2020 7:22:08 PM
Page 1 of 1
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: HB 771 Motor Vehicle Insurance
SPONSOR(S): Grall
TIED BILLS: IDEN./SIM. BILLS: SB 378
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 13 Y, 1 N Lloyd Cooper
2) Government Operations & Technology 8 Y, 4 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Lloyd •• Hamon
SUMMARY ANALYSIS
The Florida Motor Vehicle No-Fault Law (also known as personal injury protection or PIP) requires owners and
operators to obtain and maintain PIP, which provides $10,000 in medical, disability, and funeral expenses,
without regard to fault, subject to a limit of $2,500 for non-emergency medical care. In exchange for providing
PIP coverage, vehicle owners and operators are immune from tort claims within the limits of the PIP law.
The owner is also required to obtain and maintain coverage of at least $10,000 for property damage (PD). In
response to an accident, they must also provide proof of bodily injury (Bl) coverage. Bl coverage requires the
ability to respond for at least $10,000 in damages due to the bodily injury or death of any one person and
$20,000 for bodily injury or death to two or more persons. An insurance policy or allowable form of self-
insurance is acceptable proof of Bl coverage.
The bill repeals PIP. By repealing PIP, the bill removes the limitation on tort liability provided under PIP. When
drivers are at fault in an accident, they are fully liable for any damages they cause. Due to this change, the bill
expands the scope of legal liabilities covered under an uninsured/underinsured motorist policy.
In place of PIP, Bl coverage is required at the time of registration of a motor vehicle. It increases the minimum
Bl coverage limits to $25,000 in damages due to the bodily injury or death of any one person and $50,000 for
bodily injury or death to two or more persons. The minimum PD coverage limit is not changed. The minimum
security limits for self-insurance of Bl and PD requirements are increased. The bill also increases minimum
coverage limits applicable to garage liability policies and commercial motor vehicle coverage.
The bill requires insurers to offer medical payments coverage prior to issuing the policy, which the prospective
insured may reject in writing. Coverage may be selected at $5,000, $10,000 or in amounts exceeding $5,000.
The insurer may offer deductibles from zero to $500.
Motor vehicle policies issued on or after January 1, 2021, may not include PIP coverage. The bill provides for
continued enforcement of suspensions, revocations, and anti-fraud measures for actions occurring under the
PIP law.
The bill provides for the transition of motor vehicle insurance policies issued prior to January 1, 2021, from PIP
requirements to Bl requirements. In addition, insurers are required to provide their policyholders a notice
describing the effect of the elimination of PIP and change to Bl, by September 1, 2020. The notice is subject to
approval by the Office of Insurance Regulation (OIR).
The bill provides that resident relatives must be included in coverage provided by motor vehicle liability
policies. It also allows insurers to exclude named individuals from coverage. It also allows exclusion of
coverage of motor vehicles that are not identified on the policy, if an individual insured by the policy has owned
the vehicle, or the temporary vehicle was furnished for regular use, for more than 30 consecutive days.
An appropriation of $83,651 is provided to OIR to implement changes made by the bill. The bill has an
indeterminate negative fiscal impact on state revenues and expenditures and no fiscal impact on local
government. The bill has indeterminate positive and negative impacts on the private sector.
The bill is effective January 1, 2020, except as otherwise expressly provided by the bill.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0771d.COM.DOCX
DATE: 2/25/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Financial Responsibility Law
Florida's Financial Responsibility Law requires proof of ability to pay monetary damages for bodily
injury (Bl) and property damage (PD) liability arising out of a motor vehicle accident or serious traffic
violation. 1 The owner or operator of a motor vehicle is not required to provide proof of Bl coverage at
the time of vehicle registration. Motorcycle owners also are not required to provide proof of Bl coverage
at the time of registration. Proof of such coverage is only required after an accident. 2 At that time, a
driver proves financial responsibility by furnishing an active motor vehicle liability policy, a certificate
showing a qualifying security deposit with the Department of Highway Safety and Motor Vehicles
(DHSMV), or proof of qualifying self-insurance. 3
The required minimum amounts of Bl insurance coverages are $10,000, in the event of bodily injury to,
or death of, one person, and $20,000, in the event of bodily injury to, or death of, two or more persons.
The required minimum amount of PD insurance coverage is $10,000, in the event of damage to
property of others, or $30,000 combined for both Bl and PD coverage. 4 Some refer to these coverage
amounts in a summary manner, i.e., $10,000/$20,000/$10,000 or 10/20/10.
A driver's license and vehicle registration are subject to suspension for failure to comply with the PD
coverage requirement. 5 One may obtain driver's license and registration reinstatement by obtaining a
liability policy and by paying a fee to DHSMV. 6
Financial responsibility requirements are common. All states have financial responsibility laws that
require persons involved in auto accidents (or serious traffic infractions) to furnish proof of Bl and PD
liability insurance. The minimum coverage amounts vary among the states.
Florida Motor Vehicle No-Fault Law
Florida's Motor Vehicle No-Fault Law (No-Fault Law)7 requires motorists to carry no-fault insurance
known as personal injury protection (PIP) coverage. The purpose of PIP coverage under the No-Fault
Law is to provide for medical, surgical, funeral, and disability insurance benefits without regard to who
is responsible for a motor vehicle accident. In return for assuring payment of these benefits, the No-
Fault Law provides limitations on the right to bring lawsuits arising from motor vehicle accidents. Florida
motorists are required to carry $10,000 of PIP coverage. 8 However, motorcycles are excluded from this
requirement.
1 Ch. 324, F.S.
2
Ss. 320.02 and 324.011, F.S.
3
Ss. 324.031, 324.061, 324.161, and 324.171, F.S. Businesses that choose to self-insure the financial responsibility requirements must
deposit $30,000 per vehicle, up to a maximum of $120,000, with the DHSMV and maintain excess insurance with limits of
$125,000/$250,000/$300,000. Individuals that choose to self-insure must deposit $30,000 with the DHSMV. Individuals and businesses
can also obtain a certificate of self-insurance to satisfy the financial responsibility requirements. Individuals must have an
unencumbered net worth of $40,000 and businesses must have either an unencumbered net worth of $40,000 for the first vehicle and
$20,000 for each additional vehicle or a sufficient net worth determined by the DHSMV by rule. Currently, the applicable rule provides
that $40,000 for the first vehicle and an amount less than $20,000 for each additional vehicle is sufficient if the applicant carries excess
insurance in the amounts of $25,000/$50,000/$100,000. The amount applicable to each additional vehicle is determined annually under
a "Manual of Financial Responsibility Rates" (Revised 05-89) adopted by rule by the Office of Insurance Regulation. Rule 15A-3.011,
F.A.C.
4
S. 324.022, F.S.
5
S. 324.0221 (2), F.S. Failure to maintain PIP coverage results in suspension of the driver's license and vehicle registration.
6 S. 324.0221 (3), F.S.
7
Ss. 627.730-627.7405, F.S.
8
S. 627.7275, F.S. Under Florida's Financial Responsibility Law (ch. 324, F.S.), motorists must also provide proof of ability to pay
monetary damages for Bodily Injury and Property Damage liability at the time of motor vehicle accidents or when serious traffic
violations occur. The Financial Responsibility Law requires $10,000, per person, and $20,000, per incident, of Bodily Injury coverage,
and $10,000 of Property Damage liability coverage.
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PIP General Provisions
Required Coverage All owners or registrants of motor vehicles with four or more wheels,
except school buses, limos, and taxicabs, are required to carry PIP. 9
Individuals Covered The named insured, relatives living in the same household, persons
operating the vehicle, passengers in the vehicle, and persons struck
and injured while not occupying the vehicle.
Tort Limitation Limited exemption from tort liability; injured persons may pursue
certain tort claims as specified by the PIP law.
Benefits $10,000 in emergency medical and disability benefits (limited to
$2,500 in medical benefits for non-emergency medical conditions) and
$5,000 in death benefits. Coverage of 60 percent of lost income due
to disability, not to exceed the $10,000 overall benefit limitation.
Timely Treatment Medical benefits are paid only if initial treatment is received within 14
days of the accident.
Timely Payment Payments are overdue if not paid within 30 days of insurer receipt of
written notice.
Medical Reimbursement 80 percent of reasonable medical expenses paid to eligible medical
providers. 10
Excluded Treatment Massage and acupuncture are not PIP medical benefits. Services,
supplies, or care that is not reimbursable under Medicare or workers'
compensation is not required to be reimbursed by the insurer.
Attorney Fees Prevailing insureds and beneficiaries may receive a reasonable
attorney fees award.
PIP in Other States
Over the last couple of decades, 24 jurisdictions have repealed their No-Fault laws or made them non-
compulsory.11 Only 17 jurisdictions have compulsory PIP laws. Of those with compulsory PIP laws, only
nine have No-Fault laws. Five jurisdictions, including some that do not have compulsory PIP laws, give
the insured the option to choose No-Fault protections.
Jurisdiction Compulsory PIP No-Fault
Arizona Yes No
Delaware Yes No
District of Columbia No Optional
Florida Yes Yes
Hawaii Yes Yes
Kansas Yes Yes
Kentucky No Optional
Maryland Yes No
Massachusetts Yes Yes
Michigan Yes Yes
Minnesota Yes Yes
9
This includes non-resident owners who keep a vehicle in Florida for more than 90 days during the previous 365 day. S. 627.733(2),
F.S.
10
Insurers may limit reimbursements to a fee schedule tied to the Medicare allowed amount. S. 627.736(5)(a)1., F.S. For many
services, 80 percent of 200 percent of the Medicare allowed amount is the standard reimbursement under this fee schedule.
11
National Association of Insurance Commissioners, Final Auto Study Group Report (Nov. 18, 2014) and Insurance Information
Institute, Compulsory Auto/Uninsured Motorists (Sept. 2017) http://www.iii.org/issue-update/compulsory-auto-uninsured-motorists (last
visited Feb. 1, 2020).
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New Jersey Yes Optional
New York Yes Yes
North Dakota Yes Yes
Oregon Yes No
Pennsylvania No Optional
Texas Yes Optional
Utah Yes Yes
Virgin Islands Yes No
Washington Yes No
Recent Legislative History
The Legislature revised the PIP law multiple times following a Statewide Grand Jury in 2000 that found
rampant fraud in the PIP system. The Legislature enacted PIP reform legislation in 2001 and 2003. The
2003 legislation included a sunset of the PIP law on October 1, 2007. A Governor's veto of a bill
extending the sunset of the law resulted in the law expiring in 2007. Following a 2007 Special Session,
the PIP law was revived effective January 1, 2008. The Legislature again revised the PIP law in 2012.
PIP Reform
The reforms enacted between 2001 and 2012 included:
• Establishing requirements for and limiting access to motor vehicle crash reports;
• Providing limitations on medical services, reimbursement, and eligible providers;
• Requiring provider licensing;
• Requiring pre-suit demand letters;
• Increasing criminal penalties;
• Defining certain activities by claims handlers as unfair and deceptive trade practices;
• Establishing limitations on benefits for emergency and non-emergency medical conditions; and
• Creating limitations on attorney's fees.
The 2012 reform required insurers to make rate filings by October 1, 2012, and January 1, 2014, that
provided a minimum 10 percent and 25 percent decrease in PIP premiums, respectively. However, this
reform permitted insurers to file and the Office of Insurance Regulation (OIR) to approve smaller
decreases or increases, if appropriately justified. This resulted in an estimated average statewide rate
decrease in PIP premiums of 13.2 percent, as of January 22, 2014. This legislation also required OIR
to issue a PIP data call and report the results. OIR reported the data call results on January 1, 2015
(see Recent Reports by OIR, below).
PIP Repeal Proposals
The PIP law has been the subject of multiple repeal proposals over the last several years. The House
considered bills in 2013, 2014, 2015, and 2017 that would have repealed PIP and required increased
Bl coverage under the Financial Responsibility Law. 12 A 2016 bill would have repealed PIP, effective
January 1, 2019, but would have maintained current Bl and PD requirements. Except for 2017, the
House bills died in the Insurance & Banking Subcommittee. CS/HB 1063 (2017) passed the House on
April 19, 2017, and died in the Senate Appropriations Subcommittee on Health and Human Services.
Recent Changes
As part of a pair of broader insurance related bills, the Legislature amended the PIP law in 2015 and
2016. HB 165 (2015) clarified the application of the PIP medical reimbursement fee schedule. HB 165
(2015) and HB 659 (2016) each created an additional exemption from a licensure requirement under
the PIP law that permits reimbursement of certain health care clinics for PIP related medical services.
12
Ch. 324, F.S.
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Recent Reports by OIR
PIP Data Call
The 2012 reform, HB 119, required OIR to perform a comprehensive data call regarding PIP. Thirty-five
insurers representing 83.5 percent of the market participated in the data call. This included the top 25
insurers, by market share. The report did not rely on information from several insurers due to data
quality issues. OIR published their analysis of the data call on January 1, 2015. The report provided
detailed information on seven of the eight required elements mentioned in the bill. The bill required the
report to address, at a minimum, the following points:
1. Quantity of personal injury protection claims.
2. Type or nature of claimants.
3. Amount and type of personal injury protection benefits paid and expenses incurred.
4. Type and quantity of, and charges for, medical benefits.
5. Attorney fees related to bringing and defending actions for benefits.
6. Direct earned premiums for personal injury protection coverage, pure loss ratios, pure premiums,
and other information related to premiums and losses.
7. Licensed drivers and accidents.
8. Fraud and enforcement.
The published report did not include detail or analysis regarding item 5. However, the report included
limited information about insurer costs related to defense of claims, which includes attorney fees. OIR
documented and analyzed all other items in detail.
While OIR did not provide a summary of their findings in the body of the report, they summarized their
findings in a press release dated January 5, 2015, 13 as follows:
The findings showed a general decrease in the per claim costs and the overall
number of claims (frequency and severity) for PIP since the implementation of
HB 119 on January 1, 2013. The regional analysis concludes that South Florida
and the Tampa/St. Petersburg regions experienced the most significant
decreases in Florida. However, the data also exposed that other coverages, such
as Bodily Injury (81) and Uninsured Motorists (UM), experienced increases in
both frequency and severity when some benefits covered under PIP moved to
these coverages. These trends are expected to continue over the next year.
Prior to 2012 and the passage of this law, the pervasive nature of PIP fraud and
staged auto accidents created an unsustainable cost trajectory of PIP claims.
The Division of Insurance Fraud (DIF), within the Department of Financial
Services (DFS), is responsible for investigating this type of fraud. According to
the DIF, there has been a substantial decline in PIP fraud since the
implementation of HB 119 with a projected 16% decrease during Fiscal Year
2013 - 2014 from Fiscal Year 2011 -2012.
The Office also compiled a summary of the rate filings effective on or after
January 1, 2011 for the top 25 insurers representing 80.9% of the total personal
auto market in Florida. These filings were segregated into two sets of data: Pre-
HB 119 and Post-HS 119 (to include all filings submitted since, and including, the
first required HB 119 filing due on October 1, 2012). The average statewide
approved rate changes were:
13 FLORIDA OFFICE OF INSURANCE REGULATION, News Releases, Office Releases Personal Injury Protection (PIP) Insurance Data Call
Report, http://www.floir.com/PressReleases/viewmediarelease.aspx?id=2094 (last visited Feb. 1, 2020).
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Pre-HB 119 HB 119
PIP +46.3% -13.6%
Liability (incl. PIP) +20.9% -0.5%
Overall (incl. Comp. & Coll.) +12.9% -0.1%
The report noted many insurers had residual rate need due to deteriorating PIP
experience prior to the implementation of the bill that were used to offset some of
the expected savings from HB 119. For an individual policyholder, the rate
changes may vary considerably from the statewide averages listed above, taking
into account other factors, such as differences by insurer, by territory, etc.
Overall, there was limited data available to determine the true impact of HB 119;
however, the data call analysis reveals the law has had a major impact on the
personal auto market and changed the trajectory of trends being seen prior to its
enactment.
The report also documented an increase in the frequency of automobile crashes in Florida during 2013
and 2014. Data from the DHSMV shows that this trend continued through 2015. OIR reported that
crash frequency per 100 licensed drivers in Florida had dropped by 13.7 percent from 2004 to 2011. In
2011, there were 1.48 crashes per 100 licensed drivers. For 2015, crash frequency increased over 61
percent to 2.40 crashes per 100 licensed drivers.
OIR Cost Projection on Certain PIP Reform Proposals
In June 2016, OIR contracted with Pinnacle Actuarial Resources (Pinnacle) for actuarial services to
produce a "Review of PIP Legislation." 14 The objective of the review was to "provide a draft and final
report documenting [a] comprehensive study on the effect of HB 119 and the potential impact to
Floridians if the personal injury protection coverage requirements were repealed and replaced with
varying levels of Bodily Injury coverage, or if the current requirements to purchase auto insurance were
completely repealed." Pinnacle is the same vendor that produced the 2012 rate impact analysis that
was required by HB 119 (2012). 15
Pinnacle issued their report on September 13, 2016. 16 They found that:
• The study of HB 119 evaluated sixteen provisions of the bill and concluded that the HB 119 reforms
produced an estimated aggregate savings since enactment in PIP claim costs of 17.5 percent and
an estimated statewide average savings in PIP premiums of 15.1 percent.
• If no-fault insurance were repealed in Florida, there could be an estimated overall reduction in
premiums of 9.6 percent on the liability coverage package or $81 per car annually for the average
driver. For a// coverages combined, the estimated premium decrease is 6.7 percent.
• Finally, an analysis of premium impacts if the requirement to purchase auto insurance was repealed
in addition to the repeal of no-fault insurance found there could be an estimated additional reduction
in the PIP repeal savings of 0.2 percent to 0.4 percent.
Pinnacle also provided estimates that considered the outcome if the consumer purchased Medical
Payments (Med Pay) coverage, at either $2,500 or $5,000 coverage limits, and if the Bl limit was
increased by law to $25K/$50K. The following table illustrates the estimated savings in each scenario.
14
DFS OIR RFP 15/16-15, Actuarial Consulting Services for Review of PIP Legislation.
15 In 2012, Pinnacle Actuarial Resources, Inc., was retained by OIR to conduct an independent actuarial study to calculate the savings to
be expected because of HB 119 (2012). S. 15, HB 119 (2012). OIR published the report on August 21, 2012. FLORIDA OFFICE OF
INSURANCE REGULATION, Press Release, http://www.floir.com/PressReleases/viewrnediarelease.aspx?id=1956 (last visited Feb. 1, 2020).
16
Pinnacle Actuarial Resources, Inc., Florida Office of Insurance Regulation: Review of Personal Injury Protection Legislation, Sept. 13,
2016, available at https://www.floir.com/siteDocurnents/FLOIRReviewPIP20160913.pdf (last visited Feb. 1, 2020).
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Estimated Savings on Auto Insurance Premiums, by Scenario
Situation Coverage Type Require 81 at $1 OK/$20K Require 81 at $25K/$50K
Liabilities, only 17 9.6% 8.1%
PIP repeal
Overall 6.7% 5.6%
PIP repeal and Liabilities, only 4.9% 3.4%
$2,500 Med Pay Overall 3.4% 2.4%
PIP repeal and Liabilities, only 1.0% -0.5%
$5,000 Med Pay Overall 0.7% -0.3%
Overview of Colorado PIP Insurance Reform
Colorado had a no-fault auto insurance law from 1974 to 2003. In reaction to increasing costs of auto
insurance, including a 38 percent increase in auto premiums from 1992 to 2002, Colorado repealed
their no-fault law, effective July 2003. Colorado now handles crash liabilities through the tort system.
Under the tort system, the person at fault in an auto crash is responsible for paying the losses of the
victim and the victim enforces their rights in civil court.
Prior to the change, Colorado had the ninth highest premium per insured auto in the nation. For 2014
(the most current year available), Colorado had the 21 51 highest auto premium in the nation. According
to the Colorado Legislative Council Staff, auto premiums in the state as of January 2007 had
decreased ten to 14 percent following the elimination of the no-fault system. 18
In comparison, according to data from the National Association of Insurance Commissioners and
reported by the Insurance Information Institute, from 2006 through 2014, Florida has consistently
ranked fifth in the nation for highest average auto insurance cost per vehicle. Florida ranked as low as
sixth in 2009 and 2014 and as high as fourth in 2008 and 2012, with the remaining years being ranked
fifth. 19
Colorado Florida
Percent Percent
Average Auto National Average Auto National
Change over Change over
Premium Cost Rank Premium Cost Rank
2002 Cost 2003 Cost
2002 $921.00 9 n/a n/a
2003 $923.00 12 $1,018.00 5
2004 $850.00 18 -7.7% $1,062.00 5 4.3%
2005 $829.00 21 -10.0% $1,064.00 6 4.5%
2006 $785.00 23 -14.8% $1,069.00 5 5.0%
2007 $738.00 24 -19.9% $1,043.00 5 2.5%
2008 $728.67 26 -20.9% $1,054.89 5 3.6%
2009 $741.28 22 -19.5% $1,006.20 6 -1.2%
2010 $730.42 25 -20.7% $1,037.36 5 1.9%
2011 $723.61 27 -21.4% $1,090.58 5 7.1%
2012 $737.95 25 -19.9% $1,128.53 4 10.9%
2013 $777.95 23 -15.5% $1,143.73 5 12.4%
2014 $821.19 21 -10.8% $1,140.84 6 12.1%
17
"Liabilities, only" includes Bodily Injury, Personal Injury Protection, Uninsured Motorist, and Property Damage coverages.
18 Colorado Legislative Council, Issue Brief Number 07-01, Automobile Insurance in Colorado, Jan. 2007.
19 INSURANCE INFORMATION INSTITUTE, Auto Insurance, Costs and Expenditures, http://www.iii.org/table-archive/21247 (last visited Feb. 1,
2020).
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Private Passenger Auto Insurance Requirement Comparison
Colorado Florida
$10,000 medical, disability and funeral
No-fault/PIP None Non-emergency medical limited to $2,500
Mandatory for vehicle registration
$10,000 per person,
$25,000 per person, $20,000 per accident, or
Bodily Injury or
$50,000 per accident $30,000 single limit
Death
Mandatory for vehicle registration Mandatory, may be secured post-
reoistration
$15,000 $10,000
Property Damage
Mandatory for vehicle registration Mandatory for vehicle registration
Uninsured/Under- Mandatory offer at Bl/PD limits, written Mandatory coverage at Bl limits, if Bl
insured Motorist rejection required purchased; written rejection required
$5,000 mandatory offer, written rejection
Medical Payment Optional
required
Impacts of the Colorado Reform
In February 2008, the Office of the Governor of Colorado published a report that studied the impacts of
the repeal of the no-fault system on auto insurance, health insurance, the trauma system, Medicaid and
Colorado Indigent Care Program, and consumers. 20 The report's findings include the following:
AUTO INSURANCE
• For the eight largest auto insurers in Colorado by market share, average auto insurance premiums
declined 35 percent from July 2003 to December 2007.
• The average premium decrease attributable to the elimination of PIP was 22 percent immediately
following the repeal of no-fault. 21
• Colorado's national rank for average annual auto insurance premium per vehicle fell following the
repeal.
• Premiums for each of the non-PIP auto coverage types increased, except comprehensive coverage
(no baseline data was available for medical payment coverage, so the effect was unknown).
• Ninety-nine percent of Colorado auto insurers were offering medical payment coverage post-reform
and 31 percent of consumers were purchasing this coverage.
HEAL TH INSURANCE
• Based on the responses of health insurers (totaling 1.57 million policyholders) to a 2003 survey by
the Colorado Division of Insurance, health insurance premiums increased by an estimated 1.6
percent.
TRAUMA SYSTEM
Hospitals
• The report could not quantify the impact on acute care hospital reimbursements for emergency and
outpatient services.
• Comparing payments for 2002 to those for 2006 for inpatient care of auto accident patients at acute
care hospitals, the percentage of payments from private insurance, which includes both auto and
health insurance, decreased by about one third (75.4 percent for 2002 and 49.3 percent for 2006).
20 BBC Research & Consulting, Auto Insurance/Trauma System Study, 5, Feb. 2008.
21
Information in Issue Brief Number 07-01 and the Auto Insurance/Trauma System Study are seemingly at odds regarding the change
in auto premiums post-reform. The reason for the difference may be that Issue Brief Number 07-01 is referencing the change in
average premiums for Colorado overall at January 2007 and the Auto Insurance/Trauma System Study is only focused on the eight
largest auto insurers in Colorado at December 2007.
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The proportion of payment by all other payer types increased. The greatest increase was in self-
payment (13.4 percent in 2002 and 27.2 percent in 2006). Self-payment may also include self-filing
of insurance. Medicare showed the next highest increase (2.9 percent in 2002 and 7.7 percent in
2006).
o A similar pattern was seen in all inpatient cases; however, the amount of the decrease in the
proportion of private insurance payments was much less (51.1 percent for 2002 and 46.6
percent for 2006).
• The reimbursement rate (percent of charge reimbursed) for acute care hospital inpatient auto crash
patients fell from 60 percent to 36 percent for hospitals that responded to a survey. The report
asserted the cause of the reduction to be more patients without insurance and, for patients with
insurance, more payments based on negotiated rates (non-PIP insurers allegedly rely more on
negotiated rates).
Emergency Medical First Responders
• Based on a small sample of first responders, i.e., those that could provide detailed billing and
reimbursement information, non-reimbursed charges increased 37 percent for 2006 over 2002.
Governmental first responders indicated that they made up deficits related to lower patient
care/transfer reimbursements from non-user sources such as taxes and general fund transfers.
• The average number of days to collect first responder payment on auto crash related cases
increased from 74 days in 2002 to 144 days in 2006.
MEDICAID AND COLORADO INDIGENT CARE PROGRAM
• Medicaid - the Medicaid program's exposure to auto crash claims increased, but the report could
not quantify the cost.
• Colorado Indigent Care Program - while exposure was increased, caps on the federal and state
portions of the program's funding limited increases in expenditures. This increased unreimbursed
provider charges.
Effect of the Bill
Effective January 1, 2021, the bill repeals portions of the Florida Motor Vehicle No-Fault Law (PIP).
However, it provides for continued enforcement of suspensions, 22 revocations, and anti-fraud measures
for actions occurring under the No-Fault Law.
Changes to Financial Responsibility
Beginning January 1, 2021, proof of compliance with the Financial Responsibility Law (Bl coverage) is
required at the time of registration of a motor vehicle, 23 instead of post-registration or at the time of an
accident as is currently required. It increases the minimum Bl coverage limits from $10,000 per person
and $20,000 per incident to $25,000 per person and $50,000 per incident. The minimum PD coverage
limit is not changed. 24 This results in required 25/50/10 coverage in most instances.
The bill increases minimum security limits for self-insurance of financial responsibility requirements in
the following ways:
• Certificate of deposit for individuals and businesses: 25
o increased from $30,000 per vehicle (max. $120,000) to $60,000 per vehicle (max. $240,000). In
addition, such person must maintain motor vehicle liability policy in excess of the certificate of
22 The bill also expands DHSMV's authority to suspend the registrations and licenses of drivers who fail to maintain Bl when required
under ss. 324.023 (DUI conviction), 324.032 (for-hire transportation), 627.7415 (commercial motor vehicles), and 627.742, F.S. (non-
public sector buses), and who fail to carry proof of Bl when operating a motor vehicle.
23 Proof of compliance with the Financial Responsibility Law does not change for motorcycles.
24
The allowed combined coverage limit of $30,000 for property damage and bodily injury is increased to $60,000.
25 Proof of the certificate of deposit maintained in a financial institution insured by the Federal Deposit Insurance Corporation or the
National Credit Union Administration must be submitted annually to DHSMV.
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deposit providing bodily injury coverage of $125,000, per person, $250,000, per accident, and
$50,000 for property damage, or $300,000, combined property damage and bodily injury.
• Certificate of self-insurance - minimum unencumbered net worth increases from:
o For individuals - $40,000 to $100,000, and
o For businesses - $40,000 for the first vehicle and $20,000 for each additional vehicle to
$100,000 and $50,000, respectively. 26
Garage Liability Insurance - The bill increases minimum security limits for garage liability insurance
from $25,000 combined single limit for bodily injury and property damage to $60,000 combined.
For-Hire Passenger Transportation Vehicle - no change; current 125/250/50.
Commercial Motor Vehicles - minimum combined bodily injury and property damage coverage:
• For vehicles between 26,000 pounds and 35,000 pounds - increases from $50,000 per
occurrence to $60,000 per occurrence,
• For vehicles 35,000 pounds or more but less than 44,000 pounds - no change ($120,000 per
occurrence), and
• For vehicles between 44,000 pounds or more - no change ($300,000 per occurrence).
Non-public Sector Buses - no change; current 100/300/50 or combined 300.
Transportation Network Companies - no change; current 50/100/25 when logged on, but no rider, and
$1 million when connected to a rider.
Transition of Coverages
The bill provides for the transition of motor vehicle insurance policies into compliance with the changes
made by the bill if the policies were issued prior to January 1, 2021, but are in force on that date. Those
issued on or after January 1, 2021, are prohibited from including PIP coverage. In force policies that
were issued in compliance with law at the time of issuance are deemed to meet the new requirements
until renewed, nonrenewed, or canceled. Insurers are required to allow policyholders with PIP coverage
to obtain Bl coverage that complies with the changes made by the bill without charge other than
changes in premium due. Payment of the change in premium and refunds, if either result from the
change in coverage, depending upon the actual coverages on the policy, are required.
Notice Requirements
Insurers are required to provide a notice, by September 1, 2020, informing motor vehicle policyholders
that effective January 1, 2021:
• The Florida Motor Vehicle No-Fault Law (PIP) is repealed January 1, 2021,
• The policyholder is no longer required to carry PIP coverage,
• PIP is no longer available for purchase,
• New or renewal coverage will not include PIP,
• New Bl requirements begin on January 1, 2021, which are 25/50/10,
• That insurers must offer medical payments coverage with selectable limits of $5,000 and $10,000,
or at limits greater than $5,000; optional deductible of $500; death benefit of $5,000; and describe
the nature of medical payments coverage,
• A policyholder may obtain uninsured/underinsured motorist coverage to protect themselves and
their insureds from damages caused by an uninsured/underinsured driver,
• Policies that comply with the requirements of law at the time of issue are deemed to meet the new
requirements, until the policy is renewed, nonrenewed, or canceled,
26 In the alternative, businesses may qualify for self-insurance by maintaining a sufficient net worth determined annually by DHSMV by
rule. S. 324.171, F.S.
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• They may change their policy to comply with the new requirements, and
• They may contact the name and telephone number provided in the notice with questions.
The notice is also required to state that PIP provides medical payments coverage for the policyholder,
passengers, and resident relatives, 27 while Bl protects the insured against loss if they are at fault in an
accident and are legally responsible for bodily injuries or deaths of others. The notice is subject to
approval by OIR.
Optional Medical Payments Coverage
The bill requires motor vehicle insurers to offer medical payments coverage before issuing an initial
policy. Unless the insured rejects medical payments coverage in writing, medical payments coverage is
deemed included with $10,000 in coverage.
The insurer is required to offer:
• A $5,000 coverage limit,
• A $10,000 coverage limit, or
• Coverage limits exceeding $5,000.
The insurer is allowed to offer medical payments coverage deductibles from zero to $500. The insurer
must notify the policyholder annually of the availability of medical payments coverage.
The bill establishes insurer reserve requirements tied to medical payments coverage claims. Medical
payments coverage benefits are not a lien on personal recoveries associated with the claim event, nor
does the insurer have a right to sue a recipient of medical coverage payments unless the payments
were the result of fraud. The insurer may claim subrogation rights against persons that are not insured
on the policy, but the right is subordinate to the insured's own right against such person. The insurer
may recover from an insured who receives full payment for damages that impairs the insurer's
subrogation rights in specified circumstances. Death benefits may not be subrogated.
Named Driver Exclusion
The bill provides that resident relatives must be included in coverage provided by motor vehicle liability
policies, but authorizes insurers and policyholders to exclude named drivers, including a resident
relative, from a private passenger motor vehicle insurance policy. An individual is not covered for
damages that occur while operating a motor vehicle that is insured under a policy that excludes the
individual by name. The bill prohibits exclusion for periods when the excluded named driver is not
operating a motor vehicle covered under the policy (e.g., when they are a passenger in the vehicle}, if
the exclusion is unfairly discriminatory by law, as determined by the OIR, or if the exclusion is
inconsistent with the underwriting guidelines filed by the insurer with OIR. The exclusion of a named
driver is contingent upon the written consent of a policyholder. The bill requires insurers to list excluded
named drivers on the policy's declarations page or on a policy endorsement. Individuals who are
named as excluded drivers on a particular policy may secure their insurance obligations under another
policy.
Newly Acquired and Temporary Substitute Motor Vehicles
The bill allows insurers to exclude coverage of motor vehicles not named on a policy if the vehicle does
not qualify as a "newly acquired vehicle" 28 or "temporary substitute" 29 vehicle and was owned by the
insured or given to them for their use for more than 30 days prior to the claim event.
27
A "resident relative" is defined as "a person related to a named insured by any degree by blood, marriage, or adoption, including a
ward or foster child, who usually makes her or his home in the same family unit as the named insured, whether or not he or she is
temporarily living elsewhere."
28
"Newly acquired vehicle" means a vehicle owned by a named insured or resident relative of the named insured which was acquired
within 30 days before an accident.
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Rate Filings
Initial insurer rate filings for motor vehicle liability submitted to OIR on or after January 1, 2021, are
required to be based on the new requirements and may only be approved through the file and use
approval process.
Tort Liability
By repealing PIP, the bill removes the limitation on tort liability provided under PIP. When drivers are at
fault in an accident, they are fully liable for any damages they cause. Due to this change, the bill
removes the conditional exclusion 30 of tort damages for pain, suffering, mental anguish, and
inconvenience. Beginning January 1, 2021, the bill makes uninsured motorist insurers subject to tort
damages for pain, suffering, disability or physical impairment, disfigurement, mental anguish,
inconvenience, and the loss of capacity for the enjoyment of life experienced in the past and to be
experienced in the future.
Appropriation
The bill appropriates $83,651 from the Insurance Regulatory Trust Fund to OIR to implement changes
made by the bill.
B. SECTION DIRECTORY:
Section 1: Repeals ss. 627.730, 627.731, 627.7311, 627.732, 627.733, 627.734, 627.736, 627.737,
627.739, 627.7401, 627.7403, and 627.7405, F.S., relating to Florida Motor Vehicle No-
Fault Law.
Section 2: Repeals s. 627.7407, F.S., relating to application of the Florida Motor Vehicle No-Fault
Law.
Section 3: Amends s. 316.646, F.S., relating to security required; proof of security and display
thereof.
Section 4: Amends s. 318.18, F.S., relating to amount of penalties.
Section 5: Amends s. 320.02, F.S., relating to registration required; application for registration; forms.
Section 6: Amends s. 320.0609, F.S., relating to transfer and exchange of registration license plates;
transfer fee.
Section 7: Amends s. 320.27, F.S., relating to motor vehicle dealers.
Section 8: Amends s. 320.771, F.S., relating to license required of recreational vehicle dealers.
Section 9: Amends s. 322.251, F.S., relating to notice of cancellation, suspension, revocation, or
disqualification of license.
Section 10: Amends s. 322.34, F.S., relating to driving while license suspended, revoked, canceled, or
disqualified.
Section 11: Amends s. 324.011, F.S., relating to purpose of chapter.
Section 12: Amends s. 324.021, F.S., relating to definitions; minimum insurance required.
Section 13: Amends s. 324.022, F.S., relating to financial responsibility for property damage.
Section 14: Amends s. 324.0221, F.S., relating to reports by insurers to the department; suspension of
driver license and vehicle registrations; reinstatement.
Section 15: Creates s. 324.0222, F.S., relating to application of suspensions for failure to maintain
security; reinstatement.
29 "Temporary substitute vehicle" means any motor vehicle as defined in s. 320.01 (1) which is not owned by the named insured and
which is temporarily used with the permission of the owner as a substitute for the owned motor vehicle designated on the policy when
the owned vehicle is withdrawn from normal use because of breakdown, repair, servicing, loss, or destruction.
30 An uninsured motorist coverage insurer is liable for tort damages for pain, suffering, mental anguish, and inconvenience if the
damages exceed the "verbal threshold" provided ins. 627.737(2)(a)-(d), F.S. The verbal threshold allows a plaintiff to recover such
damages if the injury or disease consists in whole or in part of:
• Significant and permanent loss of an important bodily function.
• Permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.
• Significant and permanent scarring or disfigurement.
• Death.
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Section 16: Amends s. 324.023, F.S., relating to financial responsibility for bodily injury or death.
Section 17: Amends s. 324.031, F.S., relating to manner of proving financial responsibility.
Section 18: Amends s. 324.032, F.S., relating to manner of proving financial responsibility; for-hire
passenger transportation vehicles.
Section 19: Amends s. 324.051, F.S., relating to reports of crashes; suspensions of licenses and
registrations.
Section 20: Amends s. 324.071, F.S., relating to reinstatement; renewal of license; reinstatement fee.
Section 21: Amends s. 324.091, F.S., relating to notice to department; notice to insurer.
Section 22: Amends s. 324.151, F.S., relating to motor vehicle liability policies; required provisions.
Section 23: Amends s. 324.161, F.S., relating to proof of financial responsibility; deposit.
Section 24: Amends s. 324.171, F.S., relating to self-insurer.
Section 25: Amends s. 324.251, F.S., relating to short title.
Section 26: Amends s. 400.9905, F.S., relating to definitions.
Section 27: Amends s. 400.991, F.S., relating to license requirements; background screenings;
prohibitions.
Section 28: Amends s. 400.9935, F.S., relating to clinic responsibilities.
Section 29: Amends s. 409.901, F.S., relating to definitions.
Section 30: Amends s. 409.910, F.S., relating to responsibility for payments on behalf of Medicaid-
eligible persons when other parties are liable.
Section 31: Amends s. 456.057, F.S., relating to ownership and control of patient records; report or
copies of records to be furnished; disclosure of information.
Section 32: Amends s. 456.072, F.S., grounds for discipline; penalties; enforcement.
Section 33: Amends s. 626.9541, F.S., relating to unfair methods of competition and unfair or
deceptive acts or practices defined.
Section 34: Amends s. 626.989, F.S., relating to investigation by department or Division of
Investigative and Forensic Services; compliance; immunity; confidential information;
reports to division; division investigator's power of arrest.
Section 35: Amends s. 627.06501, F.S., relating to insurance discounts for certain persons completing
driver improvement course.
Section 36: Amends s. 627.0651, F.S., relating to making and use of rates for motor vehicle insurance.
Section 37: Amends s. 627.0652, F.S., relating to insurance discounts for certain persons completing
safety course.
Section 38: Amends s. 627.0653, F.S., relating to insurance discounts for specified motor vehicle
equipment.
Section 39: Amends s. 627.4132, F.S., relating to stacking of coverages prohibited.
Section 40: Amends s. 627.7263, F.S., relating to rental and leasing driver's insurance to be primary;
exception.
Section 41: Creates s. 627.7265, F.S., relating to motor vehicle insurance; medical payments
coverage.
Section 42: Amends s. 627.727, F.S., relating to motor vehicle insurance; uninsured and underinsured
vehicle coverage; insolvent insurer protection.
Section 43: Amends s. 627.7275, F.S., relating to motor vehicle liability.
Section 44: Creates s. 627.7278, F.S., relating to applicability and construction; notice to
policyholders.
Section 45: Amends s. 627.728, F.S., relating to cancellations; nonrenewals.
Section 46: Amends s. 627.7295, F.S., relating to motor vehicle insurance contracts.
Section 47: Amends s. 627.7415, F.S., relating to commercial motor vehicles; additional liability
insurance coverage.
Section 48: Creates s. 627.747, F.S., relating to named driver exclusion.
Section 49: Effective upon becoming law, amends s. 627.748, F.S., relating to transportation network
companies.
Section 50: Amends s. 627.749, F.S., relating to autonomous vehicles; insurance requirements.
Section 51: Amends s. 627.8405, F.S., relating to prohibited acts; financing companies.
Section 52: Amends s. 627.915, F.S., relating to insurer experience reporting.
Section 53: Amends s. 628.909, F.S., relating to applicability of other laws.
Section 54: Amends s. 705.184, F.S., relating to derelict or abandoned motor vehicles on the premises
of public-use airports.
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Section 55: Amends s. 713.78, F.S., relating to liens for recovering, towing, or storing vehicles and
vessels.
Section 56: Amends s. 817.234, F.S., relating to false and fraudulent insurance claims.
Section 57: Makes an appropriation.
Section 58: Provides an effective date of January 1, 2021, except as otherwise expressly provided by
the bill.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
Indeterminate. Premium tax revenues may be affected to the extent that lost revenues associated
with PIP premiums are offset by changes in revenues associated with expected increases in Bl
premiums.
2. Expenditures:
Indeterminate. Hospitals may experience increased costs to the extent that medical
reimbursements previously funded through PIP are shifted to secondary coverages or are lost
through lack of secondary coverage. OIR is required to approve new forms and rates related to
medical payments coverage and will receive filings to implement the coverage changes made by
the bill. The bill appropriates $83,651 to OIR for this purpose.
There will be impacts related to Florida Driver License Information System and MyDMV Portal and
Mainframe within the Department of Highway Safety and Motor vehicles. There will be programming
needed to modify the Financial Responsibility process to replace Personal Injury Protection with
Bodily Injury, as specified in the bill. 31 However, these modifications can be completed utilizing
existing department resources. 32
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
Indeterminate. Local governments are likely to achieve savings on motor vehicle insurance,
depending upon the amount of coverage secured. Local governments operating hospitals may
experience increased costs to the extent that medical reimbursements previously funded through
PIP are shifted to secondary coverages or are lost through lack of secondary coverage.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Indeterminate. Motor vehicle insurers are required to file new forms and rates and adjust their practices
consistent with the changes made by the bill. Individuals and businesses must secure coverage that
complies with these changes, as well.
In a September 2016 report from OIR, Pinnacle Actuarial Resources estimated the premium impacts of
PIP repeal on consumers that carry a complete set of automobile insurance coverages. 33 Pinnacle also
provided estimates that considered the outcome if the Bl limit increased by law to 25/50. They
estimated that consumers might save 8.1 percent in liabilities only34 premiums and 5.6 percent in
31
Highway Safety and Motor Vehicles, Agency Analysis of 2020 SB 378, p. 6 (Oct. 30, 2019).
32 Email from Susan Carey, Chief Financial Officer, Florida Department of Highway Safety and Motor Vehicles, RE: HB 771 Motor
Vehicle Insurance Fiscal (Feb. 6, 2020).
33 Supra note 16 at app. 3, p. 1 (p. 272).
34
"Liabilities, only" includes Bodily Injury, Personal Injury Protection, Uninsured Motorist, and Property Damage coverages.
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overall motor vehicle premiums or $68.12 per car annually. Pinnacle also projected some negative
impact on health care providers and health care insurance premiums due to the elimination of PIP.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking, but any rules that reference personal
injury protection or restate bodily injury coverage requirements that are changed by the bill may require
revision.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
HB 771 2020
1 A bill to be entitled
2 An act relating to motor vehicle insurance; repealing
3 ss. 627. 730, 627. 731, 627. 7311, 627. 732, 627. 733,
4 627. 734, 627. 736, 627. 737, 627. 739, 627. 7401,
5 627.7403, and 627.7405, F.S., which comprise the
6 Florida Motor Vehicle No-Fault Law; repealing s.
7 627.7407, F.S., relating to application of the Florida
8 Motor Vehicle No-Fault Law; amending s. 316.646, F.S.;
9 revising a requirement for proof of security on a
10 motor vehicle and the applicability of the
11 requirement; amending s. 318.18, F.S.; conforming a
12 provision to changes made by the act; amending s.
13 320.02, F.S.; revising the motor vehicle insurance
14 coverages that an applicant must show to register
15 certain vehicles with the Department of Highway Safety
16 and Motor Vehicles; conforming a provision to changes
17 made by the act; revising construction; amending s.
18 320.0609, F.S.; conforming a provision to changes made
19 by the act; amending s. 320.27, F.S.; defining the
20 term "garage liability insurance"; revising garage
21 liability insurance requirements for motor vehicle
22 dealer applicants; conforming a provision to changes
23 made by the act; amending s. 320.771, F.S.; revising
24 garage liability insurance requirements for
25 recreational vehicle dealer license applicants;
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26 amending ss. 322.251 and 322.34, F.S.; conforming
27 provisions to changes made by the act; amending s.
28 324.011, F.S.; revising legislative intent; amending
29 s. 324.021, F.S.; revising definitions of the terms
30 "motor vehicle" and "proof of financial
31 responsibility"; revising minimum coverage
32 requirements for proof of financial responsibility for
33 specified motor vehicles; defining the term "for-hire
34 passenger transportation vehicle"; conforming
35 provisions to changes made by the act; amending s.
36 324.022, F.S.; revising minimum liability coverage
37 requirements for motor vehicle owners or operators;
38 revising authorized methods for meeting such
39 requirements; deleting a provision relating to an
40 insurer's duty to defend certain claims; revising the
41 vehicles that are excluded from the definition of the
42 term "motor vehicle"; providing security requirements
43 for certain excluded vehicles; conforming provisions
44 to changes made by the act; conforming cross-
45 references; amending s. 324.0221, F.S.; revising
46 coverages that subject a policy to certain insurer
47 reporting and notice requirements; conforming
48 provisions to changes made by the act; creating s.
49 324.0222, F.S.; providing that driver license or
50 registration suspensions for failure to maintain
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51 required security which were in effect before a
52 specified date remain in full force and effect;
53 providing that such suspended licenses or
54 registrations may be reinstated as provided in a
55 specified section; amending s. 324.023, F.S.;
56 conforming cross-references; amending s. 324.031,
57 F.S.; specifying a method of proving financial
58 responsibility; revising the amount of a certificate
59 of deposit required to elect a certain method of proof
60 of financial responsibility; revising excess liability
61 coverage requirements for a person electing to use
62 such method; amending s. 324.032, F.S.; revising
63 financial responsibility requirements for owners or
64 lessees of for-hire passenger transportation vehicles;
65 amending ss. 324.051, 324.071, and 324.091, F.S.;
66 making technical changes; amending s. 324.151, F.S.;
67 revising requirements for motor vehicle liability
68 insurance policies relating to coverage, and exclusion
69 from coverage, for certain drivers and vehicles;
70 defining terms; conforming provisions to changes made
71 by the act; making technical changes; amending s.
72 324.161, F.S.; revising requirements for a certificate
73 of deposit that is required if a person elects a
74 certain method of proving financial responsibility;
75 amending s. 324.171, F.S.; revising the minimum net
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76 worth requirements to qualify certain persons as self-
77 insurers; conforming provisions to changes made by the
78 act; amending s. 324.251, F.S.; revising the short
79 title and an effective date; amending s. 400.9905,
80 F.S.; revising the definition of the term "clinic";
81 amending ss. 400.991 and 400.9935, F.S.; conforming
82 provisions to changes made by the act; amending s.
83 409.901, F.S.; revising the definition of the term
84 "third-party benefit"; amending s. 409.910, F.S.;
85 revising the definition of the term "medical
86 coverage"; amending s. 456.057, F.S.; conforming a
87 cross-reference; amending s. 456.072, F.S.; revising
88 specified grounds for discipline for certain health
89 professions; amending s. 626.9541, F.S.; conforming a
90 provision to changes made by the act; revising the
91 type of insurance coverage applicable to a certain
92 prohibited act; amending s. 626.989, F.S.; revising
93 the definition of the term "fraudulent insurance act";
94 amending s. 627.06501, F.S.; revising coverages that
95 may provide for a reduction in motor vehicle insurance
96 policy premium charges under certain circumstances;
97 amending s. 627.0651, F.S.; specifying requirements
98 for initial rate filings for motor vehicle liability
99 policies submitted to the Office of Insurance
100 Regulation beginning on a specified date; amending s.
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101 627.0652, F.S.; revising coverages that must provide a
102 premium charge reduction under certain circumstances;
103 amending s. 627.0653, F.S.; revising coverages subject
104 to premium discounts for specified motor vehicle
105 equipment; amending s. 627.4132, F.S.; revising the
106 coverages of a motor vehicle policy which are subject
107 to a stacking prohibition; amending s. 627.7263, F.S.;
108 revising coverages that are deemed primary, except
109 under certain circumstances, for the lessor of a motor
110 vehicle for lease or rent; revising a notice that is
111 required if the lessee's coverage is to be primary;
112 creating s. 627.7265, F.S.; specifying persons whom
113 medical payments coverage must protect; specifying the
114 minimum medical expense and death benefit limits;
115 specifying coverage options an insurer must and may
116 offer; providing that motor vehicle liability
117 insurance policies are deemed to have medical payments
118 coverage at a certain limit and with no deductible
119 unless rejected or modified by the policyholder by
120 certain means; specifying requirements for certain
121 forms approved by the office; requiring insurers to
122 provide policyholders with a certain annual notice;
123 providing construction relating to limits on certain
124 other coverages; requiring insurers, upon receiving
125 certain notice of an accident, to hold a specified
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126 reserve for certain purposes for a certain timeframe;
127 providing that the reserve requirement does not
128 require insurers to establish a claim reserve for
129 accounting purposes; specifying that an insurer
130 providing medical payments coverage benefits may not
131 have a lien on a certain recovery and may not have a
132 certain cause of action; authorizing insurers to
133 include policy provisions allowing for subrogation,
134 under certain circumstances, for medical payments
135 benefits paid; providing construction; specifying a
136 requirement for an insured for repayment of medical
137 payments benefits under certain circumstances;
138 prohibiting insurers from including policy provisions
139 allowing for subrogation for death benefits paid;
140 amending s. 627.727, F.S.; revising the legal
141 liability of an uninsured motorist coverage insurer;
142 conforming provisions to changes made by the act;
143 amending s. 627.7275, F.S.; revising required
144 coverages for a motor vehicle insurance policy;
145 conforming provisions to changes made by the act;
146 creating s. 627.7278, F.S.; defining the term "minimum
147 security requirements"; providing a prohibition,
148 requirements, applicability, and construction relating
149 to motor vehicle insurance policies as of a certain
150 date; requiring insurers to allow certain insureds to
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151 make certain coverage changes, subject to certain
152 conditions; requiring an insurer to provide, by a
153 specified date, a specified notice to policyholders
154 relating to requirements under the act; amending s.
155 627.728, F.S.; conforming a provision to changes made
156 by the act; amending s. 627.7295, F.S.; revising the
157 definitions of the terms "policy" and "binder";
158 revising the coverages of a motor vehicle insurance
159 policy for which a licensed general lines agent may
160 charge a specified fee; conforming a provision to
161 changes made by the act; amending s. 627.7415, F.S.;
162 revising additional liability insurance requirements
163 for commercial motor vehicles; creating s. 627.747,
164 F.S.; providing that private passenger motor vehicle
165 policies may exclude certain identified individuals
166 from specified coverages under certain circumstances;
167 providing that such policies may not exclude coverage
168 under certain circumstances; amending s. 627.748,
169 F.S.; revising insurance requirements for
170 transportation network company drivers; conforming
171 provisions to changes made by the act; amending s.
172 627.749, F.S.; conforming a provision to changes made
173 by the act; amending s. 627.8405, F.S.; revising
174 coverages in a policy sold in combination with an
175 accidental death and dismemberment policy which a
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176 premium finance company may not finance; revising
177 rulemaking authority of the Financial Services
178 Commission; amending ss. 627.915, 628.909, 705.184,
179 and 713.78, F.S.; conforming provisions to changes
180 made by the act; amending s. 817.234, F.S.; revising
181 coverages that are the basis of specified prohibited
182 false and fraudulent insurance claims; conforming
183 provisions to changes made by the act; providing an
184 appropriation; providing effective dates.
185
186 Be It Enacted by the Legislature of the State of Florida:
187
188 Section 1. Sections 627.730, 627.731, 627.7311, 627.732,
189 627. 733, 627. 734, 627. 736, 627. 737, 627. 739, 627. 7401, 627. 7403,
190 and 627.7405, Florida Statutes, are repealed.
191 Section 2. Section 627.7407, Florida Statutes, is
192 repealed.
193 Section 3. Subsection (1) of section 316.646, Florida
194 Statutes, is amended to read:
195 316.646 Security required; proof of security and display
196 thereof.-
197 (1) Any person required bys. 324.022 to maintain
198 liability security for property damageL liability security,
199 required bys. 324.023 to ffiaintain liability security for bodily
200 injuryL or death, or required bys. 627.733 to ffiaintain personal
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201 injury protection security on a motor vehicle shall have in his
202 or her immediate possession at all times while operating such
203 motor vehicle proper proof of maintenance of the required
204 security required under s. 324.021(7).
205 (a) Such proof must shall be in a uniform paper or
206 electronic format, as prescribed by the department, a valid
207 insurance policy, an insurance policy binder, a certificate of
208 insurance, or such other proof as may be prescribed by the
209 department.
210 (b)l. The act of presenting to a law enforcement officer
211 an electronic device displaying proof of insurance in an
212 electronic format does not constitute consent for the officer to
213 access any information on the device other than the displayed
214 proof of insurance.
215 2. The person who presents the device to the officer
216 assumes the liability for any resulting damage to the device.
217 Section 4. Paragraph (b) of subsection (2) of section
218 318.18, Florida Statutes, is amended to read:
219 318.18 Amount of penalties.-The penalties required for a
220 noncriminal disposition pursuant to s. 318.14 or a criminal
221 offense listed ins. 318.17 are as follows:
222 (2) Thirty dollars for all nonmoving traffic violations
223 and:
224 (b) For all violations of ss. 320.0605, 320.07(1),
225 322.065, and 322.15(1). A Any person who is cited for a
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226 violation of s. 320.07(1) shall be charged a delinquent fee
227 pursuant to s. 320.07(4).
228 1. If a person who is cited for a violation of s. 320.0605
229 ors. 320.07 can show proof of having a valid registration at
230 the time of arrest, the clerk of the court may dismiss the case
231 and may assess a dismissal fee of up to $10, from which the
232 clerk shall remit $2.50 to the Department of Revenue for deposit
233 into the General Revenue Fund. A person who finds it impossible
234 or impractical to obtain a valid registration certificate must
235 submit an affidavit detailing the reasons for the impossibility
236 or impracticality. The reasons may include, but are not limited
237 to, the fact that the vehicle was sold, stolen, or destroyed;
238 that the state in which the vehicle is registered does not issue
239 a certificate of registration; or that the vehicle is owned by
240 another person.
241 2. If a person who is cited for a violation of s. 322.03,
242 s. 322.065, ors. 322.15 can show a driver license issued to him
243 or her and valid at the time of arrest, the clerk of the court
244 may dismiss the case and may assess a dismissal fee of up to
245 $10, from which the clerk shall remit $2.50 to the Department of
246 Revenue for deposit into the General Revenue Fund.
247 3. If a person who is cited for a violation of s. 316.646
248 can show proof of security as required bys. 324.021(7) s-.
249 627.733, issued to the person and valid at the time of arrest,
250 the clerk of the court may dismiss the case and may assess a
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251 dismissal fee of up to $10, from which the clerk shall remit
252 $2.50 to the Department of Revenue for deposit into the General
253 Revenue Fund. A person who finds it impossible or impractical to
254 obtain proof of security must submit an affidavit detailing the
255 reasons for the impracticality. The reasons may include, but are
256 not limited to, the fact that the vehicle has since been sold,
257 stolen, or destroyed: that the owner or registrant of the
258 vehicle is not required bys. 627.733 to ffiaintain personal
259 injury protection insurance: or that the vehicle is owned by
260 another person.
261 Section 5. Paragraphs (a) and (d) of subsection (5) of
262 section 320.02, Florida Statutes, are amended to read:
263 320.02 Registration required; application for
264 registration; forms.-
265 ( 5) (a) Proof that bodily injury liability coverage and
266 property damage liability coverage personal injury protection
267 benefits have been purchased if required under s. 324.022, s.
268 324.032, ors. 627.742 s. 627.733, that property daffiage
269 liability coverage has been purchased as required under s.
270 324.022, that bodily injury liability or death coverage has been
271 purchased if required under s. 324.023, and that combined bodily
272 liability insurance and property damage liability insurance have
273 been purchased if required under s. 627.7415 must shall be
274 provided in the manner prescribed by law by the applicant at the
275 time of application for registration of any motor vehicle that
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276 is subject to such requirements. The issuing agent may not shall
277 refuse to issue registration if such proof of purchase is not
278 provided. Insurers shall furnish uniform proof-of-purchase cards
279 in a paper or electronic format in a form prescribed by the
280 department and include the name of the insured's insurance
281 company, the coverage identification number, and the make, year,
282 and vehicle identification number of the vehicle insured. The
283 card must contain a statement notifying the applicant of the
284 penalty specified under s. 316.646(4). The card or insurance
285 policy, insurance policy binder, or certificate of insurance or
286 a photocopy of any of these; an affidavit containing the name of
287 the insured's insurance company, the insured's policy number,
288 and the make and year of the vehicle insured; or such other
289 proof as may be prescribed by the department constitutes shall
290 constitute sufficient proof of purchase. If an affidavit is
291 provided as proof, it must be in substantially the following
292 form:
293
294 Under penalty of perjury, I ... (Name of insured) ... do hereby
295 certify that I have ... (bodily injury liability and Personal
296 Injury Protection, property damage liability, and, if required,
297 Bodily Injury Liability) ... insurance currently in effect with
298 ... (Name of insurance company) ... under ... (policy number) ...
299 covering (make, year, and vehicle identification number of
300 vehicle) .... ... (Signature of Insured) ...
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301
302 Such affidavit must include the following warning:
303
304 WARNING: GIVING FALSE INFORMATION IN ORDER TO OBTAIN A VEHICLE
305 REGISTRATION CERTIFICATE IS A CRIMINAL OFFENSE UNDER FLORIDA
306 LAW. ANYONE GIVING FALSE INFORMATION ON THIS AFFIDAVIT IS
307 SUBJECT TO PROSECUTION.
308
309 If an application is made through a licensed motor vehicle
310 dealer as required under s. 319.23, the original or a photocopy
311 photostatic copy of such card, insurance policy, insurance
312 policy binder, or certificate of insurance or the original
313 affidavit from the insured must shall be forwarded by the dealer
314 to the tax collector of the county or the Department of Highway
315 Safety and Motor Vehicles for processing. By executing the
316 aforesaid affidavit,~ H-e licensed motor vehicle dealer is not
317 will be liable in damages for any inadequacy, insufficiency, or
318 falsification of any statement contained therein. A card must
319 also indicate the existence of any bodily injury liability
320 insurance voluntarily purchased.
321 (d) The verifying of proof of personal injury protection
322 insurance, proof of property damage liability insurance, proof
323 of combined bodily liability insurance and property damage
324 liability insurance, or proof of financial responsibility
325 insurance and the issuance or failure to issue the motor vehicle
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326 registration under the provisions of this chapter may not be
327 construed in any court as a warranty of the reliability or
328 accuracy of the evidence of such proof, or as meaning that the
329 provisions of any insurance policy furnished as proof of
330 financial responsibility comply with state law. Neither the
331 department nor any tax collector is liable in damages for any
332 inadequacy, insufficiency, falsification, or unauthorized
333 modification of any item of the proof of personal injury
334 protection insurance, proof of property damage liability
335 insurance, proof of combined bodily liability insurance and
336 property damage liability insurance, or proof of financial
337 responsibility before insurance prior to, during, or subsequent
338 to the verification of the proof. The issuance of a motor
339 vehicle registration does not constitute prima facie evidence or
340 a presumption of insurance coverage.
341 Section 6. Paragraph (b) of subsection (1) of section
342 320.0609, Florida Statutes, is amended to read:
343 320.0609 Transfer and exchange of registration license
344 plates; transfer fee.-
345 ( 1)
346 (b} The transfer of a license plate from a vehicle
347 disposed of to a newly acquired vehicle does not constitute a
348 new registration. The application for transfer must shall be
349 accepted without requiring proof of personal injury protection
350 e-r- liability insurance.
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351 Section 7. Paragraph (g) is added to subsection (1) of
352 section 320.27, Florida Statutes, and subsection (3) of that
353 section is amended, to read:
354 320.27 Motor vehicle dealers.-
355 (1) DEFINITIONS.-The following words, terms, and phrases
356 when used in this section have the meanings respectively
357 ascribed to them in this subsection, except where the context
358 clearly indicates a different meaning:
359 (g) "Garage liability insurance" means, beginning January
360 1, 2021, combined single-limit liability coverage, including
361 property damage and bodily injury liability coverage, in the
362 amount of at least $60,000.
363 (3) APPLICATION AND FEE.-The application for the license
364 application must shall be in such form as may be prescribed by
365 the department and is shall be subject to such rules -w-i-'E-h,
366 respect thereto as may be so prescribed by the department -i-t-.
367 Such application must shall be verified by oath or affirmation
368 and must shall contain a full statement of the name and birth
369 date of the person or persons applying for the license therefor;
370 the name of the firm or copartnership, with the names and places
371 of residence of all members thereof, if such applicant is a firm
372 or copartnership; the names and places of residence of the
373 principal officers, if the applicant is a body corporate or
374 other artificial body; the name of the state under whose laws
375 the corporation is organized; the present and former place or
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376 places of residence of the applicant; and the prior business in
377 which the applicant has been engaged and its 'E"fte location
378 thereof. The -&treft application must shall describe the exact
379 location of the place of business and must shall state whether
380 the place of business is owned by the applicant and when
381 acquired, or, if leased, a true copy of the lease must shall be
382 attached to the application. The applicant shall certify that
383 the location provides an adequately equipped office and is not a
384 residence; that the location affords sufficient unoccupied space
385 upon and within which adequately to store all motor vehicles
386 offered and displayed for sale; and that the location is a
387 suitable place where the applicant can in good faith carry on
388 such business and keep and maintain books, records, and files
389 necessary to conduct such business, which must shall be
390 available at all reasonable hours to inspection by the
391 department or any of its inspectors or other employees. The
392 applicant shall certify that the business of a motor vehicle
393 dealer is the principal business that will which shall be
394 conducted at that location. The application must shall contain a
395 statement that the applicant is either franchised by a
396 manufacturer of motor vehicles, in which case the name of each
397 motor vehicle that the applicant is franchised to sell must
398 shall be included, or an independent (nonfranchised) motor
399 vehicle dealer. The application must shall contain other
400 relevant information as may be required by the department. The
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401 applicant shall furnish, including evidence, in a form approved
402 by the department, that the applicant is insured under a garage
403 liability insurance policy or a general liability insurance
404 policy coupled with a business automobile policy having the
405 coverages and limits of the garage liability insurance coverage
406 in accordance with paragraph (1) (g), which shall include, at a
407 minimum, $25,000 combined single limit liability coverage
408 including bodily injury and property damage protection and
409 $10,000 personal injury protection. However, a salvage motor
410 vehicle dealer as defined in subparagraph (1) (c)5. is exempt
411 from the requirements for garage liability insurance afTEl
412 personal injury protection insurance on those vehicles that
413 cannot be legally operated on roads, highways, or streets in
414 this state. Franchise dealers must submit a garage liability
415 insurance policy, and all other dealers must submit a garage
416 liability insurance policy or a general liability insurance
417 policy coupled with a business automobile policy. Such policy
418 must shall be for the license period, and evidence of a new or
419 continued policy must shall be delivered to the department at
420 the beginning of each license period. Upon making an initial
421 application, the applicant shall pay to the department a fee of
422 $300 in addition to any other fees required by law. Applicants
423 may choose to extend the licensure period for 1 additional year
424 for a total of 2 years. An initial applicant shall pay to the
425 department a fee of $300 for the first year and $75 for the
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426 second year, in addition to any other fees required by law. An
427 applicant for renewal shall pay to the department $75 for a 1-
428 year renewal or $150 for a 2-year renewal, in addition to any
429 other fees required by law. Upon making an application for a
430 change of location, the applicant person shall pay a fee of $50
431 in addition to any other fees now required by law. The
432 department shall, in the case of every application for initial
433 licensure, verify whether certain facts set forth in the
434 application are true. Each applicant, general partner in the
435 case of a partnership, or corporate officer and director in the
436 case of a corporate applicant shall, ffiust file a set of
437 fingerprints with the department for the purpose of determining
438 any prior criminal record or any outstanding warrants. The
439 department shall submit the fingerprints to the Department of
440 Law Enforcement for state processing and forwarding to the
441 Federal Bureau of Investigation for federal processing. The
442 actual cost of state and federal processing must shall be borne
443 by the applicant and is in addition to the fee for licensure.
444 The department may issue a license to an applicant pending the
445 results of the fingerprint investigation, which license is fully
446 revocable if the department subsequently determines that any
447 facts set forth in the application are not true or correctly
448 represented.
449 Section 8. Paragraph (j) of subsection (3) of section
450 320.771, Florida Statutes, is amended to read:
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451 320.771 License required of recreational vehicle dealers.-
452 (3) APPLICATION.-The application for such license shall be
453 in the form prescribed by the department and subject to such
454 rules as may be prescribed by it. The application shall be
455 verified by oath or affirmation and shall contain:
456 (j) A statement that the applicant is insured under a
457 garage liability insurance policy in accordance withs.
458 320. 27 ( 1) (g), which shall include, at a minimum, $25,000
459 combined single limit liability coverage, including bodily
460 injury and property damage protection, and $10,000 personal
461 injury protection, if the applicant is to be licensed as a
462 dealer in, or intends to sell, recreational vehicles.
463
464 The department shall, if it deems necessary, cause an
465 investigation to be made to ascertain if the facts set forth in
466 the application are true and shall not issue a license to the
467 applicant until it is satisfied that the facts set forth in the
468 application are true.
469 Section 9. Subsections (1) and (2) of section 322.251,
470 Florida Statutes, are amended to read:
471 322.251 Notice of cancellation, suspension, revocation, or
472 disqualification of license.-
473 (1) All orders of cancellation, suspension, revocation, or
474 disqualification issued under the provisions of this chapter,
475 chapter 318, or chapter 324 must, or so. 627.732 627.734 shall
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476 be given either by personal delivery thereof to the licensee
477 whose license is being canceled, suspended, revoked, or
478 disqualified or by deposit in the United States mail in an
479 envelope, first class, postage prepaid, addressed to the
480 licensee at his or her last known mailing address furnished to
481 the department. Such mailing by the department constitutes
482 notification, and any failure by the person to receive the
483 mailed order will not affect or stay the effective date or term
484 of the cancellation, suspension, revocation, or disqualification
485 of the licensee's driving privilege.
486 (2) The giving of notice and an order of cancellation,
487 suspension, revocation, or disqualification by mail is complete
488 upon expiration of 20 days after deposit in the United States
489 mail for all notices except those issued under chapter 324 er
490 so. 627.732 627.734, which are complete 15 days after deposit in
491 the United States mail. Proof of the giving of notice and an
492 order of cancellation, suspension, revocation, or
493 disqualification in either manner must shall be made by entry in
494 the records of the department that such notice was given. The
495 entry is admissible in the courts of this state and constitutes
496 sufficient proof that such notice was given.
497 Section 10. Paragraph (a) of subsection (8) of section
498 322.34, Florida Statutes, is amended to read:
499 322.34 Driving while license suspended, revoked, canceled,
500 or disqualified.-
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501 (8) (a) Upon the arrest of a person for the offense of
502 driving while the person's driver license or driving privilege
503 is suspended or revoked, the arresting officer shall determine:
504 1. Whether the person's driver license is suspended or
505 revoked, or the person is under suspension or revocation
506 equivalent status.
507 2. Whether the person's driver license has remained
508 suspended or revoked, or the person has been under suspension or
509 revocation equivalent status, since a conviction for the offense
510 of driving with a suspended or revoked license.
511 3. Whether the suspension, revocation, or suspension or
512 revocation equivalent status was made under s. 316.646 ors.
513 627.733, relating to failure to maintain required security, or
514 under s. 322.264, relating to habitual traffic offenders.
515 4. Whether the driver is the registered owner or co-owner
516 of the vehicle.
517 Section 11. Section 324.011, Florida Statutes, is amended
518 to read:
519 324.011 Legislative intent and purpose of chapter.-It is
520 the Legislature's intent of this chapter to ensure that the
521 privilege of owning or operating a motor vehicle in this state
522 is exercised recognize the enisting privilege to own or operate
523 a fflotor vehicle on the public streets and highways of this state
524 when ouch vehicles are used with due consideration for others'
525 safety others and their property, afi€i to promote safetyL and to
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52 6 provide financial security requirements for -stteft owners and er
527 operators whose responsibility it is to recompense others for
528 injury to person or property caused by the operation of a motor
529 vehicle. Therefore, this chapter requires that every owner or
530 operator of a motor vehicle required to be registered in this
531 state establish, maintain, and it is required herein that the
532 operator of a motor vehicle involved in a crash or convicted of
533 certain traffic offenses meeting the operative provisions of s.
534 324.051(2) shall respond for such damages and show proof of
535 financial ability to respond for damages arising out of the
536 ownership, maintenance, or use of a motor vehicle in future
537 accidents as a requisite to owning or operating a motor vehicle
538 in this state his or her future enercise of such privileges.
539 Section 12. Subsections (1) and (7) and paragraph (c) of
540 subsection (9) of section 324.021, Florida Statutes, are
541 amended, and subsection (12) is added to that section, to read:
542 324.021 Definitions; minimum insurance required.-The
543 following words and phrases when used in this chapter shall, for
544 the purpose of this chapter, have the meanings respectively
545 ascribed to them in this section, except in those instances
546 where the context clearly indicates a different meaning:
547 (1) MOTOR VEHICLE.-Every self-propelled vehicle that is
548 designed and required to be licensed for use upon a highway,
549 including trailers and semitrailers designed for use with such
550 vehicles, except traction engines, road rollers, farm tractors,
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551 power shovels, and well drillers, and every vehicle that is
552 propelled by electric power obtained from overhead wires but not
553 operated upon rails, but not including any personal delivery
554 device or mobile carrier as defined ins. 316.003, bicycle, or
555 moped. However, the term "motor vehiele" does not inelude a
556 motor vehicle as defined ins. 627.732(3) when the owner of such
557 vehicle has complied with the requirements of ss. 627.730
558 627.7405, inclusive, unless the provisions of s. 324.051 apply;
559 and, in such case, the applicable proof of insurance provisions
560 of s. 320.02 apply.
561 (7) PROOF OF FINANCIAL RESPONSIBILITY. That Proof of
562 ability to respond in damages for liability on account of
563 crashes arising out of the ownership, maintenance, or use of a
564 motor vehicle:
565 (a) Beginning January 1, 2021, with respect to a motor
566 vehicle that is not a commercial motor vehicle, nonpublic sector
567 bus, or for-hire passenger transportation vehicle, in the amount
568 of:
569 1. Twenty-five thousand dollars for $10,000 because of
570 bodily injury to, or the death of, one person in any one crash
571 and,-,..
572 -+et- subject to such limits for one person, in the amount
573 of $50,000 for $20,000 because of bodily injury to, or the death
574 of, two or more persons in any one crash; and
575 2.-tet Ten thousand dollars for damage In the amount of
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576 $10,000 because of injury to, or destruction of, property of
577 others in any one crash.; and
578 J.el-f-Ei+ With respect to commercial motor vehicles aftd-
579 nonpublic sector buses, in the amounts specified ins. 627.7415
580 so. 627.7415 and 627.742, respectively.
581 (c) With respect to nonpublic sector buses, in the amounts
582 specified ins. 627.742.
583 (d) With respect to for-hire passenger transportation
584 vehicles, in the amounts specified ins. 324.032.
585 (9) OWNER; OWNER/LESSOR.-
586 (c) Application.-
587 1. The limits on liability in subparagraphs (b)2. and 3.
588 do not apply to an owner of motor vehicles that are used for
589 commercial activity in the owner's ordinary course of business,
590 other than a rental company that rents or leases motor vehicles.
591 For purposes of this paragraph, the term "rental company"
592 includes only an entity that is engaged in the business of
593 renting or leasing motor vehicles to the general public and that
594 rents or leases a majority of its motor vehicles to persons with
595 no direct or indirect affiliation with the rental company. The
596 term also includes a motor vehicle dealer that provides
597 temporary replacement vehicles to its customers for up to 10
598 days. The term "rental company" also includes:
599 a. A related rental or leasing company that is a
600 subsidiary of the same parent company as that of the renting or
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601 leasing company that rented or leased the vehicle.
602 b. The holder of a motor vehicle title or an equity
603 interest in a motor vehicle title if the title or equity
604 interest is held pursuant to or to facilitate an asset-backed
605 securitization of a fleet of motor vehicles used solely in the
606 business of renting or leasing motor vehicles to the general
607 public and under the dominion and control of a rental company,
608 as described in this subparagraph, in the operation of such
609 rental company's business.
610 2. Furthermore, with respect to commercial motor vehicles
611 as defined ins. 207.002 ors. 320.01 s. 627.732, the limits on
612 liability in subparagraphs (b)2. and 3. do not apply if, at the
613 time of the incident, the commercial motor vehicle is being used
614 in the transportation of materials found to be hazardous for the
615 purposes of the Hazardous Materials Transportation Authorization
616 Act of 1994, as amended, 49 U.S.C. ss. 5101 et seq., and that is
617 required pursuant to such act to carry placards warning others
618 of the hazardous cargo, unless at the time of lease or rental
619 either:
620 a. The lessee indicates in writing that the vehicle will
621 not be used to transport materials found to be hazardous for the
622 purposes of the Hazardous Materials Transportation Authorization
623 Act of 1994, as amended, 49 U.S.C. ss. 5101 et seq.; or
624 b. The lessee or other operator of the commercial motor
625 vehicle has in effect insurance with limits of at least $5
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626 million $5,000,000 combined property damage and bodily injury
627 liability.
628 (12) FOR-HIRE PASSENGER TRANSPORTATION VEHICLE.-Every for-
629 hire vehicle as defined ins. 320.01(15) which is offered or
630 used to provide transportation for persons, including taxicabs,
631 limousines, and jitneys.
632 Section 13. Section 324.022, Florida Statutes, is amended
633 to read:
634 324.022 Financial responsibility requirements for property
635 daFRage.-
636 (1) (a) Beginning January 1, 2021, every owner or operator
637 of a motor vehicle required to be registered in this state shall
638 establish and continuously maintain the ability to respond in
639 damages for liability on account of accidents arising out of the
640 use of the motor vehicle in the amount of:
641 1. Twenty-five thousand dollars for bodily injury to, or
642 the death of, one person in any one crash and, subject to such
643 limits for one person, in the amount of $50,000 for bodily
644 injury to, or the death of, two or more persons in any one
645 crash; and
646 2. Ten thousand dollars for $10,000 because of damage to,
647 or destruction of, property of others in any one crash.
648 J.E.l The requirements of paragraph (a) this section may be
649 met by one of the methods established ins. 324.031; by self-
650 insuring as authorized bys. 768.28(16); or by maintaining a
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651 motor vehicle liability insurance policy that an insurance
652 policy providing coverage for property damage liability in the
653 amount of at least $10,000 because of damage to, or destruction
654 of, property of others in any one accident arising out of the
655 use of the motor vehicle. The requirements of this section may
656 also be met by having a policy which provides combined property
657 damage liability and bodily injury liability coverage for any
658 one crash arising out of the ownership, maintenance, or use of a
659 motor vehicle and that conforms to the requirements of s.
660 324.151 in the amount of at least $60,000 for every owner or
661 operator subject to the financial responsibility required in
662 paragraph (a) $30,000 for combined property damage liability and
663 bodily injury liability for any one crash arising out of the use
664 of the motor vehicle. The policy, with respect to coverage for
665 property damage liability, must meet the applicable requirements
666 of s. 324.151, subject to the usual policy e1rclusions that have
667 been approved in policy forms by the Office of Insurance
668 Regulation. No insurer shall have any duty to defend uncovered
669 claims irrespective of their joinder with covered claims.
670 (2) As used in this section, the term:
671 (a) "Motor vehicle" means any self-propelled vehicle that
672 has four or more wheels and that is of a type designed and
673 required to be licensed for use on the highways of this state,
674 and any trailer or semitrailer designed for use with such
675 vehicle. The term does not include the following:
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676 1. A mobile home as defined ins. 320.01.
677 2. A motor vehicle that is used in mass transit and
678 designed to transport more than five passengers, exclusive of
679 the operator of the motor vehicle, and that is owned by a
680 municipality, transit authority, or political subdivision of the
681 state.
682 3. A school bus as defined ins. 1006.25, which must
683 maintain security as required under s. 316.615.
684 4. A commercial motor vehicle as defined ins. 207.002 or
685 s. 320.01, which must maintain security as required under ss.
686 324.031 and 627.7415.
687 5. A nonpublic sector bus, which must maintain security as
688 required under ss. 324.031 and 627.742.
689 6.4-. A vehicle providing for-hire passenger transportation
690 vehicle, which must that is subject to the provisions of s.
691 32 4. 031. A ta1cicab shall maintain security as required under s.
692 324.032 s. 324.032(1).
693 7.§-:.. A personal delivery device as defined ins. 316.003.
694 (b) "Owner" means the person who holds legal title to a
695 motor vehicle or the debtor or lessee who has the right to
696 possession of a motor vehicle that is the subject of a security
697 agreement or lease with an option to purchase.
698 (3) Each nonresident owner or registrant of a motor
699 vehicle that, whether operated or not, has been physically
700 present within this state for more than 90 days during the
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701 preceding 365 days shall maintain security as required by
702 subsection (1). The security must be that is in effect
703 continuously throughout the period the motor vehicle remains
704 within this state.
705 (4) An !f.fie owner or registrant of a motor vehicle who is
706 enempt from the requirements of this section if she or he is a
707 member of the United States Armed Forces and is called to or on
708 active duty outside the United States in an emergency situation
709 is exempt from this section while he or she. The eJwmption
710 provided by this subsection applies only as long as the member
711 of the Armed Forces is on such active duty. This exemption
712 outside the United States and applies only while the vehicle
713 covered by the security is not operated by any person. Upon
714 receipt of a written request by the insured to whom the
715 exemption provided in this subsection applies, the insurer shall
716 cancel the coverages and return any unearned premium or suspend
717 the security required by this section. Notwithstanding~
718 324.0221(2) s. 324.0221(3), the department may not suspend the
719 registration or operator's license of an ttfiY owner or registrant
720 of a motor vehicle during the time she or he qualifies for the
721 aR- exemption under this subsection. An Arty- owner or registrant
722 of a motor vehicle who qualifies for the aR- exemption under this
723 subsection shall immediately notify the department before prior
724 'E'e- and at the end of the expiration of the exemption.
725 Section 14. Subsections (1) and (2) of section 324.0221,
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726 Florida Statutes, are amended to read:
727 324.0221 Reports by insurers to the department; suspension
728 of driver license and vehicle registrations; reinstatement.-
729 (1) (a) Each insurer that has issued a policy providing
730 personal injury protection coverage or property damage liability
731 coverage shall report the cancellation or nonrenewal thereof to
732 the department within 10 days after the processing date or
733 effective date of each cancellation or nonrenewal. Upon the
734 issuance of a policy providing personal injury protection
735 coverage or property damage liability coverage to a named
736 insured not previously insured by the insurer during that
737 calendar year, the insurer shall report the issuance of the new
738 policy to the department within 10 days. The report must shall
739 be in the form and format and contain any information required
740 by the department and must be provided in a format that is
741 compatible with the data processing capabilities of the
742 department. Failure by an insurer to file proper reports with
743 the department as required by this subsection constitutes a
744 violation of the Florida Insurance Code. These records may shall
745 be used by the department only for enforcement and regulatory
746 purposes, including the generation by the department of data
747 regarding compliance by owners of motor vehicles with the
748 requirements for financial responsibility coverage.
749 (b) With respect to an insurance policy providing personal
750 injury protection coverage or property damage liability
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751 coverage, each insurer shall notify the named insured, or the
752 first-named insured in the case of a commercial fleet policy, in
753 writing that any cancellation or nonrenewal of the policy will
754 be reported by the insurer to the department. The notice must
755 also inform the named insured that failure to maintain bodily
756 injury liability personal injury protection coverage and
757 property damage liability coverage on a motor vehicle when
758 required by law may result in the loss of registration and
759 driving privileges in this state and inform the named insured of
760 the amount of the reinstatement fees required by this section.
761 This notice is for informational purposes only, and an insurer
762 is not civilly liable for failing to provide this notice.
763 (2) The department shall suspend, after due notice and an
764 opportunity to be heard, the registration and driver license of
765 any owner or registrant of a motor vehicle for with respect to
766 which security is required under s. 324.022, s. 324.032, s.
767 627.7415, ors. 627.742 so. 324.022 and 627.733 upon:
768 (a) The department's records showing that the owner or
769 registrant of such motor vehicle did not have the in full force
770 and effect when required security in full force and e f f e c t ~
771 coffiplies with the requireffients of so. 324.022 and 627.733; or
772 (b) Notification by the insurer to the department, in a
773 form approved by the department, of cancellation or termination
774 of the required security.
775 Section 15. Section 324.0222, Florida Statutes, is created
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776 to read:
777 324.0222 Application of suspensions for failure to
778 maintain security; reinstatement.-All suspensions for failure to
779 maintain required security as required by law in effect before
780 January 1, 2021, remain in full force and effect on or after
781 January 1, 2021. A driver may reinstate a suspended driver
782 license or registration as provided under s. 324.0221.
783 Section 16. Section 324.023, Florida Statutes, is amended
784 to read:
785 324.023 Financial responsibility for bodily injury or
786 death.-In addition to any other financial responsibility
787 required by law, every owner or operator of a motor vehicle that
788 is required to be registered in this state, or that is located
789 within this state, and who, regardless of adjudication of guilt,
790 has been found guilty of or entered a plea of guilty or nolo
791 contendere to a charge of driving under the influence under s.
792 316.193 after October 1, 2007, shall, by one of the methods
793 established ins. 324.031(1) (a) or (b) s. 324.031(1) or (2),
794 establish and maintain the ability to respond in damages for
795 liability on account of accidents arising out of the use of a
796 motor vehicle in the amount of $100,000 because of bodily injury
797 to, or death of, one person in any one crash and, subject to
798 such limits for one person, in the amount of $300,000 because of
799 bodily injury to, or death of, two or more persons in any one
800 crash and in the amount of $50,000 because of property damage in
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801 any one crash. If the owner or operator chooses to establish and
802 maintain such ability by furnishing a certificate of deposit
803 pursuant to s. 324.031(1)(b) s. 324.031(2), such certificate of
804 deposit must be at least $350,000. Such higher limits must be
805 carried for a minimum period of 3 years. If the owner or
806 operator has not been convicted of driving under the influence
807 or a felony traffic offense for a period of 3 years from the
808 date of reinstatement of driving privileges for a violation of
809 s. 316.193, the owner or operator is shall be exempt from this
810 section.
811 Section 17. Section 324.031, Florida Statutes, is amended
812 to read:
813 324.031 Manner of proving financial responsibility.-
814 ill The owner or operator of a tanicab, liFRousine, jitney,
815 or any other for hire passengei transportation vehicle FRay prove
816 financial responsibility by providing satisfactory evidence of
817 holding a FRotor vehicle liability policy as defined ins.
818 324.021(8) ors. 324.1§1, which policy is issued by an insurance
819 carrier which is a FReFRber of the Florida Insurance Guaranty
820 Association. The operator or owner of a motor vehicle other than
821 a for-hire passenger transportation vehicle any other vehicle
822 may prove his or her financial responsibility by:
823 ~+±+ Furnishing satisfactory evidence of holding a motor
824 vehicle liability policy as defined in ss. 324.021(8) and
825 324.151 which provides liability coverage for the motor vehicle
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826 being operated;
827 J.Ql_-f-2+ Furnishing a certificate of self-insurance showing
828 a deposit of cash in accordance withs. 324.161; or
829 ~-f-3-+- Furnishing a certificate of self-insurance issued
830 by the department in accordance withs. 324.171.
831 (2) (a) Beginning January 1, 2021, any person, including
832 any firm, partnership, association, corporation, or other
833 person, other than a natural person, electing to use the method
834 of proof specified in paragraph (1) (b) subsection (2) shall
835 furnish a certificate of deposit equal to the number of vehicles
836 owned times $60,000 $30,000, to a maximum of $240,000. $120,0001
837 J.Ql_ In addition, any such person, other than a natural
838 person, shall maintain insurance providing coverage conforming
839 to the requirements of s. 324.151 in excess of the amount of the
840 certificate of deposit, with limits of at least:
841 1. One hundred twenty-five thousand dollars for bodily
842 injury to, or the death of, one person in any one crash and,
843 subject to such limits for one person, in the amount of $250,000
844 for bodily injury to, or the death of, two or more persons in
845 any one crash, and $50,000 for damage to, or destruction of,
846 property of others in any one crash; or
847 2. Three hundred thousand dollars for combined bodily
848 injury liability and property damage liability for any one crash
849 $10,000/20,000/10,000 or $30,000 combined single limits, and
850 such mwess insurance shall provide minimum limits of
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851 $125,000/250,000/50,000 or $300,000 coffibiA.ed siA.gle limits.
852 These iA.creased limits shall A.et affect the requiremeA.ts for
853 proviA.g fiA.aA.cial respoA.sibility uA.der s. 324.032(1).
854 Section 18. Section 324.032, Florida Statutes, is amended
855 to read:
856 324.032 HaA.A.er of proviA.g Financial responsibility for-t-
857 for-hire passenger transportation vehicles. NotwithstaA.diA.g the
858 provisioA.s of s. 324.031:
859 (1) An owner or lessee of a for-hire passenger
860 transportation vehicle that is required to be registered in this
861 state shall establish and continuously maintain the ability to
862 respond in damages for liability on account of accidents arising
863 out of the ownership, maintenance, or use of the for-hire
864 passenger transportation vehicle, in the amount of:
865 (a) One hundred twenty-five thousand dollars for bodily
866 injury to, or the death of, one person in any one crash and,
8 67 subject to such limits for one person, in the amount of $250,000
868 for bodily injury to, or the death of, two or more persons in
869 any one crash; and A persoA. who is either the owner or a lessee
870 required to maintaiA. iA.surance under s. 627.733(1) (b) and who
871 operates oA.e or more tauicabs, limousines, jitneys, or any other
872 for hire passenger transportatioA. vehicles may prove fiA.ancial
873 responsibility by furnishing satisfactory evidence of holding a
874 motor vehicle liability policy, but with minimUIB limits of
875 $125,000/250,000/50,000.
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876 (b) Fifty thousand dollars for damage to, or destruction
877 of, property of others in any one crash A person who is either
878 the owner or a lessee required to maintain insurance under o.
879 324.021(9) (b) and who operates limousines, jitneys, or any other
880 for hire passenger vehicles, other than taKieabs, may prove
881 financial responsibility by furnishing satisfactory evidence of
882 holding a motor vehicle liability policy as defined ins.
883 324. 031.
884 (2) Except as provided in subsection (3), the requirements
885 of this section must be met by the owner or lessee providing
886 satisfactory evidence of holding a motor vehicle liability
887 policy conforming to the requirements of s. 324.151 which is
888 issued by an insurance carrier that is a member of the Florida
889 Insurance Guaranty Association.
890 Jl.l~ An owner or a lessee who is required to maintain
891 insurance under s. 324.021(9) (b) and who operates at least 300
892 taKicabs, limousines, jitneys, or any other for-hire passenger
893 transportation vehicles may provide financial responsibility by
894 complying with the provisions of s. 324.171, which must -G-U€ft
895 compliance to be demonstrated by maintaining at its principal
896 place of business an audited financial statement, prepared in
897 accordance with generally accepted accounting principles, and
898 providing to the department a certification issued by a
899 certified public accountant that the applicant's net worth is at
900 least equal to the requirements of s. 324.171 as determined by
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901 the Office of Insurance Regulation of the Financial Services
902 Commission, including claims liabilities in an amount certified
903 as adequate by a Fellow of the Casualty Actuarial Society.
904
905 Upon request by the department, the applicant shall ffitr5-'E- provide
906 the department at the applicant's principal place of business in
907 this state access to the applicant's underlying financial
908 information and financial statements that provide the basis of
909 the certified public accountant's certification. The applicant
910 shall reimburse the requesting department for all reasonable
911 costs incurred by it in reviewing the supporting information.
912 The maximum amount of self-insurance permissible under this
913 subsection is $300,000 and must be stated on a per-occurrence
914 basis, and the applicant shall maintain adequate excess
915 insurance issued by an authorized or eligible insurer licensed
916 or approved by the Office of Insurance Regulation. All risks
917 self-insured shall remain with the owner or lessee providing it,
918 and the risks are not transferable to any other person, unless a
919 policy complying with subsections (1) and (2) subsection (1) is
920 obtained.
921 Section 19. Paragraph (b) of subsection (2) of section
922 324.051, Florida Statutes, is amended to read:
923 324.051 Reports of crashes; suspensions of licenses and
924 registrations.-
925 (2)
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926 (b) This subsection does shall not apply:
927 1. To such operator or owner if such operator or owner had
928 in effect at the time of such crash or traffic conviction a
929 motor vehicle an automobile liability policy with respect to all
930 of the registered motor vehicles owned by such operator or
931 owner.
932 2. To such operator, if not the owner of such motor
933 vehicle, if there was in effect at the time of such crash or
934 traffic conviction a motor vehicle an automobile liability
935 policy or bond with respect to his or her operation of motor
936 vehicles not owned by him or her.
937 3. To such operator or owner if the liability of such
938 operator or owner for damages resulting from such crash is, in
939 the judgment of the department, covered by any other form of
940 liability insurance or bond.
941 4. To any person who has obtained from the department a
942 certificate of self-insurance, in accordance withs. 324.171, or
943 to any person operating a motor vehicle for such self-insurer.
944
945 No such policy or bond shall be effective under this subsection
946 unless it contains limits of not less than those specified ins.
947 324.021(7).
948 Section 20. Section 324.071, Florida Statutes, is amended
949 to read:
950 324.071 Reinstatement; renewal of license; reinstatement
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951 fee.-An Arty- operator or owner whose license or registration has
952 been suspended pursuant to s. 324.051(2), s. 324.072, s.
953 324.081, ors. 324.121 may effect its reinstatement upon
954 compliance with the provisions of s. 324.051(2) (a)3. or 4., or
955 s. 324.081(2) and (3), as the case may be, and with one of the
956 provisions of s. 324.031 and upon payment to the department of a
957 nonrefundable reinstatement fee of $15. Only one such fee may
958 shall be paid by any one person regardless irrespective of the
959 number of licenses and registrations to be then reinstated or
960 issued to such person. Al-1- Such fees must shall be deposited to
961 a department trust fund. If Wfi.efi the reinstatement of any
962 license or registration is effected by compliance withs.
963 324.051(2) (a)3. or 4., the department may shall not renew the
964 license or registration within a period of 3 years a f t e r ~
965 such reinstatement, nor may shall any other license or
966 registration be issued in the name of such person, unless the
967 operator continues is continuing to comply with one of the
968 provisions of s. 324.031.
969 Section 21. Subsection (1) of section 324.091, Florida
970 Statutes, is amended to read:
971 324.091 Notice to department; notice to insurer.-
972 (1) Each owner and operator involved in a crash or
973 conviction case within the purview of this chapter shall furnish
974 evidence of autoffiobile liability insurance or motor vehicle
975 liability insurance within 14 days after the date of the mailing
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976 of notice of crash by the department in the form and manner as
977 it may designate. Upon receipt of evidence that a an autoffiobile
978 liability policy or motor vehicle liability policy was in effect
979 at the time of the crash or conviction case, the department
980 shall forward to the insurer such information for verification
981 in a method as determined by the department. The insurer shall
982 respond to the department within 20 days after the notice as to
983 whether or not such information is valid. If the department
984 determines that a an autoffiobile liability policy or motor
985 vehicle liability policy was not in effect and did not provide
986 coverage for both the owner and the operator, it must shall take
987 action as it is authorized to do under this chapter.
988 Section 22. Section 324.151, Florida Statutes, is amended
989 to read:
990 324.151 Motor vehicle liability policies; required
991 provisions.-
992 (1) A motor vehicle liability policy that serves as to be
993 proof of financial responsibility under s. 324.031(1) (a) musts-.
994 324.031(1), shall be issued to owners or operators of motor
995 vehicles under the following provisions:
996 (a) A motor vehicle An owner's liability insurance policy
997 issued to an owner of a motor vehicle required to be registered
998 in this state must shall designate by explicit description or by
999 appropriate reference all motor vehicles for with respect to
1000 which coverage is thereby granted. The policy must and shall
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1001 insure the person or persons owner named therein and, except for
1002 a named driver excluded pursuant to s. 627.747, must insure any
1003 resident relative of a named insured other person as operator
1004 using such motor vehicle or motor vehicles with the express or
1005 implied permission of such owner against loss from the liability
1006 imposed by law for damage arising out of the ownership,
1007 maintenance, or use of any -s-ueh motor vehicle or motor vehicles
1008 within the United States or the Dominion of Canada, subject to
1009 limits, e1cclusive of interest and costs with respect to each
1010 such motor vehicle as is provided for under s. 324.021(7).
1011 Except for a named driver excluded pursuant to s. 627.747, the
1012 policy must also insure any person operating an insured motor
1013 vehicle with the express or implied permission of a named
1014 insured against loss from the liability imposed by law for
1015 damage arising out of the use of the insured vehicle. However,
1016 the insurer may include provisions in its policy excluding
1017 liability coverage for a motor vehicle not designated as an
1018 insured vehicle on the policy if such motor vehicle does not
1019 qualify as a newly acquired vehicle, does not qualify as a
1020 temporary substitute vehicle, and was owned by the insured or
1021 was furnished for an insured's regular use for more than 30
1022 consecutive days before the event giving rise to the claim.
1023 Insurers may make available, with respect to property damage
1024 liability coverage, a deductible amount not to exceed $500. In
1025 the event of a property damage loss covered by a policy
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1026 containing a property damage deductible provision, the insurer
1027 shall pay to the third-party claimant the amount of any property
1028 damage liability settlement or judgment, subject to policy
1029 limits, as if no deductible existed.
1030 (b) A motor vehicle liability insurance policy issued to a
1031 person who does not own a motor vehicle must An operator's motor
1032 vehicle liability policy of insurance shall insure the person or
1033 persons named therein against loss from the liability imposed
1034 upon him or her by law for damages arising out of the use by the
1035 person of any motor vehicle not owned by him or her, with the
1036 same territorial limits and subject to the same limits of
1037 liability as referred to above with respect to an owner's policy
1038 of liability insurance.
1039 (c) All such motor vehicle liability policies must provide
1040 liability coverage with limits, exclusive of interest and costs,
1041 as specified under s. 324.021(7) for accidents occurring within
1042 the United States or Canada. The policies must shall state the
1043 name and address of the named insured, the coverage afforded by
1044 the policy, the premium charged therefor, the policy period, and
1045 the limits of liability, and must shall contain an agreement or
1046 be endorsed that insurance is provided in accordance with the
1047 coverage defined in this chapter as respects bodily injury and
1048 death or property damage or both and is subject to a-1-1-
1049 provisions of this chapter. The -&a-i-d policies must shall also
1050 contain a provision that the satisfaction by an insured of a
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1051 judgment for such injury or damage may shall not be a condition
1052 precedent to the right or duty of the insurance carrier to make
1053 payment on account of such injury or damage, and must shall also
1054 contain a provision that bankruptcy or insolvency of the insured
1055 or of the insured's estate may shall not relieve the insurance
1056 carrier of any of its obligations under the -s-a44 policy.
1057 (2) The provisions of This section is shall not ae
1058 applicable to any motor vehicle autoffiobile liability policy
1059 unless and until it is furnished as proof of financial
1060 responsibility for the future pursuant to s. 324.031, and then
1061 applies only from and after the date the -s-a44 policy is s-e
1062 furnished.
1063 (3) As used in this section, the term:
1064 (a) "Newly acquired vehicle" means a vehicle owned by a
1065 named insured or resident relative of the named insured which
1066 was acquired within 30 days before an accident.
1067 (b) "Resident relative" means a person related to a named
1068 insured by any degree by blood, marriage, or adoption, including
1069 a ward or foster child, who usually makes his or her home in the
1070 same family unit or residence as the named insured, whether or
1071 not he or she temporarily lives elsewhere.
1072 (c) "Temporary substitute vehicle" means any motor vehicle
1073 as defined ins. 320.01(1) which is not owned by the named
1074 insured and which is temporarily used with the permission of the
1075 owner as a substitute for the owned motor vehicle designated on
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1076 the policy when the owned vehicle is withdrawn from normal use
1077 because of breakdown, repair, servicing, loss, or destruction.
1078 Section 23. Section 324.161, Florida Statutes, is amended
1079 to read:
1080 324.161 Proof of financial responsibility; deposit.-If a
1081 person elects to prove his or her financial responsibility under
1082 the method of proof specified in s. 324. 031 ( 1) (b), he or she
1083 annually must obtain and submit to the department proof of a
1084 certificate of deposit in the amount required under s.
1085 324.031(2) from a financial institution insured by the Federal
1086 Deposit Insurance Corporation or the National Credit Union
1087 Administration Annually, before any certificate of insurance may
1088 be issued to a person, including any firm, partnership,
1089 association, corporation, or other person, other than a natural
1090 person, proof of a certificate of deposit of $30,000 issued and
1091 held by a financial institution must be submitted to the
1092 department. A power of attorney will be issued to and held by
1093 the department and may be executed upon a judgment issued
1094 against such person making the deposit, for damages for because
1095 B-f- bodily injury to or death of any person or for damages for
1096 because of injury to or destruction of property resulting from
1097 the use or operation of any motor vehicle occurring after such
1098 deposit was made. Money so deposited is shall not b-e subject to
1099 attachment or execution unless such attachment or execution
1100 arises shall arise out of a lawsuit -s-u-i-t- for such damages a-s-
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1101 aforesaid.
1102 Section 24. Subsections (1) and (2) of section 324.171,
1103 Florida Statutes, are amended to read:
1104 324.171 Self-insurer.-
1105 (1) A Arty- person may qualify as a self-insurer by
1106 obtaining a certificate of self-insurance from the department~
1107 which may, in its discretion and Upon application of such a
1108 person, the department may issue a -s-a-i-€i certificate of self-
1109 insurance to an applicant who satisfies when such person has
1110 satisfied the requirements of this section. Effective January 1,
1111 2021 to qualify as a self insurer under this section:
1112 (a) A private individual with private passenger vehicles
1113 shall possess a net unencumbered worth of at least $100,000
1114 $40,000.
1115 (b) A person, including any firm, partnership,
1116 association, corporation, or other person, other than a natural
1117 person, shall:
1118 1. Possess a net unencumbered worth of at least $100,000
1119 $40,000 for the first motor vehicle and $50,000 $20,000 for each
1120 additional motor vehicle; or
1121 2. Maintain sufficient net worth, in an amount determined
1122 by the department, to be financially responsible for potential
1123 losses. The department annually shall determine the minimum net
1124 worth sufficient to satisfy this subparagraph as determined
1125 annually by the department, pursuant to rules adopted
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1126 promulgated by the department 7 with the assistance of the Office
1127 of Insurance Regulation of the Financial Services Commission,--t-e
1128 be financially responsible for potential losses. The rules must
1129 consider any shall take into consideration excess insurance
1130 carried by the applicant. The department's determination must
1131 shall be based upon reasonable actuarial principles considering
1132 the frequency, severity, and loss development of claims incurred
1133 by casualty insurers writing coverage on the type of motor
1134 vehicles for which a certificate of self-insurance is desired.
1135 (c) The owner of a commercial motor vehicle, as defined in
1136 s. 207.002 ors. 320.01, may qualify as a self-insurer subject
1137 to the standards provided~ in subparagraph (b)2.
1138 (2) The self-insurance certificate must shall provide
1139 limits of liability insurance in the amounts specified under s.
1140 324.021(7) ors. 627.7415 and shall provide personal injury
1141 protection coverage under s. 627.733 (3) (b).
1142 Section 25. Section 324.251, Florida Statutes, is amended
1143 to read:
1144 324.251 Short title.-This chapter may be cited as the
1145 "Financial Responsibility Law of 2020 -1-9-§.5." and is shall become
1146 effective at 12:01 a.m., January 1, 2021 October 1, 1955.
1147 Section 26. Subsection (4) of section 400.9905, Florida
1148 Statutes, is amended to read:
1149 400.9905 Definitions.-
1150 (4)M "Clinic" means an entity where health care services
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1151 are provided to individuals and which tenders charges for
1152 reimbursement for such services, including a mobile clinic and a
1153 portable equipment provider. As used in this part, the term does
1154 not include and the licensure requirements of this part do not
1155 apply to:
1156 l..:_+a+ Entities licensed or registered by the state under
1157 chapter 395; entities licensed or registered by the state and
1158 providing only health care services within the scope of services
1159 authorized under their respective licenses under ss. 383.30-
1160 383.332, chapter 390, chapter 394, chapter 397, this chapter
1161 except part X, chapter 429, chapter 463, chapter 465, chapter
1162 466, chapter 478, chapter 484, or chapter 651; end-stage renal
1163 disease providers authorized under 42 C.F.R. part 405, subpart
1164 U; providers certified under 42 C.F.R. part 485, subpart B or
1165 subpart H; providers certified by the Centers for Medicare and
1166 Medicaid Services under the federal Clinical Laboratory
1167 Improvement Amendments and the federal rules adopted thereunder;
1168 or any entity that provides neonatal or pediatric hospital-based
1169 health care services or other health care services by licensed
1170 practitioners solely within a hospital licensed under chapter
1171 395.
1172 l..:_-te+ Entities that own, directly or indirectly, entities
1173 licensed or registered by the state pursuant to chapter 395;
1174 entities that own, directly or indirectly, entities licensed or
1175 registered by the state and providing only health care services
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1176 within the scope of services authorized pursuant to their
1177 respective licenses under ss. 383.30-383.332, chapter 390,
1178 chapter 394, chapter 397, this chapter except part X, chapter
1179 429, chapter 463, chapter 465, chapter 466, chapter 478, chapter
1180 484, or chapter 651; end-stage renal disease providers
1181 authorized under 42 C.F.R. part 405, subpart U; providers
1182 certified under 42 C.F.R. part 485, subpart B or subpart H;
1183 providers certified by the Centers for Medicare and Medicaid
1184 Services under the federal Clinical Laboratory Improvement
1185 Amendments and the federal rules adopted thereunder; or any
1186 entity that provides neonatal or pediatric hospital-based health
1187 care services by licensed practitioners solely within a hospital
1188 licensed under chapter 395.
1189 3.-tet Entities that are owned, directly or indirectly, by
1190 an entity licensed or registered by the state pursuant to
1191 chapter 395; entities that are owned, directly or indirectly, by
1192 an entity licensed or registered by the state and providing only
1193 health care services within the scope of services authorized
1194 pursuant to their respective licenses under ss. 383.30-383.332,
1195 chapter 390, chapter 394, chapter 397, this chapter except part
1196 X, chapter 429, chapter 463, chapter 465, chapter 466, chapter
1197 478, chapter 484, or chapter 651; end-stage renal disease
1198 providers authorized under 42 C.F.R. part 405, subpart U;
1199 providers certified under 42 C.F.R. part 485, subpart B or
1200 subpart H; providers certified by the Centers for Medicare and
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1201 Medicaid Services under the federal Clinical Laboratory
1202 Improvement Amendments and the federal rules adopted thereunder;
1203 or any entity that provides neonatal or pediatric hospital-based
1204 health care services by licensed practitioners solely within a
1205 hospital under chapter 395.
1206 .!.:_-fe:+- Entities that are under common ownership, directly
1207 or indirectly, with an entity licensed or registered by the
1208 state pursuant to chapter 395; entities that are under common
1209 ownership, directly or indirectly, with an entity licensed or
1210 registered by the state and providing only health care services
1211 within the scope of services authorized pursuant to their
1212 respective licenses under ss. 383.30-383.332, chapter 390,
1213 chapter 394, chapter 397, this chapter except part X, chapter
1214 429, chapter 463, chapter 465, chapter 466, chapter 478, chapter
1215 484, or chapter 651; end-stage renal disease providers
1216 authorized under 42 C.F.R. part 405, subpart U; providers
1217 certified under 42 C.F.R. part 485, subpart B or subpart H;
1218 providers certified by the Centers for Medicare and Medicaid
1219 Services under the federal Clinical Laboratory Improvement
1220 Amendments and the federal rules adopted thereunder; or any
1221 entity that provides neonatal or pediatric hospital-based health
1222 care services by licensed practitioners solely within a hospital
1223 licensed under chapter 395.
1224 2-.:_-te+- An entity that is exempt from federal taxation under
1225 26 U.S.C. s. 50l(c) (3) or (4), an employee stock ownership plan
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1226 under 26 U.S.C. s. 409 that has a board of trustees at least
1227 two-thirds of which are Florida-licensed health care
1228 practitioners and provides only physical therapy services under
1229 physician orders, any community college or university clinic,
1230 and any entity owned or operated by the federal or state
1231 government, including agencies, subdivisions, or municipalities
1232 thereof.
1233 6.-f-£+ A sole proprietorship, group practice, partnership,
1234 or corporation that provides health care services by physicians
1235 covered bys. 627.419, that is directly supervised by one or
1236 more of such physicians, and that is wholly owned by one or more
1237 of those physicians or by a physician and the spouse, parent,
1238 child, or sibling of that physician.
1239 2..:_~ A sole proprietorship, group practice, partnership,
1240 or corporation that provides health care services by licensed
1241 health care practitioners under chapter 457, chapter 458,
1242 chapter 459, chapter 460, chapter 461, chapter 462, chapter 463,
1243 chapter 466, chapter 467, chapter 480, chapter 484, chapter 486,
1244 chapter 490, chapter 491, or part I, part III, part X, part
1245 XIII, or part XIV of chapter 468, ors. 464.012, and that is
1246 wholly owned by one or more licensed health care practitioners,
1247 or the licensed health care practitioners set forth in this
1248 subparagraph paragraph and the spouse, parent, child, or sibling
1249 of a licensed health care practitioner if one of the owners who
1250 is a licensed health care practitioner is supervising the
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1251 business activities and is legally responsible for the entity's
1252 compliance with all federal and state laws. However, a health
1253 care practitioner may not supervise services beyond the scope of
1254 the practitioner's license, except that, for the purposes of
1255 this part, a clinic owned by a licensee ins. 456.053(3)(b)
1256 which provides only services authorized pursuant to s.
1257 456. 053 ( 3) (b) may be supervised by a licensee specified in s.
1258 456.053(3) (b).
1259 ~-f-R-+- Clinical facilities affiliated with an accredited
1260 medical school at which training is provided for medical
1261 students, residents, or fellows.
1262 ~+:i:+ Entities that provide only oncology or radiation
1263 therapy services by physicians licensed under chapter 458 or
1264 chapter 459 or entities that provide oncology or radiation
1265 therapy services by physicians licensed under chapter 458 or
1266 chapter 459 which are owned by a corporation whose shares are
1267 publicly traded on a recognized stock exchange.
1268 10.-H+ Clinical facilities affiliated with a college of
1269 chiropractic accredited by the Council on Chiropractic Education
1270 at which training is provided for chiropractic students.
1271 11."'t"'*"t Entities that provide licensed practitioners to
1272 staff emergency departments or to deliver anesthesia services in
1273 facilities licensed under chapter 395 and that derive at least
1274 90 percent of their gross annual revenues from the provision of
1275 such services. Entities claiming an exemption from licensure
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1276 under this subparagraph paragraph must provide documentation
1277 demonstrating compliance.
1278 12.-f-±-+- Orthotic, prosthetic, pediatric cardiology, or
1279 perinatology clinical facilities or anesthesia clinical
1280 facilities that are not otherwise exempt under subparagraph 1.
1281 or subparagraph 11. paragraph (a) or paragraph (k) and that are
1282 a publicly traded corporation or are wholly owned, directly or
1283 indirectly, by a publicly traded corporation. As used in this
1284 subparagraph paragraph, a publicly traded corporation is a
1285 corporation that issues securities traded on an exchange
1286 registered with the United States Securities and Exchange
1287 Commission as a national securities exchange.
1288 13.--f-ffi+- Entities that are owned by a corporation that has
1289 $250 million or more in total annual sales of health care
1290 services provided by licensed health care practitioners where
1291 one or more of the persons responsible for the operations of the
1292 entity is a health care practitioner who is licensed in this
1293 state and who is responsible for supervising the business
1294 activities of the entity and is responsible for the entity's
1295 compliance with state law for purposes of this part.
1296 14.-fi::r+- Entities that employ 50 or more licensed health
1297 care practitioners licensed under chapter 458 or chapter 459
1298 where the billing for medical services is under a single tax
1299 identification number. The application for exemption under this
1300 subsection must include shall contain information that includes:
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1301 the name, residence, and business address and telephone phone
1302 number of the entity that owns the practice; a complete list of
1303 the names and contact information of all the officers and
1304 directors of the corporation; the name, residence address,
1305 business address, and medical license number of each licensed
1306 Florida health care practitioner employed by the entity; the
1307 corporate tax identification number of the entity seeking an
1308 exemption; a listing of health care services to be provided by
1309 the entity at the health care clinics owned or operated by the
1310 entityL and a certified statement prepared by an independent
1311 certified public accountant which states that the entity and the
1312 health care clinics owned or operated by the entity have not
1313 received payment for health care services under medical payments
1314 personal injury protection insurance coverage for the preceding
1315 year. If the agency determines that an entity that which is
1316 exempt under this subsection has received payments for medical
1317 services under medical payments personal injury protection
1318 insurance coverage, the agency may deny or revoke the exemption
1319 from licensure under this subsection.
1320 J..el Notwithstanding paragraph (a) this subsection, an
1321 entity is shall be deemed a clinic and must be licensed under
1322 this part in order to receive medical payments coverage
1323 reimbursement under s. 627.7265 unless the entity is: -t-fte
1324 Florida Heter Vehicle Ho Fault Law, ss. 627.730 627.7405, unless
1325 e1ceFRpted under s. 627.736(5) (h).
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1326 1. Wholly owned by a physician licensed under chapter 458
1327 or chapter 459, or by the physician and the spouse, parent,
1328 child, or sibling of the physician;
1329 2. Wholly owned by a dentist licensed under chapter 466,
1330 or by the dentist and the spouse, parent, child, or sibling of
1331 the dentist;
1332 3. Wholly owned by a chiropractic physician licensed under
1333 chapter 460, or by the chiropractic physician and the spouse,
1334 parent, child, or sibling of the chiropractic physician;
1335 4. A hospital or ambulatory surgical center licensed under
1336 chapter 395;
1337 5. An entity that wholly owns or is wholly owned, directly
1338 or indirectly, by a hospital or hospitals licensed under chapter
1339 395;
1340 6. A clinical facility affiliated with an accredited
1341 medical school at which training is provided for medical
1342 students, residents, or fellows;
1343 7. Certified under 42 C.F.R. part 485, subpart H; or
1344 8. Owned by a publicly traded corporation, either directly
1345 or indirectly through its subsidiaries, which has $250 million
1346 or more in total annual sales of health care services provided
1347 by licensed health care practitioners, if one or more of the
1348 persons responsible for the operations of the entity are health
1349 care practitioners who are licensed in this state and are
1350 responsible for supervising the business activities of the
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1351 entity and the entity's compliance with state law for purposes
1352 of this subsection.
1353 Section 27. Subsection (5) of section 400.991, Florida
1354 Statutes, is amended to read:
1355 400.991 License requirements; background screenings;
1356 prohibitions.-
1357 (5) All agency forms for licensure application or
1358 exemption from licensure under this part must contain the
1359 following statement:
1360
1361 INSURANCE FRAUD NOTICE.-A person commits a fraudulent
1362 insurance act, as defined ins. 626.989, Florida
1363 Statutes, if the person Wfi-6- knowingly submits a false,
1364 misleading, or fraudulent application or other
1365 document when applying for licensure as a health care
1366 clinic, seeking an exemption from licensure as a
1367 health care clinic, or demonstrating compliance with
1368 part X of chapter 400, Florida Statutes, with the
1369 intent to use the license, exemption from licensure,
1370 or demonstration of compliance to provide services or
1371 seek reimbursement under a motor vehicle liability
1372 insurance policy's medical payments coverage 4::fl.e
1373 Florida Heter Vehicle Ho Fault Law, coffifilits a
1374 fraudulent insurance act, as defined ins. 626.989,
1375 Florida Statutes. A person who presents a claim for
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1376 benefits under medical payments coverage, personal
1377 injury protection benefits knowing that the payee
1378 knowingly submitted such health care clinic
1379 application or document, commits insurance fraud, as
1380 defined ins. 817.234, Florida Statutes.
1381 Section 28. Paragraph (g) of subsection (1) of section
1382 400.9935, Florida Statutes, is amended to read:
1383 400.9935 Clinic responsibilities.-
1384 (1) Each clinic shall appoint a medical director or clinic
1385 director who shall agree in writing to accept legal
1386 responsibility for the following activities on behalf of the
1387 clinic. The medical director or the clinic director shall:
1388 (g) Conduct systematic reviews of clinic billings to
1389 ensure that the billings are not fraudulent or unlawful. Upon
1390 discovery of an unlawful charge, the medical director or clinic
1391 director shall take immediate corrective action. If the clinic
1392 performs only the technical component of magnetic resonance
1393 imaging, static radiographs, computed tomography, or positron
1394 emission tomography, and provides the professional
1395 interpretation of such services, in a fixed facility that is
1396 accredited by a national accrediting organization that is
1397 approved by the Centers for Medicare and Medicaid Services for
1398 magnetic resonance imaging and advanced diagnostic imaging
1399 services and if, in the preceding quarter, the percentage of
1400 scans performed by that clinic which was billed to motor vehicle
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1401 all personal injury protection insurance carriers under medical
1402 payments coverage was less than 15 percent, the chief financial
1403 officer of the clinic may, in a written acknowledgment provided
1404 to the agency, assume the responsibility for the conduct of the
1405 systematic reviews of clinic billings to ensure that the
1406 billings arc not fraudulent or unlawful.
1407 Section 29. Subsection (28) of section 409.901, Florida
1408 Statutes, is amended to read:
1409 409.901 Definitions; ss. 409.901-409.920.-As used in ss.
1410 409.901-409.920, except as otherwise specifically provided, the
1411 term:
1412 (28) "Third-party benefit" means any benefit that is or
1413 may be available at any time through contract, court award,
1414 judgment, settlement, agreement, or any arrangement between a
1415 third party and any person or entity, including, without
1416 limitation, a Medicaid recipient, a provider, another third
1417 party, an insurer, or the agency, for any Medicaid-covered
1418 injury, illness, goods, or services, including costs of medical
1419 services related thereto, for bodily personal injury or for
1420 death of the recipient, but specifically excluding policies of
1421 life insurance policies on the recipient, unless available under
1422 terms of the policy to pay medical expenses before prior to
1423 death. The term includes, without limitation, collateral, as
1424 defined in this scction~7 health insurancc~7 any benefit under a
1425 health maintenance organization, a preferred provider
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1426 arrangement, a prepaid health clinic, liability insurance,
1427 uninsured motorist insurance, or medical payments coverage; or
1428 personal injury protection coverage, medical benefits under
1429 workers' compensation, and any obligation under law or equity to
1430 provide medical support.
1431 Section 30. Paragraph (f) of subsection (11) of section
1432 409.910, Florida Statutes, is amended to read:
1433 409.910 Responsibility for payments on behalf of Medicaid-
1434 eligible persons when other parties are liable.-
1435 (11) The agency may, as a matter of right, in order to
1436 enforce its rights under this section, institute, intervene in,
1437 or join any legal or administrative proceeding in its own name
1438 in one or more of the following capacities: individually, as
1439 subrogee of the recipient, as assignee of the recipient, or as
1440 lienholder of the collateral.
1441 (f) Notwithstanding any provision in this section to the
1442 contrary, in the event of an action in tort against a third
1443 party in which the recipient or his or her legal representative
1444 is a party which results in a judgment, award, or settlement
1445 from a third party, the amount recovered shall be distributed as
1446 follows:
1447 1. After attorney attorney's fees and taxable costs as
1448 defined by the Florida Rules of Civil Procedure, one-half of the
1449 remaining recovery shall be paid to the agency up to the total
1450 amount of medical assistance provided by Medicaid.
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1451 2. The remaining amount of the recovery shall be paid to
1452 the recipient.
1453 3. For purposes of calculating the agency's recovery of
1454 medical assistance benefits paid, the fee for services of an
1455 attorney retained by the recipient or his or her legal
1456 representative shall be calculated at 25 percent of the
1457 judgment, award, or settlement.
1458 4. Notwithstanding any other provision of this section to
1459 the contrary, the agency shall be entitled to all medical
1460 coverage benefits up to the total amount of medical assistance
1461 provided by Medicaid. For purposes of this paragraph, the term
1462 "medical coverage" means any benefits under health insurance, a
1463 health maintenance organization, a preferred provider
1464 arrangement, or a prepaid health clinic, and the portion of
1465 benefits designated for medical payments under coverage for
1466 workers' compensation coverage, motor vehicle insurance
1467 coverage, personal injury protection, and casualty coverage.
1468 Section 31. Paragraph (k) of subsection (2) of section
1469 456.057, Florida Statutes, is amended to read:
1470 456.057 Ownership and control of patient records; report
1471 or copies of records to be furnished; disclosure of
1472 information.-
1473 (2) As used in this section, the terms "records owner,"
1474 "health care practitioner," and "health care practitioner's
1475 employer" do not include any of the following persons or
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1476 entities; furthermore, the following persons or entities are not
1477 authorized to acquire or own medical records, but are authorized
1478 under the confidentiality and disclosure requirements of this
1479 section to maintain those documents required by the part or
1480 chapter under which they are licensed or regulated:
1481 (k) Persons or entities practicing under s. 627.7265 -s--.
1482 627.736(7).
1483 Section 32. Paragraphs (ee) and (ff) of subsection (1) of
1484 section 456.072, Florida Statutes, are amended to read:
1485 456.072 Grounds for discipline; penalties; enforcement.-
1486 (1) The following acts shall constitute grounds for which
1487 the disciplinary actions specified in subsection (2) may be
1488 taken:
1489 (ee) With respect to making a medical payments coverage
1490 personal injury protection claim under s. 627.7265 as required
1491 bys. 627.736, intentionally submitting a claim, statement, or
1492 bill that has been upcoded. As used in this paragraph, the term
1493 "upcoded" means an action that submits a billing code that would
1494 result in a greater payment amount than would be paid using a
1495 billing code that accurately describes the services performed.
1496 The term does not include an otherwise lawful bill by a magnetic
1497 resonance imaging facility, which globally combines both
1498 technical and professional components, if the amount of the
1499 global bill is not more than the components if billed
1500 separately; however, payment of such a bill constitutes payment
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1501 in full for all components of such service "upcoded" as defined
1502 ins. 627.732.
1503 (ff) With respect to making a medical payments coverage
1504 personal injury protection claim as required under s. 627.7265
1505 bys. 627.736, intentionally submitting a claim, statement, or
1506 bill for payment of services that were not rendered.
1507 Section 33. Paragraphs (i) and (o) of subsection (1) of
1508 section 626.9541, Florida Statutes, are amended to read:
1509 626.9541 Unfair methods of competition and unfair or
1510 deceptive acts or practices defined.-
1511 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
1512 ACTS.-The following are defined as unfair methods of competition
1513 and unfair or deceptive acts or practices:
1514 (i) Unfair claim settlement practices.-
1515 1. Attempting to settle claims on the basis of an
1516 application, when serving as a binder or intended to become a
1517 part of the policy, or any other material document which was
1518 altered without notice to, or knowledge or consent of, the
1519 insured;
1520 2. A material misrepresentation made to an insured or any
1521 other person having an interest in the proceeds payable under
1522 such contract or policy, for the purpose and with the intent of
1523 effecting settlement of such claims, loss, or damage under such
1524 contract or policy on less favorable terms than those provided
1525 in, and contemplated by, such contract or policy; e-r-
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1526 3. Corrunitting or performing with such frequency as to
1527 indicate a general business practice any of the following:
1528 a. Failing to adopt and implement standards for the proper
1529 investigation of claims;
1530 b. Misrepresenting pertinent facts or insurance policy
1531 provisions relating to coverages at issue;
1532 c. Failing to acknowledge and act promptly upon
1533 corrununications with respect to claims;
1534 d. Denying claims without conducting reasonable
1535 investigations based upon available information;
1536 e. Failing to affirm or deny full or partial coverage of
1537 claims, and, as to partial coverage, the dollar amount or extent
1538 of coverage, or failing to provide a written statement that the
1539 claim is being investigated, upon the written request of the
1540 insured within 30 days after proof-of-loss statements have been
1541 completed;
1542 f. Failing to promptly provide a reasonable explanation in
1543 writing to the insured of the basis in the insurance policy, in
1544 relation to the facts or applicable law, for denial of a claim
1545 or for the offer of a compromise settlement;
1546 g. Failing to promptly notify the insured of any
1547 additional information necessary for the processing of a claim;
1548 or
1549 h. Failing to clearly explain the nature of the requested
1550 information and the reasons why such information is necessary.
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1551 1. Failing to pay personal injury protection insurance
1552 claims within the time periods required by s. 627. 736 ( 4) (b) . The
1553 office may order the insurer to pay restitution to a
1554 policyholder, medical provider, or other claimant, including
1555 interest at a rate consistent with the amount set forth ins.
1556 55.03(1), for the time period within which an insurer fails to
1557 pay claims as required by law. Restitution is in addition to any
1558 other penalties allowed by law, including, but not limited to,
1559 the suspension of the insurer's certificate of authority.
1560 4. Failing to pay undisputed amounts of partial or full
1561 benefits owed under first-party property insurance policies
1562 within 90 days after an insurer receives notice of a residential
1563 property insurance claim, determines the amounts of partial or
1564 full benefits, and agrees to coverage, unless payment of the
1565 undisputed benefits is prevented by an act of God, prevented by
1566 the impossibility of performance, or due to actions by the
1567 insured or claimant that constitute fraud, lack of cooperation,
1568 or intentional misrepresentation regarding the claim for which
1569 benefits are owed.
1570 (o) Illegal dealings in premiums; excess or reduced
1571 charges for insurance.-
1572 1. Knowingly collecting any sum as a premium or charge for
1573 insurance, which is not then provided, or is not in due course
1574 to be provided, subject to acceptance of the risk by the
1575 insurer, by an insurance policy issued by an insurer as
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1576 permitted by this code.
1577 2. Knowingly collecting as a premium or charge for
1578 insurance any sum in excess of or less than the premium or
1579 charge applicable to such insurance, in accordance with the
1580 applicable classifications and rates as filed with and approved
1581 by the office, and as specified in the policy; or, in cases when
1582 classifications, premiums, or rates are not required by this
1583 code to be so filed and approved, premiums and charges collected
1584 from a Florida resident in excess of or less than those
1585 specified in the policy and as fixed by the insurer.
1586 Notwithstanding any other provision of law, this provision shall
1587 not be deemed to prohibit the charging and collection, by
1588 surplus lines agents licensed under part VIII of this chapter,
1589 of the amount of applicable state and federal taxes, or fees as
1590 authorized bys. 626.916(4), in addition to the premium required
1591 by the insurer or the charging and collection, by licensed
1592 agents, of the exact amount of any discount or other such fee
1593 charged by a credit card facility in connection with the use of
1594 a credit card, as authorized by subparagraph (q)3., in addition
1595 to the premium required by the insurer. This subparagraph shall
1596 not be construed to prohibit collection of a premium for a
1597 universal life or a variable or indeterminate value insurance
1598 policy made in accordance with the terms of the contract.
1599 3.a. Imposing or requesting an additional premium for
1600 bodily injury liability coverage, property damage liability
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1601 coverage a policy of motor vehicle liability, personal injury
1602 protection, medical payments coverage payment, or collision
1603 coverage in a motor vehicle liability insurance policy insurance
1604 or any combination thereof or refusing to renew the policy
1605 solely because the insured was involved in a motor vehicle
1606 accident unless the insurer's file contains information from
1607 which the insurer in good faith determines that the insured was
1608 substantially at fault in the accident.
1609 b. An insurer which imposes and collects such a surcharge
1610 or which refuses to renew such policy shall, in conjunction with
1611 the notice of premium due or notice of nonrenewal, notify the
1612 named insured that he or she is entitled to reimbursement of
1613 such amount or renewal of the policy under the conditions listed
1614 below and will subsequently reimburse him or her or renew the
1615 policy, if the named insured demonstrates that the operator
1616 involved in the accident was:
1617 (I) Lawfully parked;
1618 (II) Reimbursed by, or on behalf of, a person responsible
1619 for the accident or has a judgment against such person;
1620 (III) Struck in the rear by another vehicle headed in the
1621 same direction and was not convicted of a moving traffic
1622 violation in connection with the accident;
1623 (IV) Hit by a "hit-and-run" driver, if the accident was
1624 reported to the proper authorities within 24 hours after
1625 discovering the accident;
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1626 (V) Not convicted of a moving traffic violation in
1627 connection with the accident, but the operator of the other
1628 automobile involved in such accident was convicted of a moving
1629 traffic violation;
1630 (VI) Finally adjudicated not to be liable by a court of
1631 competent jurisdiction;
1632 (VII) In receipt of a traffic citation which was dismissed
1633 or nolle prossed; or
1634 (VIII) Not at fault as evidenced by a written statement
1635 from the insured establishing facts demonstrating lack of fault
1636 which are not rebutted by information in the insurer's file from
1637 which the insurer in good faith determines that the insured was
1638 substantially at fault.
1639 c. In addition to the other provisions of this
1640 subparagraph, an insurer may not fail to renew a policy if the
1641 insured has had only one accident in which he or she was at
1642 fault within the current 3-year period. However, an insurer may
1643 nonrenew a policy for reasons other than accidents in accordance
1644 withs. 627.728. This subparagraph does not prohibit nonrenewal
1645 of a policy under which the insured has had three or more
1646 accidents, regardless of fault, during the most recent 3-year
1647 period.
1648 4. Imposing or requesting an additional premium for, or
1649 refusing to renew, a policy for motor vehicle insurance solely
1650 because the insured committed a noncriminal traffic infraction
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1651 as described ins. 318.14 unless the infraction is:
1652 a. A second infraction committed within an 18-month
1653 period, or a third or subsequent infraction committed within a
1654 36-month period.
1655 b. A violation of s. 316.183, when such violation is a
1656 result of exceeding the lawful speed limit by more than 15 miles
1657 per hour.
1658 5. Upon the request of the insured, the insurer and
1659 licensed agent shall supply to the insured the complete proof of
1660 fault or other criteria which justifies the additional charge or
1661 cancellation.
1662 6. No insurer shall impose or request an additional
1663 premium for motor vehicle insurance, cancel or refuse to issue a
1664 policy, or refuse to renew a policy because the insured or the
1665 applicant is a handicapped or physically disabled person, so
1666 long as such handicap or physical disability does not
1667 substantially impair such person's mechanically assisted driving
1668 ability.
1669 7. No insurer may cancel or otherwise terminate any
1670 insurance contract or coverage, or require execution of a
1671 consent to rate endorsement, during the stated policy term for
1672 the purpose of offering to issue, or issuing, a similar or
1673 identical contract or coverage to the same insured with the same
1674 exposure at a higher premium rate or continuing an existing
1675 contract or coverage with the same exposure at an increased
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1676 premium.
1677 8. No insurer may issue a nonrenewal notice on any
1678 insurance contract or coverage, or require execution of a
167 9 consent to rate endorsement, for the purpose of offering to
1680 issue, or issuing, a similar or identical contract or coverage
1681 to the same insured at a higher premium rate or continuing an
1682 existing contract or coverage at an increased premium without
1683 meeting any applicable notice requirements.
1684 9. No insurer shall, with respect to premiums charged for
1685 motor vehicle insurance, unfairly discriminate solely on the
1686 basis of age, sex, marital status, or scholastic achievement.
1687 10. Imposing or requesting an additional premium for motor
1688 vehicle comprehensive or uninsured motorist coverage solely
1689 because the insured was involved in a motor vehicle accident or
1690 was convicted of a moving traffic violation.
1691 11. No insurer shall cancel or issue a nonrenewal notice
1692 on any insurance policy or contract without complying with any
1693 applicable cancellation or nonrenewal provision required under
1694 the Florida Insurance Code.
1695 12. No insurer shall impose or request an additional
1696 premium, cancel a policy, or issue a nonrenewal notice on any
1697 insurance policy or contract because of any traffic infraction
1698 when adjudication has been withheld and no points have been
1699 assessed pursuant to s. 318.14(9) and (10). However, this
1700 subparagraph does not apply to traffic infractions involving
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1701 accidents in which the insurer has incurred a loss due to the
1702 fault of the insured.
1703 Section 34. Paragraph (a) of subsection (1) of section
1704 626.989, Florida Statutes, is amended to read:
1705 626.989 Investigation by department or Division of
1706 Investigative and Forensic Services; compliance; immunity;
1707 confidential information; reports to division; division
1708 investigator's power of arrest.-
1709 (1) For the purposes of this section:
1710 (a) A person commits a "fraudulent insurance act" if the
1711 person:
1712 1. Knowingly and with intent to defraud presents, causes
1713 to be presented, or prepares with knowledge or belief that it
1714 will be presented, to or by an insurer, self-insurer, self-
1715 insurance fund, servicing corporation, purported insurer,
1716 broker, or any agent thereof, any written statement as part of,
1717 or in support of, an application for the issuance of, or the
1718 rating of, any insurance policy, or a claim for payment or other
1719 benefit pursuant to any insurance policy, which the person knows
1720 to contain materially false information concerning any fact
1721 material thereto or if the person conceals, for the purpose of
1722 misleading another, information concerning any fact material
1723 thereto.
1724 2. Knowingly submits:
1725 a. A false, misleading, or fraudulent application or other
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1726 document when applying for licensure as a health care clinic,
1727 seeking an exemption from licensure as a health care clinic, or
1728 demonstrating compliance with part X of chapter 400 with an
1729 intent to use the license, exemption from licensure, or
1730 demonstration of compliance to provide services or seek
1731 reimbursement under a motor vehicle liability insurance policy's
1732 medical payments coverage the Florida Heter Vehicle ~to Fault
1733 f,a-w.
1734 b. A claim for payment or other benefit under medical
1735 payments coverage pursuant to a personal injury protection
1736 insurance policy under the Florida Heter Vehicle No Fault Law if
1737 the person knows that the payee knowingly submitted a false,
1738 misleading, or fraudulent application or other document when
1739 applying for licensure as a health care clinic, seeking an
1740 exemption from licensure as a health care clinic, or
1741 demonstrating compliance with part X of chapter 400.
1742 Section 35. Subsection (1) of section 627.06501, Florida
1743 Statutes, is amended to read:
1744 627.06501 Insurance discounts for certain persons
1745 completing driver improvement course.-
1746 ( 1) Any rate, rating schedule, or rating manual for the
1747 liability, medical payments personal injury protection, and
1748 collision coverages of a motor vehicle insurance policy filed
1749 with the office may provide for an appropriate reduction in
1750 premium charges as to such coverages if w-heft the principal
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1751 operator on the covered vehicle has successfully completed a
1752 driver improvement course approved and certified by the
1753 Department of Highway Safety and Motor Vehicles which is
1754 effective in reducing crash or violation rates, or both, as
1755 determined pursuant to s. 318.1451(5). Any discount, not to
1756 exceed 10 percent, used by an insurer is presumed to be
1757 appropriate unless credible data demonstrates otherwise.
1758 Section 36. Subsection (15) is added to section 627.0651,
1759 Florida Statutes, to read:
1760 627.0651 Making and use of rates for motor vehicle
1761 insurance.-
1762 ( 15) Initial rate filings for motor vehicle liability
1763 policies which are submitted to the office on or after January
1764 1, 2021, must reflect the financial responsibility requirements
1765 ins. 324.022, as amended, and may be approved only through the
1766 file and use process under s. 627.0651(1) (a).
1767 Section 37. Subsection (1) of section 627.0652, Florida
1768 Statutes, is amended to read:
1769 627.0652 Insurance discounts for certain persons
1770 completing safety course.-
1771 (1) Any rates, rating schedules, or rating manuals for the
1772 liability, medical payments personal injury protection, and
1773 collision coverages of a motor vehicle insurance policy filed
1774 with the office must shall provide for an appropriate reduction
1775 in premium charges as to such coverages if Wftefi- the principal
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1776 operator on the covered vehicle is an insured 55 years of age or
1777 older who has successfully completed a motor vehicle accident
1778 prevention course approved by the Department of Highway Safety
1779 and Motor Vehicles. Any discount used by an insurer is presumed
1780 to be appropriate unless credible data demonstrates otherwise.
1781 Section 3 8. Subsections ( 1) , ( 3) , and ( 6) of section
1782 627.0653, Florida Statutes, are amended to read:
1783 627.0653 Insurance discounts for specified motor vehicle
1784 equipment.-
1785 (1) Any rates, rating schedules, or rating manuals for the
1786 liability, medical payments personal injury protection, and
1787 collision coverages of a motor vehicle insurance policy filed
1788 with the office must shall provide a premium discount if the
1789 insured vehicle is equipped with factory-installed, four-wheel
1790 antilock brakes.
1791 (3) Any rates, rating schedules, or rating manuals for
1792 personal injury protection coverage and medical payments
1793 coverage, if offered, of a motor vehicle insurance policy filed
1794 with the office must shall provide a premium discount if the
1795 insured vehicle is equipped with one or more air bags that which
1796 are factory installed.
1797 (6) The Office of Insurance Regulation may approve a
1798 premium discount to any rates, rating schedules, or rating
1799 manuals for the liability, medical payments personal injury
1800 protection, and collision coverages of a motor vehicle insurance
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1801 policy filed with the office if the insured vehicle is equipped
1802 with an automated driving system or electronic vehicle collision
1803 avoidance technology that is factory installed or a retrofitted
1804 system and that complies with National Highway Traffic Safety
1805 Administration standards.
1806 Section 39. Section 627.4132, Florida Statutes, is amended
1807 to read:
1808 627.4132 Stacking of coverages prohibited.-If an insured
1809 or named insured is protected by any type of motor vehicle
1810 insurance policy for bodily injury and property damage
1811 liability, personal injury protection, or other coverage, the
1812 policy must shall provide that the insured or named insured is
1813 protected only to the extent of the coverage she or he has on
1814 the vehicle involved in the accident. However, if none of the
1815 insured's or named insured's vehicles are -i-fr involved in the
1816 accident, coverage is available only to the extent of coverage
1817 on any one of the vehicles with applicable coverage. Coverage on
1818 any other vehicles may shall not be added to or stacked upon
1819 that coverage. This section does not apply:
1820 (1) To uninsured motorist coverage that which is
1821 separately governed bys. 627.727.
1822 (2) To reduce the coverage available by reason of
1823 insurance policies insuring different named insureds.
1824 Section 40. Section 627.7263, Florida Statutes, is amended
1825 to read:
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1826 627.7263 Rental and leasing driver's insurance to be
1827 primary; exception.-
1828 (1) The valid and collectible liability insurance and
182 9 medical payments coverage or personal injury protection
1830 insurance providing coverage for the lessor of a motor vehicle
1831 for rent or lease is primary unless otherwise stated in at least
1832 10-point type on the face of the rental or lease agreement. Such
1833 insurance is primary for the limits of liability and personal
1834 injury protection coverage as required bys. 324.021(7) and the
1835 medical payments coverage limit specified under s. 627.7265 -s-s.-
18 3 6 3 2 4 . 0 21 ( 7 ) and 6 2 7 . 7 3 6 .
1837 (2) If the lessee's coverage is to be primary, the rental
1838 or lease agreement must contain the following language, in at
1839 least 10-point type:
1840
1841 "The valid and collectible liability insurance and
1842 medical payments coverage personal injury protection
1843 insurance of an any authorized rental or leasing
1844 driver is primary for the limits of liability afTEl:
1845 personal injury protection coverage required under
1846 section 324.021(7), Florida Statutes, and the medical
1847 payments coverage limit specified under section
1848 627.7265 by ss. 324.021(7) and 627.736, Florida
1849 Statutes."
1850 Section 41. Section 627.7265, Florida Statutes, is created
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1851 to read:
1852 627.7265 Motor vehicle insurance; medical payments
1853 coverage.-
1854 (1) Medical payments coverage must protect the named
1855 insured, resident relatives, persons operating the insured motor
1856 vehicle, passengers in the insured motor vehicle, and persons
1857 who are struck by the insured motor vehicle and suffer bodily
1858 injury while not an occupant of a self-propelled motor vehicle
1859 at a limit of at least $5,000 for medical expense incurred due
1860 to bodily injury, sickness, or disease arising out of the
1861 ownership, maintenance, or use of a motor vehicle. The coverage
1862 must provide an additional death benefit of at least $5,000.
1863 (a) Before issuing a motor vehicle liability insurance
1864 policy that is furnished as proof of financial responsibility
1865 under s. 324.031, the insurer must offer medical payments
1866 coverage at limits of $5,000 and $10,000. The insurer may also
1867 offer medical payments coverage at any limit greater than
1868 $5,000.
1869 (b) The medical payments coverage must be offered with an
1870 option with no deductible. The insurer may also offer medical
1871 payments coverage with a deductible not to exceed $500.
1872 (c) Each motor vehicle liability insurance policy that is
1873 furnished as proof of financial responsibility under s. 324.031
1874 is deemed to have:
1875 1. Medical payments coverage to a limit of $10,000, unless
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1876 the insurer obtains the policyholder's written refusal of
1877 medical payments coverage or written selection of medical
1878 payments coverage at a limit other than $10,000. The rejection
1879 or selection of coverage at a limit other than $10,000 must be
1880 made on a form approved by the office.
1881 2. No medical payments coverage deductible, unless the
1882 insurer obtains the policyholder's written selection of a
1883 deductible of up to $500. The selection of a deductible must be
1884 made on a form approved by the office.
1885 (d)l. The forms in subparagraphs (c)l. and 2. must fully
1886 advise the applicant of the nature of the coverage being
1887 rejected or the policy limit or deductible being selected. If
1888 the form is signed by a named insured, it is conclusively
1889 presumed that there was an informed, knowing rejection of the
1890 coverage or election of the policy limit or deductible selected.
1891 2. Unless the policyholder requests in writing the
1892 coverage specified in this section, it need not be provided in
1893 or supplemental to any other policy that renews, insures,
1894 extends, changes, supersedes, or replaces an existing policy if
1895 the policyholder has rejected the coverage specified in this
1896 section or has selected an alternative coverage limit or
1897 deductible. At least annually, the insurer shall provide the
1898 policyholder with a notice of the availability of such coverage
1899 in a form approved by the office. The notice must be part of,
1900 and attached to, the notice of premium and must provide for a
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1901 means to allow the insured to request medical payments coverage
1902 at the limits and deductibles required to be offered under this
1903 section. The notice must be given in a manner approved by the
1904 office. Receipt of this notice does not constitute an
1905 affirmative waiver of the insured's right to medical payments
1906 coverage if the insured has not signed a selection or rejection
1907 form.
1908 (e) This section may not be construed to limit any other
1909 coverage made available by an insurer.
1910 (2) Upon receiving notice of an accident that is
1911 potentially covered by medical payments coverage benefits, the
1912 insurer must reserve $5,000 of medical payments coverage
1913 benefits for payment to physicians licensed under chapter 458 or
1914 chapter 459 or dentists licensed under chapter 466 who provide
1915 emergency services and care, as defined ins. 395.002, or who
1916 provide hospital inpatient care. The amount required to be held
1917 in reserve may be used only to pay claims from such physicians
1918 or dentists until 30 days after the date the insurer receives
1919 notice of the accident. After the 30-day period, any amount of
1920 the reserve for which the insurer has not received notice of
1921 such claims may be used by the insurer to pay other claims. This
1922 subsection does not require an insurer to establish a claim
1923 reserve for insurance accounting purposes.
1924 (3) An insurer providing medical payments coverage
1925 benefits may not have a:
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192 6 (a) Lien on any recovery in tort by judgment, settlement,
1927 or otherwise for medical payments coverage benefits, whether
1928 suit has been filed or settlement has been reached without suit;
1929 or
1930 (b) Cause of action against a person to whom or for whom
1931 medical payments coverage benefits were paid, except when
1932 medical payments coverage benefits are paid by reason of fraud
1933 the person commits.
1934 (4) An insurer providing medical payments coverage may
1935 include provisions in its policy allowing for subrogation for
1936 medical payments benefits paid if the expenses giving rise to
1937 the payments were caused by the wrongful act or omission of
1938 another who is not also an insured under the policy paying the
1939 medical payments benefits. However, this subrogation right is
1940 inferior to the rights of the injured insured and is available
1941 only after all the insured's damages are recovered and the
1942 insured is made whole. An insured who obtains a recovery from a
1943 third party of the full amount of the damages sustained and
1944 delivers a release or satisfaction that impairs a medical
1945 payments insurer's subrogation right is liable to the insurer
1946 for repayment of medical payments benefits less any expenses of
1947 acquiring the recovery, including a prorated share of attorney
1948 fees and costs, and shall hold that net recovery in trust to be
1949 delivered to the medical payments insurer. The insurer may not
1950 include any provision in its policy allowing for subrogation for
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1951 any death benefit paid.
1952 Section 42. Subsections (1) and (7) of section 627.727,
1953 Florida Statutes, are amended to read:
1954 627.727 Motor vehicle insurance; uninsured and
1955 underinsured vehicle coverage; insolvent insurer protection.-
1956 (1) A Ne motor vehicle liability insurance policy that
1957 which provides bodily injury liability coverage may not shall be
1958 delivered or issued for delivery in this state with respect to
1959 any specifically insured or identified motor vehicle registered
1960 or principally garaged in this state~ unless uninsured motor
1961 vehicle coverage is provided therein or supplemental thereto for
1962 the protection of persons insured thereunder who are legally
1963 entitled to recover damages from owners or operators of
1964 uninsured motor vehicles because of bodily injury, sickness, or
1965 disease, including death, resulting therefrom. However, the
1966 coverage required under this section is not applicable if Wftefi,
1967 or to the extent that, an insured named in the policy makes a
1968 written rejection of the coverage on behalf of all insureds
1969 under the policy. If Wfi.eft a motor vehicle is leased for a period
1970 ~ 1 year or longer and the lessor of such vehicle, by the terms
1971 of the lease contract, provides liability coverage on the leased
1972 vehicle, the lessee of such vehicle has shall have the sole
1973 privilege to reject uninsured motorist coverage or to select
1974 lower limits than the bodily injury liability limits, regardless
1975 of whether the lessor is qualified as a self-insurer pursuant to
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1976 s. 324.171. Unless an insured, or~ lessee having the privilege
1977 of rejecting uninsured motorist coverage, requests such coverage
1978 or requests higher uninsured motorist limits in writing, the
1979 coverage or such higher uninsured motorist limits need not be
1980 provided in or supplemental to any other policy that which
1981 renews, extends, changes, supersedes, or replaces an existing
1982 policy with the same bodily injury liability limits when an
1983 insured or lessee had rejected the coverage. When an insured or
1984 lessee has initially selected limits of uninsured motorist
1985 coverage lower than her or his bodily injury liability limits,
1986 higher limits of uninsured motorist coverage need not be
1987 provided in or supplemental to any other policy that which
1988 renews, extends, changes, supersedes, or replaces an existing
1989 policy with the same bodily injury liability limits unless an
1990 insured requests higher uninsured motorist coverage in writing.
1991 The rejection or selection of lower limits must shall be made on
1992 a form approved by the office. The form must shall fully advise
1993 the applicant of the nature of the coverage and must shall state
1994 that the coverage is equal to bodily injury liability limits
1995 unless lower limits are requested or the coverage is rejected.
1996 The heading of the form must shall be in 12-point bold type and
1997 must shall state: "You are electing not to purchase certain
1998 valuable coverage that which protects you and your family or you
1999 are purchasing uninsured motorist limits less than your bodily
2000 injury liability limits when you sign this form. Please read
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2001 carefully." If this form is signed by a named insured, it will
2002 be conclusively presumed that there was an informed, knowing
2003 rejection of coverage or election of lower limits on behalf of
2004 all insureds. The insurer shall notify the named insured at
2005 least annually of her or his options as to the coverage required
2006 by this section. Such notice must shall be part of, and attached
2007 to, the notice of premium, must shall provide for a means to
2008 allow the insured to request such coverage, and must shall be
2009 given in a manner approved by the office. Receipt of this notice
2010 does not constitute an affirmative waiver of the insured's right
2011 to uninsured motorist coverage if where the insured has not
2012 signed a selection or rejection form. The coverage described
2013 under this section must shall be over and above, but may shall
2014 not duplicate, the benefits available to an insured under any
2015 workers' compensation law, personal injury protection benefits,
2016 disability benefits law, or similar law; under any automobile
2017 medical payments enpense coverage; under any motor vehicle
2018 liability insurance coverage; or from the owner or operator of
2019 the uninsured motor vehicle or any other person or organization
2020 jointly or severally liable together with such owner or operator
2021 for the accident~T and such coverage must shall cover the
2022 difference, if any, between the sum of such benefits and the
2023 damages sustained, up to the maximum amount of such coverage
2024 provided under this section. The amount of coverage available
2025 under this section may shall not be reduced by a setoff against
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2026 any coverage, including liability insurance. Such coverage does
2027 shall not inure directly or indirectly to the benefit of any
2028 workers' compensation or disability benefits carrier or any
2029 person or organization qualifying as a self-insurer under any
2030 workers' compensation or disability benefits law or similar law.
2031 (7) The legal liability of an uninsured motorist coverage
2032 insurer includes does not include damages in tort for pain,
2033 suffering, disability or physical impairment, disfigurement,
2034 mental anguish, aH-Ei- inconvenience, and the loss of capacity for
2035 the enjoyment of life experienced in the past and to be
2036 experienced in the future unless the injury or disease is
2037 described in one or more of paragraphs (a) (d) of s. 627.737(2).
2038 Section 43. Subsection (1) and paragraphs (a) and (b) of
2039 subsection (2) of section 627.7275, Florida Statutes, are
2040 amended to read:
2041 627.7275 Motor vehicle liability.-
2042 (1) A motor vehicle insurance policy providing personal
2043 injury protection as set forth ins. 627.736 may not be
2044 delivered or issued for delivery in this state for a w-i-t-ft
2045 respect to any specifically insured or identified motor vehicle
2046 registered or principally garaged in this state must provide
2047 bodily injury liability coverage and unless the policy also
2048 provides coverage for property damage liability coverage as
2049 required under bys. 324.022.
2050 (2) (a) Insurers writing motor vehicle insurance in this
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2051 state shall make available, subject to the insurers' usual
2052 underwriting restrictions:
2053 1. Coverage under policies as described in subsection (1)
2054 to an applicant for private passenger motor vehicle insurance
2055 coverage who is seeking the coverage in order to reinstate the
2056 applicant's driving privileges in this state if the driving
2057 privileges were revoked or suspended pursuant to s. 316.646 or
2058 s. 324.0221 due to the failure of the applicant to maintain
2059 required security.
2060 2. Coverage under policies as described in subsection (1),
2061 which includes bodily injury also provides liability coverage
2062 and property damage liability coverage, for bodily injury,
2063 death, and property damage arising out of the ownership,
2064 maintenance, or use of the motor vehicle in an amount not less
2065 than the minimum limits required under described ins.
2066 324.021(7) ors. 324.023 and which conforms to the requirements
2067 of s. 324.151, to an applicant for private passenger motor
2068 vehicle insurance coverage who is seeking the coverage in order
2069 to reinstate the applicant's driving privileges in this state
2070 after such privileges were revoked or suspended under s. 316.193
2071 ors. 322.26(2) for driving under the influence.
2072 (b) The policies described in paragraph (a) must shall be
2073 issued for at least 6 months and, as to the minimum coverages
2074 required under this section, may not be canceled by the insured
2075 for any reason or by the insurer after 60 days, during which
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2076 period the insurer is completing the underwriting of the policy.
2077 After the insurer has completed underwriting the policy, the
2078 insurer shall notify the Department of Highway Safety and Motor
2079 Vehicles that the policy is in full force and effect and is not
2080 cancelable for the remainder of the policy period. A premium
2081 must shall be collected and the coverage is in effect for the
2082 60-day period during which the insurer is completing the
2083 underwriting of the policyL whether or not the person's driver
2084 license, motor vehicle tag, and motor vehicle registration are
2085 in effect. Once the noncancelable provisions of the policy
2086 become effective, the bodily injury liability and property
2087 damage liability coverages for bodily injury, property damage,
2088 and personal injury protection may not be reduced below the
2089 minimum limits required under s. 324.021 ors. 324.023 during
2090 the policy period.
2091 Section 44. Effective upon this act becoming a law,
2092 section 627.7278, Florida Statutes, is created to read:
2093 627.7278 Applicability and construction; notice to
2094 policyholders.-
2095 (1) As used in this section, the term "minimum security
2096 requirements" means security that enables a person to respond in
2097 damages for liability on account of crashes arising out of the
2098 ownership, maintenance, or use of a motor vehicle, in the
2099 amounts required bys. 324.021(7).
2100 (2) Effective January 1, 2021:
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2101 (a) Motor vehicle insurance policies issued or renewed on
2102 or after that date may not include personal injury protection.
2103 (b) All persons subject to s. 324.022, s. 324.032, s.
2104 627.7415, ors. 627.742 must maintain at least minimum security
2105 requirements.
2106 (c) Any new or renewal motor vehicle insurance policy
2107 delivered or issued for delivery in this state must provide
2108 coverage that complies with minimum security requirements.
2109 (d) An existing motor vehicle insurance policy issued
2110 before January 1, 2021, that provides personal injury protection
2111 and property damage liability coverage which meets the
2112 requirements of s. 324.022 on December 31, 2020, but which does
2113 not meet minimum security requirements on or after January 1,
2114 2021, is deemed to meet the security requirements of s. 324.022
2115 until such policy is renewed, nonrenewed, or canceled on or
2116 after January 1, 2021. Sections 400.9905, 400.991, 456.057,
2117 456.072, 626.9541(1) (i), 627.7263, 627.727, 627.730-627.7405,
2118 627.748, and 817.234, Florida Statutes 2019, remain in full
2119 force and effect for motor vehicle accidents covered under a
2120 policy issued under the Florida Motor Vehicle No-Fault Law
2121 before January 1, 2021, until the policy is renewed, nonrenewed,
2122 or canceled on or after January 1, 2021.
2123 (3) Each insurer shall allow each insured who has a new or
2124 renewal policy providing personal injury protection which
2125 becomes effective before January 1, 2021, and whose policy does
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2126 not meet minimum security requirements on or after January 1,
2127 2021, to change coverages so as to eliminate personal injury
2128 protection and obtain coverage providing minimum security
2129 requirements, which shall be effective on or after January 1,
2130 2021. The insurer is not required to provide coverage complying
2131 with minimum security requirements in such policies if the
2132 insured does not pay the required premium, if any, by January 1,
2133 2021, or such later date as the insurer may allow. The insurer
2134 must also offer each insured medical payments coverage pursuant
2135 to s. 627.7265. Any reduction in the premium must be refunded by
2136 the insurer. The insurer may not impose on the insured an
2137 additional fee or charge that applies solely to a change in
2138 coverage; however, the insurer may charge an additional required
2139 premium that is actuarially indicated.
2140 ( 4) By September 1, 2020, each motor vehicle insurer shall
2141 provide notice of this section to each motor vehicle
2142 policyholder who is subject to this section. The notice is
2143 subject to approval by the office and must clearly inform the
2144 policyholder that:
2145 (a) The Florida Motor Vehicle No-Fault Law is repealed
2146 effective January 1, 2021, and that on or after that date, the
2147 insured is no longer required to maintain personal injury
2148 protection insurance coverage, that personal injury protection
2149 coverage is no longer available for purchase in this state, and
2150 that all new or renewal policies issued on or after that date
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2151 will not contain that coverage.
2152 (b) Effective January 1, 2021, a person subject to the
2153 financial responsibility requirements of s. 324.022 must
2154 maintain minimum security requirements that enable the person to
2155 respond to damages for liability on account of accidents arising
2156 out of the use of a motor vehicle in the following amounts:
2157 1. Twenty-five thousand dollars for bodily injury to, or
2158 the death of, one person in any one crash and, subject to such
2159 limits for one person, in the amount of $50,000 for bodily
2160 injury to, or the death of, two or more persons in any one
2161 crash; and
2162 2. Ten thousand dollars for damage to, or destruction of,
2163 the property of others in any one crash.
2164 (c) Bodily injury liability coverage protects the insured,
2165 up to the coverage limits, against loss if the insured is
2166 legally responsible for the death of or bodily injury to others
2167 in a motor vehicle accident.
2168 (d) Effective January 1, 2021, each policyholder of motor
2169 vehicle liability insurance purchased as proof of financial
2170 responsibility must be offered medical payments coverage
2171 benefits that comply withs. 627.7265. The insurer must offer
2172 medical payments coverage at limits of $5,000 and $10,000
2173 without a deductible. The insurer may also offer medical
2174 payments coverage at other limits greater than $5,000, and may
2175 offer coverage with a deductible of up to $500. Medical payments
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2176 coverage pays covered medical expenses incurred due to bodily
2177 injury, sickness, or disease arising out of the ownership,
2178 maintenance, or use of the motor vehicle, up to the limits of
2179 such coverage, for injuries sustained in a motor vehicle crash
2180 by the named insured, resident relatives, persons operating the
2181 insured motor vehicle, passengers in the insured motor vehicle,
2182 and persons who are struck by the insured motor vehicle and
2183 suffer bodily injury while not an occupant of a self-propelled
2184 motor vehicle as provided ins. 627.7265. Medical payments
2185 coverage also provides a death benefit of at least $5,000.
2186 (e) The policyholder may obtain uninsured and underinsured
2187 motorist coverage, which provides benefits, up to the limits of
2188 such coverage, to a policyholder or other insured entitled to
2189 recover damages for bodily injury, sickness, disease, or death
2190 resulting from a motor vehicle accident with an uninsured or
2191 underinsured owner or operator of a motor vehicle.
2192 (f) If the policyholder's new or renewal motor vehicle
2193 insurance policy is effective before January 1, 2021, and
2194 contains personal injury protection and property damage
2195 liability coverage as required by state law before January 1,
2196 2021, but does not meet minimum security requirements on or
2197 after January 1, 2021, the policy is deemed to meet minimum
2198 security requirements until it is renewed, nonrenewed, or
2199 canceled on or after January 1, 2021.
2200 (g) A policyholder whose new or renewal policy becomes
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2201 effective before January 1, 2021, but does not meet minimum
2202 security requirements on or after January 1, 2021, may change
2203 coverages under the policy so as to eliminate personal injury
2204 protection and to obtain coverage providing minimum security
2205 requirements, including bodily injury liability coverage, which
2206 are effective on or after January 1, 2021.
2207 (h) If the policyholder has any questions, he or she
2208 should contact the person named at the telephone number provided
2209 in the notice.
2210 Section 45. Paragraph (a) of subsection (1) of section
2211 627.728, Florida Statutes, is amended to read:
2212 627.728 Cancellations; nonrenewals.-
2213 (1) As used in this section, the term:
2214 (a) "Policy" means the bodily injury and property damage
2215 liability, personal injury proteetion, medical payments,
2216 comprehensive, collision, and uninsured motorist coverage
2217 portions of a policy of motor vehicle insurance delivered or
2218 issued for delivery in this state:
2219 1. Insuring a natural person as named insured or one or
2220 more related individuals who are residents resident of the same
2221 household; and
2222 2. Insuring only a motor vehicle of the private passenger
2223 type or station wagon type which is not used as a public or
2224 livery conveyance for passengers or rented to others; or
2225 insuring any other four-wheel motor vehicle having a load
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2226 capacity of 1,500 pounds or less which is not used in the
2227 occupation, profession, or business of the insured other than
2228 farming; other than any policy issued under an automobile
2229 insurance assigned risk plan or covering garage, automobile
2230 sales agency, repair shop, service station, or public parking
2231 place operation hazards.
2232
2233 The term "policy" does not include a binder as defined ins.
2234 627.420 unless the duration of the binder period exceeds 60
2235 days.
2236 Section 46. Subsection (1), paragraph (a) of subsection
2237 (5), and subsections (6) and (7) of section 627.7295, Florida
2238 Statutes, are amended to read:
2239 627.7295 Motor vehicle insurance contracts.-
2240 (1) As used in this section, the term:
2241 (a} "Policy" means a motor vehicle insurance policy that
2242 provides bodily injury liability personal injury protection
2243 coverage and7 property damage liability coverage, or both.
2244 (b} "Binder" means a binder that provides motor vehicle
2245 bodily injury liability coverage personal injury protection and
2246 property damage liability coverage.
2247 (5) (a) A licensed general lines agent may charge a per-
2248 policy fee of up to not to exceed $10 to cover the
2249 administrative costs of the agent associated with selling the
2250 motor vehicle insurance policy if the policy covers only bodily
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2251 injury liability coverage personal injury protection coverage as
2252 provided bys. 627.736 and property damage liability coverage as
•
2253 provided bys. 627.7275 and if no other insurance is sold or
2254 issued in conjunction with or collateral to the policy. The fee
2255 is not considered part of the premium.
2256 ( 6) If a motor vehicle owner's driver license, license
2257 plate, and registration have previously been suspended pursuant
2258 to s. 316.646 ors. 627.733, an insurer may cancel a new policy
2259 only as provided ins. 627.7275.
2260 (7) A policy of private passenger motor vehicle insurance
2261 or a binder for such a policy may be initially issued in this
2262 state only if, before the effective date of such binder or
2263 policy, the insurer or agent has collected from the insured an
2264 amount equal to at least 1 month's premium. An insurer, agent,
2265 or premium finance company may not, directly or indirectly, take
2266 any action that results resulting in the insured paying having
2267 ~ from the insured's own funds an amount less than the 1
2268 month's premium required by this subsection. This subsection
2269 applies without regard to whether the premium is financed by a
2270 premium finance company or is paid pursuant to a periodic
2271 payment plan of an insurer or an insurance agent.
2272 M This subsection does not apply_£_
2273 1. If an insured or member of the insured's family is
2274 renewing or replacing a policy or a binder for such policy
2275 written by the same insurer or a member of the same insurer
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2276 group. This subsection docs not apply
2277 2. To an insurer that issues private passenger motor
2278 vehicle coverage primarily to active duty or former military
2279 personnel or their dependents. This subsection docs not apply
2280 3. If all policy payments are paid pursuant to a payroll
2281 deduction plan, an automatic electronic funds transfer payment
2282 plan from the policyholder, or a recurring credit card or debit
2283 card agreement with the insurer.
2284 J.EJ_ This subsection and subsection (4) do not apply if~
2285 1. All policy payments to an insurer are paid pursuant to
2286 an automatic electronic funds transfer payment plan from an
2287 agent, a managing general agent, or a premium finance company
2288 and if the policy includes, at a minimum, bodily injury
2289 liability coverage and personal injury protection pursuant to
2290 ss. 627.730 627.7405; ffiotor vehicle property damage liability
2291 coverage pursuant to s. 627.7275; or and bodily injury liability
2292 in at least the affiount of $10,000 because of bodily injury to,
2293 or death of, one person in any one accident and in the affiount of
2294 $20,000 because of bodily injury to, or death of, two or ffiorc
2295 persons in any one accident. This subsection and subsection (4)
2296 do not apply if
2297 2. An insured has had a policy in effect for at least 6
2298 months, the insured's agent is terminated by the insurer that
2299 issued the policy, and the insured obtains coverage on the
2300 policy's renewal date with a new company through the terminated
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2301 agent.
2302 Section 47. Section 627.7415, Florida Statutes, is amended
2303 to read:
2304 627.7415 Commercial motor vehicles; additional liability
2305 insurance coverage.-Beginning January 1, 2021, commercial motor
2306 vehicles, as defined ins. 207.002 ors. 320.01, operated upon
2307 the roads and highways of this state must shall be insured with
2308 the following minimum levels of combined bodily liability
2309 insurance and property damage liability insurance in addition to
2310 any other insurance requirements:
2311 (1) Sixty Fifty thousand dollars per occurrence for a
2312 commercial motor vehicle with a gross vehicle weight of 26,000
2313 pounds or more, but less than 35,000 pounds.
2314 (2) One hundred twenty thousand dollars per occurrence for
2315 a commercial motor vehicle with a gross vehicle weight of 35,000
2316 pounds or more, but less than 44,000 pounds.
2317 (3) Three hundred thousand dollars per occurrence for a
2318 commercial motor vehicle with a gross vehicle weight of 44,000
2319 pounds or more.
2320 (4) All commercial motor vehicles subject to regulations
2321 of the United States Department of Transportation, 49 C.F.R.
2322 part 387, subpart A, and as may be hereinafter amended, shall be
2323 insured in an amount equivalent to the minimum levels of
2324 financial responsibility as set forth in such regulations.
2325
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2326 A violation of this section is a noncriminal traffic infraction,
2327 punishable as a nonmoving violation as provided in chapter 318.
2328 Section 48. Section 627.747, Florida Statutes, is created
2329 to read:
2330 627.747 Named driver exclusion.-
2331 (1) A private passenger motor vehicle policy may exclude
2332 an identified individual from the following coverages while the
2333 identified individual is operating a motor vehicle, provided
2334 that the identified individual is specifically excluded by name
2335 on the declarations page or by endorsement, and the policyholder
2336 consents in writing to the exclusion:
2337 (a) Property damage liability coverage.
2338 (b) Bodily injury liability coverage.
2339 (c) Uninsured motorist coverage for any damages sustained
2340 by the identified excluded individual, if the policyholder has
2341 purchased such coverage.
2342 (d) Any coverage the policyholder is not required by law
2343 to purchase.
2344 (2) A private passenger motor vehicle policy may not
2345 exclude coverage when:
2346 (a) The identified excluded individual is injured while
2347 not operating a motor vehicle;
2348 (b) The exclusion is unfairly discriminatory under the
2349 Florida Insurance Code, as determined by the office; or
2350 (c) The exclusion is inconsistent with the underwriting
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2351 rules filed by the insurer pursuant to s. 627. 0 651 ( 13) (a) .
2352 Section 49. Paragraphs (b), (c), and (g) of subsection (7)
2353 and paragraphs (a) and (b) of subsection (8) of section 627.748,
2354 Florida Statutes, are amended to read:
2355 627.748 Transportation network companies.-
2356 (7) TRANSPORTATION NETWORK COMPANY AND TNC DRIVER
2357 INSURANCE REQUIREMENTS.-
2358 (b) The following automobile insurance requirements apply
2359 while a participating TNC driver is logged on to the digital
2360 network but is not engaged in a prearranged ride:
2361 1. Automobile insurance that provides:
2362 a. A primary automobile liability coverage of at least
2363 $50,000 for death and bodily injury per person, $100,000 for
2364 death and bodily injury per incident, and $25,000 for property
2365 damage; and
2366 b. Personal injury protection benefits that ffieet the
2367 ffiiniffiuffi coverage affiounts required under ss. 627.730 627.740§;
2368 afi€t
2369 e-. Uninsured and underinsured vehicle coverage as required
2370 bys. 627.727.
2371 2. The coverage requirements of this paragraph may be
2372 satisfied by any of the following:
2373 a. Automobile insurance maintained by the TNC driver;
2374 b. Automobile insurance maintained by the TNC; or
2375 c. A combination of sub-subparagraphs a. and b.
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2376 (c) The following automobile insurance requirements apply
2377 while a TNC driver is engaged in a prearranged ride:
2378 1. Automobile insurance that provides:
2379 a. A primary automobile liability coverage of at least $1
2380 million for death, bodily injury, and property damage; and
2381 b. Personal injury protection benefits that ffieet the
2382 ffiiniffiuffi coverage affiounto required of a liffiouoine under so.
2383 627.730 627.7405; and
2384 e-.- Uninsured and underinsured vehicle coverage as required
2385 bys. 627.727.
2386 2. The coverage requirements of this paragraph may be
2387 satisfied by any of the following:
2388 a. Automobile insurance maintained by the TNC driver;
2389 b. Automobile insurance maintained by the TNC; or
2390 c. A combination of sub-subparagraphs a. and b.
2391 (g) Insurance satisfying the requirements under this
2392 subsection is deemed to satisfy the financial responsibility
2393 requirement for a motor vehicle under chapter 324 and the
2394 security required under o. 627.733 for any period when the TNC
2395 driver is logged onto the digital network or engaged in a
2396 prearranged ride.
2397 (8) TRANSPORTATION NETWORK COMPANY AND INSURER;
2398 DISCLOSURE; EXCLUSIONS.-
2399 (a) Before a TNC driver is allowed to accept a request for
2400 a prearranged ride on the digital network, the TNC must disclose
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2401 in writing to the TNC driver:
2402 1. The insurance coverage, including the types of coverage
2403 and the limits for each coverage, which the TNC provides while
2404 the TNC driver uses a TNC vehicle in connection with the TNC's
2405 digital network.
2406 2. That the TNC driver's own automobile insurance policy
2407 might not provide any coverage while the TNC driver is logged on
2408 to the digital network or is engaged in a prearranged ride,
2409 depending on the terms of the TNC driver's own automobile
2410 insurance policy.
2411 3. That the provision of rides for compensation which are
2412 not prearranged rides subjects the driver to the coverage
2413 requirements imposed under s. 324.032(1) and (2) and that
2414 failure to meet such coverage requirements subjects the TNC
2415 driver to penalties provided ins. 324.221, up to and including
2416 a misdemeanor of the second degree.
2417 (b)l. An insurer that provides an automobile liability
2418 insurance policy under this part may exclude any and all
2419 coverage afforded under the policy issued to an owner or
2420 operator of a TNC vehicle while driving that vehicle for any
2421 loss or injury that occurs while a TNC driver is logged on to a
2422 digital network or while a TNC driver provides a prearranged
2423 ride. Exclusions imposed under this subsection are limited to
2424 coverage while a TNC driver is logged on to a digital network or
2425 while a TNC driver provides a prearranged ride. This right to
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2426 exclude all coverage may apply to any coverage included in an
2427 automobile insurance policy, including, but not limited to:
2428 a. Liability coverage for bodily injury and property
2429 damage;
2430 b. Uninsured and underinsured motorist coverage;
2431 c. Medical payments coverage;
2432 d. Comprehensive physical damage coverage; and
2433 e. Collision physical damage coverage; and
2434 f. Personal injury protection.
2435 2. The exclusions described in subparagraph 1. apply
2436 notwithstanding any requirement under chapter 324. These
2437 exclusions do not affect or diminish coverage otherwise
2438 available for permissive drivers or resident relatives under the
2439 personal automobile insurance policy of the TNC driver or owner
2440 of the TNC vehicle who are not occupying the TNC vehicle at the
2441 time of loss. This section does not require that a personal
2442 automobile insurance policy provide coverage while the TNC
2443 driver is logged on to a digital network, while the TNC driver
2444 is engaged in a prearranged ride, or while the TNC driver
2445 otherwise uses a vehicle to transport riders for compensation.
2446 3. This section must not be construed to require an
2447 insurer to use any particular policy language or reference to
2448 this section in order to exclude any and all coverage for any
2449 loss or injury that occurs while a TNC driver is logged on to a
2450 digital network or while a TNC driver provides a prearranged
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2451 ride.
2452 4. This section does not preclude an insurer from
2453 providing primary or excess coverage for the TNC driver's
2454 vehicle by contract or endorsement.
2455 Section 50. Paragraph (a) of subsection (2) of section
2456 627.749, Florida Statutes, is amended to read:
2457 627.749 Autonomous vehicles; insurance requirements.-
2458 (2) INSURANCE REQUIREMENTS.-
2459 (a) A fully autonomous vehicle with the automated driving
2460 system engaged while logged on to an on-demand autonomous
2461 vehicle network or engaged in a prearranged ride must be covered
2462 by a policy of automobile insurance which provides:
2463 1. Primary liability coverage of at least $1 million for
2464 death, bodily injury, and property damage.
2465 2. Personal injury protection benefits that meet the
2466 minimum coverage amounts required under ss. 627.730 627.7405.
2467 -3-. Uninsured and underinsured vehicle coverage as required
2468 bys. 627.727.
2469 Section 51. Section 627.8405, Florida Statutes, is amended
2470 to read:
2471 627.8405 Prohibited acts; financing companies.-~ Ne
2472 premium finance company shall, in a premium finance agreement or
2473 other agreement, may not finance the cost of or otherwise
2474 provide for the collection or remittance of dues, assessments,
2475 fees, or other periodic payments of money for the cost of:
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2476 ( 1) A membership in an automobile club. The term
2477 "automobile club" means a legal entity that which, in
2478 consideration of dues, assessments, or periodic payments of
2479 money, promises its members or subscribers to assist them in
2480 matters relating to the ownership, operation, use, or
2481 maintenance of a motor vehicle; however, the term '8H:-S-
2482 definition of "automobile club" does not include persons,
2483 associations, or corporations which are organized and operated
2484 solely for the purpose of conducting, sponsoring, or sanctioning
2485 motor vehicle races, exhibitions, or contests upon racetracks,
2486 or upon racecourses established and marked as such for the
2487 duration of such particular events. The term words "motor
2488 vehicle" used herein has fl-a¥€- the same meaning as defined in
2489 chapter 320.
2490 (2) An accidental death and dismemberment policy sold in
2491 combination with a policy providing only bodily injury liability
2492 coverage personal injury protection and property damage
2493 liability coverage only policy.
2494 (3) Any product not regulated under the provisions of this
2495 insurance code.
2496
2497 This section also applies to premium financing by any insurance
2498 agent or insurance company under part XVI. The commission shall
2499 adopt rules to assure disclosure, at the time of sale, of
2500 coverages financed with personal injury protection and shall
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2501 prescribe the form of such disclosure.
2502 Section 52. Subsection (1) of section 627.915, Florida
2503 Statutes, is amended to read:
2504 627.915 Insurer experience reporting.-
2505 (1) Each insurer transacting private passenger automobile
2506 insurance in this state shall report certain information
2507 annually to the office. The information will be due on or before
2508 July 1 of each year. The information must shall be divided into
2509 the following categories: bodily injury liability; property
2510 damage liability; uninsured motorist; personal injury protection
2511 benefits, medical payments; and comprehensive and collision. The
2512 information given must shall be on direct insurance writings in
2513 the state alone and shall represent total limits data. The
2514 information set forth in paragraphs (a)-(f) is applicable to
2515 voluntary private passenger and Joint Underwriting Association
2516 private passenger writings and must shall be reported for each
2517 of the latest 3 calendar-accident years, with an evaluation date
2518 of March 31 of the current year. The information set forth in
2519 paragraphs (g)-(j) is applicable to voluntary private passenger
2520 writings and must shall be reported on a calendar-accident year
2521 basis ultimately seven times at seven different stages of
2522 development.
2523 (a) Premiums earned for the latest 3 calendar-accident
2524 years.
2525 (b) Loss development factors and the historic development
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2526 of those factors.
2527 (c} Policyholder dividends incurred.
2528 (d} Expenses for other acquisition and general expense.
2529 (e} Expenses for agents' commissions and taxes, licenses,
2530 and fees.
2531 (f} Profit and contingency factors as utilized in the
2532 insurer's automobile rate filings for the applicable years.
2533 (g} Losses paid.
2534 (h} Losses unpaid.
2535 (i} Loss adjustment expenses paid.
2536 (j) Loss adjustment expenses unpaid.
2537 Section 53. Subsections (2) and (3) of section 628.909,
2538 Florida Statutes, are amended to read:
2539 628.909 Applicability of other laws.-
2540 (2) The following provisions of the Florida Insurance Code
2541 apply to captive insurance companies that Wfte are not industrial
2542 insured captive insurance companies to the extent that such
2543 provisions are not inconsistent with this part:
2544 (a} Chapter 624, except for ss. 624.407, 624.408,
2545 624.4085, 624.40851, 624.4095, 624.411, 624.425, and 624.426.
2546 (b} Chapter 625, part II.
2547 (c} Chapter 626, part IX.
2548 (d} Sections 627.730 627.7405, when no fault coverage is
2549 provided.
2550 -+et Chapter 628.
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2551 (3) The following provisions of the Florida Insurance Code
2552 shall apply to industrial insured captive insurance companies to
2553 the extent that such provisions are not inconsistent with this
2554 part:
2555 (a) Chapter 624, except for ss. 624.407, 624.408,
2556 624. 4085, 624. 40851, 624. 4095, 624. 411, 624. 425, 624. 426, and
2557 624.609(1).
2558 (b) Chapter 625, part II, if the industrial insured
2559 captive insurance company is incorporated in this state.
2560 (c) Chapter 626, part IX.
2561 (d) Sections 627.730 627.740§ when no fault coverage is
2562 provided.
2563 -te+ Chapter 628, except for ss. 628.341, 628.351, and
2564 628.6018.
2565 Section 54. Subsections (2), (6), and (7) of section
2566 705.184, Florida Statutes, are amended to read:
2567 705.184 Derelict or abandoned motor vehicles on the
2568 premises of public-use airports.-
2569 (2) The airport director or the director's designee shall
2570 contact the Department of Highway Safety and Motor Vehicles to
2571 notify that department that the airport has possession of the
2572 abandoned or derelict motor vehicle and to determine the name
2573 and address of the owner of the motor vehicle, the insurance
2574 company insuring the motor vehicle, notwithstanding the
2575 provisions of s. 627.736, and any person who has filed a lien on
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2576 the motor vehicle. Within 7 business days after receipt of the
2577 information, the director or the director's designee shall send
2578 notice by certified mail, return receipt requested, to the owner
2579 of the motor vehicle, the insurance company insuring the motor
2580 vehicle, notwithstanding the provisions of s. 627.736, and all
2581 persons of record claiming a lien against the motor vehicle. The
2582 notice must shall state the fact of possession of the motor
2583 vehicle, that charges for reasonable towing, storage, and
2584 parking fees, if any, have accrued and the amount thereof, that
2585 a lien as provided in subsection (6) will be claimed, that the
2586 lien is subject to enforcement pursuant to law, that the owner
2587 or lienholder, if any, has the right to a hearing as set forth
2588 in subsection (4), and that any motor vehicle which, at the end
2589 of 30 calendar days after receipt of the notice, has not been
2590 removed from the airport upon payment in full of all accrued
2591 charges for reasonable towing, storage, and parking fees, if
2592 any, may be disposed of as provided in s. 705.182 (2) (a), (b),
2593 (d), or (e), including, but not limited to, the motor vehicle
2594 being sold free of all prior liens after 35 calendar days after
2595 the time the motor vehicle is stored if any prior liens on the
2596 motor vehicle are more than 5 years of age or after 50 calendar
2597 days after the time the motor vehicle is stored if any prior
2598 liens on the motor vehicle are 5 years of age or less.
2599 (6) The airport pursuant to this section or, if used, a
2600 licensed independent wrecker company pursuant to s. 713.78 shall
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2601 have a lien on an abandoned or derelict motor vehicle for all
2602 reasonable towing, storage, and accrued parking fees, if any,
2603 except that no storage fee may shall be charged if the motor
2604 vehicle is stored less than 6 hours. As a prerequisite to
2605 perfecting a lien under this section, the airport director or
2606 the director's designee must serve a notice in accordance with
2607 subsection (2) on the owner of the motor vehicle, the insurance
2608 company insuring the motor vehicle, notwithstanding the
2609 provisions of s. 627.736, and all persons of record claiming a
2610 lien against the motor vehicle. If attempts to notify the owner,
2611 the insurance company insuring the motor vehicle,
2612 notwithstanding the provisions of s. 627.736, or lienholders are
2613 not successful, the requirement of notice by mail shall be
2614 considered met. Serving of the notice does not dispense with
2615 recording the claim of lien.
2616 ( 7) (a) For the purpose of perfecting its lien under this
2617 section, the airport shall record a claim of lien which states
2618 shall state:
2619 1. The name and address of the airport.
2620 2. The name of the owner of the motor vehicle, the
2621 insurance company insuring the motor vehicle, notwithstanding
2622 the provisions of s. 627.736, and all persons of record claiming
2623 a lien against the motor vehicle.
2624 3. The costs incurred from reasonable towing, storage, and
2625 parking fees, if any.
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2 626 4. A description of the motor vehicle sufficient for
2627 identification.
2628 (b) The claim of lien must shall be signed and sworn to or
2629 affirmed by the airport director or the director's designee.
2630 (c) The claim of lien is shall be sufficient if it is in
2631 substantially the following form:
2632
2633 CLAIM OF LIEN
2634 State of ....... .
2635 County of ....... .
2636 Before me, the undersigned notary public, personally appeared
2637 . . . . . . . . , who was duly sworn and says that he/she is the
2638 . . . . . . . . of . . . . . . . . . . . . , whose address is . . . . . . . . ; and that the
2639 following described motor vehicle:
2640 ... (Description of motor vehicle) ...
2641 owned by ........ , whose address is . . . . . . . . , has accrued
2642 $ •••••••• in fees for a reasonable tow, for storage, and for
2643 parking, if applicable; that the lienor served its notice to the
2644 owner, the insurance company insuring the motor vehicle
2645 notwithstanding the provisions of s. 627.736, Florida Statutes,
2646 and all persons of record claiming a lien against the motor
2647 vehicle on .... , (year) ... , by . . . . . . . . .
2648 ... (Signature) .. .
2649 Sworn to (or affirmed) and subscribed before me this .... day of
2650 .... , (year) ... , by (name of person making statement) ....
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2651 ... (Signature of Notary Public) ...... (Print, Type, or Stamp
2652 Commissioned name of Notary Public) .. .
2653 Personally Known .... OR Produced .... as identification.
2654
2655 However, the negligent inclusion or omission of any information
2656 in this claim of lien which does not prejudice the owner does
2657 not constitute a default that operates to defeat an otherwise
2658 valid lien.
2659 (d) The claim of lien must shall be served on the owner of
2660 the motor vehicle, the insurance company insuring the motor
2661 vehicle, notwithstanding the provisions of s. 627.736, and all
2662 persons of record claiming a lien against the motor vehicle. If
2663 attempts to notify the owner, the insurance company insuring the
2664 motor vehicle notwithstanding the provisions of s. 627.736, or
2665 lienholders are not successful, the requirement of notice by
2666 mail shall be considered met. The claim of lien must shall be so
2667 served before recordation.
2668 (e) The claim of lien must shall be recorded with the
2669 clerk of court in the county where the airport is located. The
2670 recording of the claim of lien shall be constructive notice to
2671 all persons of the contents and effect of such claim. The lien
2672 attaches shall attach at the time of recordation and takes shall
2 67 3 ~ priority as of that time.
2674 Section 55. Subsection (4) of section 713.78, Florida
2675 Statutes, is amended to read:
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2676 713.78 Liens for recovering, towing, or storing vehicles
2677 and vessels.-
2678 (4) (a) A person regularly engaged in the business of
267 9 recovering, towing, or storing vehicles or vessels who comes
2680 into possession of a vehicle or vessel pursuant to subsection
2681 (2), and who claims a lien for recovery, towing, or storage
2682 services, shall give notice, by certified mail, to the
2683 registered owner, the insurance company insuring the vehicle
2684 notwithstanding s. 627.736, and all persons claiming a lien
2685 thereon, as disclosed by the records in the Department of
2686 Highway Safety and Motor Vehicles or as disclosed by the records
2687 of any corresponding agency in any other state in which the
2688 vehicle is identified through a records check of the National
2689 Motor Vehicle Title Information System or an equivalent
2690 commercially available system as being titled or registered.
2691 (b) Whenever a law enforcement agency authorizes the
2692 removal of a vehicle or vessel or whenever a towing service,
2693 garage, repair shop, or automotive service, storage, or parking
2694 place notifies the law enforcement agency of possession of a
2695 vehicle or vessel pursuant to s. 715. 07 ( 2) (a) 2., the law
2696 enforcement agency of the jurisdiction where the vehicle or
2697 vessel is stored shall contact the Department of Highway Safety
2698 and Motor Vehicles, or the appropriate agency of the state of
2699 registration, if known, within 24 hours through the medium of
2700 electronic communications, giving the full description of the
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2701 vehicle or vessel. Upon receipt of the full description of the
2702 vehicle or vessel, the department shall search its files to
2703 determine the owner's name, the insurance company insuring the
2704 vehicle or vessel, and whether any person has filed a lien upon
2705 the vehicle or vessel as provided ins. 319.27(2) and (3) and
2706 notify the applicable law enforcement agency within 72 hours.
2707 The person in charge of the towing service, garage, repair shop,
2708 or automotive service, storage, or parking place shall obtain
2709 such information from the applicable law enforcement agency
2710 within 5 days after the date of storage and shall give notice
2711 pursuant to paragraph (a). The department may release the
2712 insurance company information to the requestor notwithstanding
2713 s. 627.736.
2714 (c) The notice of lien must be sent by certified mail to
2715 the registered owner, the insurance company insuring the vehicle
2716 notwithstanding o. 627.736, and all other persons claiming a
2717 lien thereon within 7 business days, excluding Saturday and
2718 Sunday, after the date of storage of the vehicle or vessel.
2719 However, in no event shall the notice of lien be sent less than
2720 30 days before the sale of the vehicle or vessel. The notice
2721 must state:
2722 1. If the claim of lien is for a vehicle, the last 8
2723 digits of the vehicle identification number of the vehicle
2724 subject to the lien, or, if the claim of lien is for a vessel,
2725 the hull identification number of the vessel subject to the
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2726 lien, clearly printed in the delivery address box and on the
2727 outside of the envelope sent to the registered owner and all
2728 other persons claiming an interest therein or lien thereon.
2729 2. The name, physical address, and telephone number of the
2730 lienor, and the entity name, as registered with the Division of
2731 Corporations, of the business where the towing and storage
2732 occurred, which must also appear on the outside of the envelope
2733 sent to the registered owner and all other persons claiming an
2734 interest in or lien on the vehicle or vessel.
2735 3. The fact of possession of the vehicle or vessel.
2736 4. The name of the person or entity that authorized the
2737 lienor to take possession of the vehicle or vessel.
2738 5. That a lien as provided in subsection (2) is claimed.
2739 6. That charges have accrued and include an itemized
2740 statement of the amount thereof.
2741 7. That the lien is subject to enforcement under law and
2742 that the owner or lienholder, if any, has the right to a hearing
2743 as set forth in subsection (5).
2744 8. That any vehicle or vessel that remains unclaimed, or
2745 for which the charges for recovery, towing, or storage services
2746 remain unpaid, may be sold free of all prior liens 35 days after
2747 the vehicle or vessel is stored by the lienor if the vehicle or
2748 vessel is more than 3 years of age or 50 days after the vehicle
2749 or vessel is stored by the lienor if the vehicle or vessel is 3
2750 years of age or less.
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2751 9. The address at which the vehicle or vessel is
2752 physically located.
2753 (d) The notice of lien may not be sent to the registered
2754 owner, the insurance company insuring the vehicle or vessel, and
2755 all other persons claiming a lien thereon less than 30 days
2756 before the sale of the vehicle or vessel.
2757 (e) If attempts to locate the name and address of the
2758 owner or lienholder prove unsuccessful, the towing-storage
2759 operator shall, after 7 business days, excluding Saturday and
2760 Sunday, after the initial tow or storage, notify the public
2761 agency of jurisdiction where the vehicle or vessel is stored in
2762 writing by certified mail or acknowledged hand delivery that the
2763 towing-storage company has been unable to locate the name and
2764 address of the owner or lienholder and a physical search of the
2765 vehicle or vessel has disclosed no ownership information and a
2766 good faith effort has been made, including records checks of the
2767 Department of Highway Safety and Motor Vehicles database and the
2768 National Motor Vehicle Title Information System or an equivalent
2769 commercially available system. For purposes of this paragraph
2770 and subsection (9), the term "good faith effort" means that the
2771 following checks have been performed by the company to establish
2772 the prior state of registration and for title:
2773 1. A check of the department's database for the owner and
2774 any lienholder.
2775 2. A check of the electronic National Motor Vehicle Title
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2776 Information System or an equivalent commercially available
2777 system to determine the state of registration when there is not
2778 a current registration record for the vehicle or vessel on file
2779 with the department.
2780 3. A check of the vehicle or vessel for any type of tag,
2781 tag record, temporary tag, or regular tag.
2782 4. A check of the law enforcement report for a tag number
2783 or other information identifying the vehicle or vessel, if the
2784 vehicle or vessel was towed at the request of a law enforcement
2785 officer.
2786 5. A check of the trip sheet or tow ticket of the tow
2787 truck operator to determine whether a tag was on the vehicle or
2788 vessel at the beginning of the tow, if a private tow.
2789 6. If there is no address of the owner on the impound
2790 report, a check of the law enforcement report to determine
2791 whether an out-of-state address is indicated from driver license
2792 information.
2793 7. A check of the vehicle or vessel for an inspection
2794 sticker or other stickers and decals that may indicate a state
2795 of possible registration.
2796 8. A check of the interior of the vehicle or vessel for
2797 any papers that may be in the glove box, trunk, or other areas
2798 for a state of registration.
2799 9. A check of the vehicle for a vehicle identification
2800 number.
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2801 10. A check of the vessel for a vessel registration
2802 number.
2803 11. A check of the vessel hull for a hull identification
2804 number which should be carved, burned, stamped, embossed, or
2805 otherwise permanently affixed to the outboard side of the
2806 transom or, if there is no transom, to the outmost seaboard side
2807 at the end of the hull that bears the rudder or other steering
2808 mechanism.
2809 Section 56. Paragraph (a) of subsection (1), paragraph (c)
2810 of subsection ( 7) , paragraphs (a) , (b) , and ( c) of subsection
2811 (8), and subsections (9) and (10) of section 817.234, Florida
2812 Statutes, are amended to read:
2813 817.234 False and fraudulent insurance claims.-
2814 (1) (a) A person commits insurance fraud punishable as
2815 provided in subsection (11) if that person, with the intent to
2816 injure, defraud, or deceive any insurer:
2817 1. Presents or causes to be presented any written or oral
2818 statement as part of, or in support of, a claim for payment or
2819 other benefit pursuant to an insurance policy or a health
2820 maintenance organization subscriber or provider contract,
2821 knowing that such statement contains ttftY false, incomplete, or
2822 misleading information concerning any fact or thing material to
2823 such claim;
2824 2. Prepares or makes any written or oral statement that is
2825 intended to be presented to an ttftY insurer in connection with,
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2826 or in support of, any claim for payment or other benefit
2827 pursuant to an insurance policy or a health maintenance
2828 organization subscriber or provider contract, knowing that such
2829 statement contains aftY false, incomplete, or misleading
2830 information concerning any fact or thing material to such claim;
2831 3.a. Knowingly presents, causes to be presented, or
2832 prepares or makes with knowledge or belief that it will be
2833 presented to an aftY insurer, purported insurer, servicing
2834 corporation, insurance broker, or insurance agent, or any
2835 employee or agent thereof, aftY false, incomplete, or misleading
2836 information or~ written or oral statement as part of, or in
2837 support of, an application for the issuance of, or the rating
2838 of, any insurance policy, or a health maintenance organization
2839 subscriber or provider contract; or
2840 b. Knowingly conceals information concerning any fact
2841 material to such application; or
2842 4. Knowingly presents, causes to be presented, or prepares
2843 or makes with knowledge or belief that it will be presented to
2844 any insurer a claim for payment or other benefit under medical
2845 payments coverage in a motor vehicle a personal injury
2846 protection insurance policy if the person knows that the payee
2847 knowingly submitted a false, misleading, or fraudulent
2848 application or other document when applying for licensure as a
2849 health care clinic, seeking an exemption from licensure as a
2850 health care clinic, or demonstrating compliance with part X of
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2851 chapter 400.
2852 (7)
2853 (c) An insurer, or any person acting at the direction of
2854 or on behalf of an insurer, may not change an opinion in a
2855 mental or physical report prepared under s. 627.736(7) or direct
2856 the physician preparing the report to change such opinion;
2857 however, this provision does not preclude the insurer from
2858 calling to the attention of the physician errors of fact in the
2859 report based upon information in the claim file. Any person who
2860 violates this paragraph coffiffiits a felony of the third degree,
2861 punishable as provided ins. 775.082, s. 775.083, ors. 775.084.
2862 (8) (a) It is unlawful for any person intending to defraud
2863 any other person to solicit or cause to be solicited any
2864 business from a person involved in a motor vehicle accident for
2865 the purpose of making, adjusting, or settling motor vehicle tort
2866 claims or claims for benefits under medical payments coverage in
2867 a motor vehicle insurance policy personal injury protection
2868 benefits required bys. 627.736. Any person who violates -t-fi.e.
2869 provisions of this paragraph commits a felony of the second
2870 degree, punishable as provided ins. 775.082, s. 775.083, ors.
2871 775.084. A person who is convicted of a violation of this
2872 subsection shall be sentenced to a minimum term of imprisonment
2873 of 2 years.
2874 (b) A person may not solicit or cause to be solicited any
2875 business from a person involved in a motor vehicle accident by
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2876 any means of communication other than advertising directed to
2877 the public for the purpose of making motor vehicle tort claims
2878 or claims for benefits under medical payments coverage in a
2879 motor vehicle insurance policy personal injury protection
2880 benefits required bys. 627.736, within 60 days after the
2881 occurrence of the motor vehicle accident. Any person who
2882 violates this paragraph commits a felony of the third degree,
2883 punishable as provided ins. 775.082, s. 775.083, ors. 775.084.
2884 (c) A lawyer, health care practitioner as defined ins.
2885 456.001, or owner or medical director of a clinic required to be
2886 licensed pursuant to s. 400.9905 may not, at any time after 60
2887 days have elapsed from the occurrence of a motor vehicle
2888 accident, solicit or cause to be solicited any business from a
2889 person involved in a motor vehicle accident by means of in
2890 person or telephone contact at the person's residence, for the
2891 purpose of making motor vehicle tort claims or claims for
2892 benefits under medical payments coverage in a motor vehicle
2893 insurance policy personal injury protection benefits required by
2894 s. 627.736. Any person who violates this paragraph commits a
2895 felony of the third degree, punishable as provided ins.
2896 775.082, s. 775.083, ors. 775.084.
2897 (9) A person may not organize, plan, or knowingly
2898 participate in an intentional motor vehicle crash or a scheme to
2899 create documentation of a motor vehicle crash that did not occur
2900 for the purpose of making motor vehicle tort claims or claims
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2901 for benefits under medical payments coverage in a motor vehicle
2902 insurance policy personal injury protection benefits as required
2903 bys. 627.736. Any person who violates this subsection commits a
2904 felony of the second degree, punishable as provided ins.
2905 775.082, s. 775.083, ors. 775.084. A person who is convicted of
2906 a violation of this subsection shall be sentenced to a minimum
2907 term of imprisonment of 2 years.
2908 (10) A licensed health care practitioner who is found
2909 guilty of insurance fraud under this section for an act relating
2910 to a motor vehicle personal injury protection insurance policy
2911 loses his or her license to practice for 5 years and may not
2912 receive reimbursement under medical payments coverage in a motor
2913 vehicle insurance policy for personal injury protection benefits
2914 for 10 years.
2915 Section 57. For the 2020-2021 fiscal year, the sum of
2916 $83,651 in nonrecurring funds is appropriated from the Insurance
2917 Regulatory Trust Fund to the Office of Insurance Regulation for
2918 the purpose of implementing this act.
2919 Section 58. Except as otherwise expressly provided in this
2920 act and except for this section, which shall take effect upon
2921 this act becoming a law, this act shall take effect January 1,
2922 2021.
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COMMERCE COMMITTEE
HB 771 by Rep. Grall
Motor Vehicle Insurance
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Sabatini (line 1506): The amendment establishes criteria for
determining an insurer's liability for third-party bad faith for actions brought under s. 624.155,
F.S., or the common law, as follows:
• The insured or claimant has the burden of proof;
• Negligence is not enough to establish the insurer's liability;
• The insured or claimant must prove the insurer:
o Acted in reckless disregard; and
o Such action caused damages to any insured;
• The conduct (or lack thereof) of the insured or claimant is made relevant to the
determining the insurer's liability;
• An affirmative defense is created that may bar a judgment against the insurer for third-
party bad faith:
o If the insured's or claimant's own conduct, in whole or in part, caused an excess
judgment;
• The insurer must be held not liable by the jury or judge, in a bench trial, if the insurer is
found to have fulfilled certain specified obligations.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 771 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Sabatini offered the following:
3
4 Amendment (with title amendment)
5 Between lines 1506 and 1507, insert:
6 Section 33. Section 624.155, Florida Statutes is amended
7 to read:
8 624.155 Civil remedy.-
9 (10) Notwithstanding subsections (1)-(9), in an action for
10 third party bad faith under this chapter or at common law:
11 (a) An insured or claimant has the burden to prove that
12 the insurer acted in bad faith. Negligent conduct of the insurer
13 is not enough to establish bad faith, an insured or claimant
14 must prove that the insurer acted in reckless disregard for the
15 rights of any insured and that such reckless disregard caused
16 damage to the insured or claimant.
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Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 771 (2020)
Amendment No. 1
17 (b) The actions or inactions of the insured or claimant are
18 relevant in an action for bad faith. It is an affirmative
19 defense to a claim for bad faith that the insured's or
20 claimant's own conduct, in whole or in part, caused an excess
21 judgment.
22 (c) An insurer must advise the insured of settlement
23 opportunities, advise the insured as to the probable outcome of
24 the litigation, warn the insured of the possibility of an excess
25 judgment, advise the insured of steps to avoid an excess
26 judgment, and defend its insured against a legal action when the
27 complaint alleges facts that fairly and potentially bring the
28 suit within policy coverage. If the insurer fulfills these
29 obligations, and if the trier of fact finds that the insurer
30 stood ready and willing to settle for policy limits, then the
31 insurer is not liable.
32
33
34 T I T L E A ME N D ME N T
35 Remove line 1 and insert:
36 An act relating to insurance; repealing
37 Remove line 89 and insert:
38 professions; amending s. 624.155, F.S.; establishing the burden
39 of proof in a common law or statutory claim for third party bad
40 faith; providing that negligent conduct alone is not proof of
41 bad faith by an insurer; creating affirmative defenses to an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 771 (2020)
Amendment No. 1
42 action for third party bad faith; establishing duties of an
43 insurer relevant to a third party action; providing that an
44 insurer who fulfills such duties has no liability for third
45 party bad faith; amending s. 626.9541, F.S.; conforming a
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: CS/CS/HB 1339 Housing
SPONSOR(S): Ways & Means Committee, Local, Federal & Veterans Affairs Subcommittee, Yarborough
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local, Federal & Veterans Affairs Subcommittee 12 Y, 0 N, As CS Renner Miller
2) Ways & Means Committee 17 Y, 0 N, As CS Berg Langston
3) Commerce Committee Brackett Hamon
SUMMARY ANALYSIS
The bill addresses several housing issues related to development zoning and impact fees, the provision of affordable
housing, and the regulation, ownership, and tenancy related to mobile homes and mobile home parks. Specifically, the
bill:
• Authorizes local governments to approve the development of affordable housing on any parcel zoned for
residential, commercial, or industrial use.
• Requires local governments to adopt an ordinance to allow accessory dwelling units in any area zoned for single-
family residential use, except in an area of critical state concern.
• Requires the reporting of impact fee data within the annual financial audit report submitted to the Department of
Financial Services.
• Requires the evaluation of additional local government contribution criteria within applications submitted for the
State Apartment Incentive Loan Program funding.
• Transitions the "pilot" features of a workforce housing program into the Community Workforce Housing Loan
Program, administered by the Florida Housing Finance Corporation (Florida Housing).
• Establishes biannual regional workshops for local elected officials serving on affordable housing advisory
committees to identify and share best affordable housing practices.
• Adds data reporting within a State Housing Initiatives Partnership Program participant's submissions to Florida
Housing about affordable housing applications approved and denied.
• Permits Florida Housing to withhold specified distributions from the Local Government Housing Trust Fund to fund
the construction of transitional housing for persons aging out of foster care.
• Clarifies provisions exempting mobile home park owners from the jurisdiction of the Public Service Commission
when the park owners provide water and wastewater.
• Requires a mobile home park owner to amend the prospectus when expanding the park to include new lots and
an expansion of more than 15 percent requires increasing facilities or amenities within a reasonable timeframe.
• Provides that a mobile home owner may be required to install improvements as disclosed in the prospectus.
• Permits a park owner to issue a 90-day lot rental increase notice to multiple tenants, within a single notice,
regardless of the rental agreement anniversary date.
• Permits a mobile home park damaged or destroyed by natural forces to be rebuilt on the same site with the same
density as was approved, permitted, or built before being damaged or destroyed.
• Allows a purchaser to assume the seller's prospectus but does not prohibit a park owner from offering the
purchaser any approved prospectus.
• Revises mobile home homeowner association notifications, bylaws, and powers.
• Requires certain disputes between a mobile homeowner association and a member be submitted to the Division
of Condominiums, Timeshares, and Mobile Homes for binding arbitration conducted pursuant to the statute and
the division's adopted procedural rules.
The bill has fiscal impacts on state and local governments. See Fiscal Comments Section.
The bill provides for an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Zoning and Impact Fees for Affordable Housing (Sections 1, 3 and 4)
Present Situation
Local Government Authority
The Florida Constitution grants local governments broad home rule authority. Specifically, non-charter
county governments may exercise those powers of self-government that are provided by general or
special law. 1 Those counties operating under a county charter have all powers of self-government not
inconsistent with general law or special law approved by the vote of the electors. 2 Likewise,
municipalities have those governmental, corporate, and proprietary powers that enable them to conduct
municipal government, perform their functions and provide services, and exercise any power for
municipal purposes, except as otherwise provided by law. 3
Comprehensive Plans and Land Use Regulation
Local governments regulate aspects of land development by enacting ordinances that address local
zoning, rezoning, subdivision, building construction, landscaping, tree protection, 4 sign regulations or
any other regulations controlling the development of land. 5 "Land development regulation" is defined to
include a general zoning code, but does not include a zoning map, an action that results in zoning or
rezoning of land, or any building construction standard adopted pursuant to and in compliance with the
provisions of ch. 553, F.S., on Building Construction Standards. 6
Section 163.3177, F.S., governs a locality's comprehensive plan which lays out the locations for future
public facilities, including roads, water and sewer facilities, neighborhoods, parks, schools, and
commercial and industrial developments.
Development that does not conform to the comprehensive plan may not be approved by a local
government unless the local government first amends its comprehensive plan. Among the many
components of a comprehensive plan is a land use element designating proposed future general
distribution, location, and extent of the uses of land. 7 Specified use designations include those for
residential, commercial, industry, agriculture, recreation, conservation, education, and public facilities. 8
State law requires a proposed comprehensive plan amendment to receive public hearings, with the first
hearing held by the local planning board. 9 The local government must then hold an initial public hearing
regarding the proposed amendment and subsequently transmit it to several statutorily identified
1 Art. VIII, s.1(f), Fla. Const.
2 Art. VIII, s.1(g), Fla. Const.
3 Art. VIII, s.2(b), Fla. Const. See also s.166.021(1), F.S.
4
S. 163.045, F.S., prohibits a local government from requiring a notice, application, approval, permit, fee, or mitigation for
the pruning, trimming, or removal of a tree on residential property if the tree presents a danger to persons or property, as
documented by a certified arborist or licensed landscape architect.
5 See ss. 163.3164 and 163.3213, F.S. Pursuant to s. 163.3213, F.S., substantially affected persons have the right to
maintain administrative actions which assure that land development regulations implement and are consistent with the
local comprehensive plan.
6 S.163.3213(1)(b), F.S.
7 S. 163.3177(6)(a), F.S.
6
Id. Section 163. 3164( 4 ), F. S., specifies the designation of an "agricultural enclave." Among other features, to be
considered an agricultural enclave, a parcel must be owned by a single person, used for bona fide agricultural purposes,
and must be surrounded by 75 percent by property that has existing or industrial, commercial, or residential development
or property designated by the local government for such purposes.
9 Ss. 163.3174(4)(a) and 163.3184, F.S.
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reviewing agencies, including the Department of Economic Opportunity (DEO), the relevant Regional
Planning Council, and adjacent local governments that request to participate in the review process. 10
In 2011, the Legislature bifurcated the process for approving comprehensive plan amendments. 11 Most
plan amendments are placed into the Expedited State Review Process, while plan amendments
relating to large-scale developments are placed into the State Coordinated Review Process. 12 The two
processes operate in much the same way; however, the State Coordinated Review Process provides a
longer review period and requires all agency comments to be coordinated by DEO, rather than
communicated directly to the permitting local government by each individual reviewing agency. 13
Sections 125.66(4), and 166.041(3), F.S., outline regular and emergency ordinance adoption
procedures for counties and municipalities. Ordinances or resolutions that change the actual list of
permitted, conditional, or prohibited uses within a zoning category, or ordinances or resolutions initiated
by the local government that change the actual zoning map designation of a parcel or parcels of land,
must follow additional enhanced procedures and requirements.
Affordable Housing
Affordable housing is generally defined in relation to the annual area median household income
adjusted for family size. Section 420.0004, F.S., defines the term "affordable" for housing purposes to
mean that monthly rents or monthly mortgage payments including taxes, insurance, and utilities do not
exceed 30 percent of the median adjusted gross annual income for qualifying households. 14 Eligible
households are determined as follows:
• Extremely-low-income households, i.e., total annual household income does not exceed 30
percent of the median annual adjusted gross income for households within the state; 15
• Very-low-income households, i.e., total annual gross household income does not exceed 50
percent of the median annual income within the state or the metropolitan statistical area,
whichever is greater; 16
• Low-income households, i.e., total annual gross household income does not exceed 80 percent
of the median annual income within the state or the area, whichever is greater; 17
• Moderate-income households, i.e., total annual gross household income does not exceed 120
percent of the median annual income within the state or the area, whichever is greater. 18
Statutory Guidance on County and Municipal Affordable Housing
Sections 125.01055 and 166.04151, F.S., authorize a county or municipality, notwithstanding any other
provision of law, to adopt and maintain in effect any law, ordinance, rule, or other measure that is
adopted for the purpose of increasing the supply of affordable housing using land use mechanisms
such as inclusionary housing ordinances.
lnclusionary housing ordinances (sometimes called inclusionary zoning ordinances) are land use
regulations that require affordable housing units to be provided in conjunction with the development of
market rate units. The intent of these ordinances is to increase the production of affordable housing in
10 S. 163.3184, F.S.
11 Chapter 2011-139, s. 17, Laws of Fla.
12 Jd.
13 S. 163.3184(3) and (4), F.S.
14 Current limitations are found in the 2019 Income Limits and Rent Limits document producted by the Florida Housing
Finance Corporation, available athttps://www.floridahousing.org/owners-and-managers/compliance/income-limits (last
visited February 14, 2020)
15 S. 420.0004(9), F.S. Florida Housing Finance Corporation may adjust this amount annually by rule to provide that in
lower income counties, extremely low income may exceed 30 percent of area median income and that in higher income
counties, extremely low income may be less than 30 percent of area median income.
16 S. 420.0004(17), F.S.
17 S. 420.0004(11 ), F.S.
1a S. 420.0004(12), F.S.
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general and to increase the production in specific geographic areas that might otherwise not include
affordable housing. 19
Chapter 2019-165, Laws of Fla., (2019 Act) amended ss. 125.01055 and 166.04151, F.S., to provide
that a local inclusionary housing ordinance requiring a developer to provide a specified number of
affordable housing units or requiring a developer to contribute to a housing fund must provide
incentives to fully offset all costs to the developer of its affordable housing contribution. The developer
offset provision does not apply in areas of critical state concern in Monroe County and the City of Key
West.
Local Government Impact Fees2°
Pursuant to home rule authority, counties and municipalities may impose proprietary fees, 21 regulatory
fees, and special assessments22 to pay the cost of providing a facility or service or regulating an
activity. As one type of regulatory fee, impact fees are charges imposed by local governments against
new development to provide for capital facilities' costs made necessary by such growth. 23 Impact fee
calculations vary from jurisdiction to jurisdiction and upon the type of fee. Impact fees also vary
extensively depending on local costs, capacity needs, resources, and the local government's
determination to charge the full cost or only part of the cost of the infrastructure improvement through
utilization of the impact fee.
Section 163.31801 (3), F.S., provides requirements and procedures for the adoption of an impact fee.
An impact fee adopted by ordinance of a county or municipality or by resolution of a special district
must, at minimum:
• Require that the calculation of the impact fee be based on the most recent and localized data;
• Provide for accounting and reporting of impact fee collections and expenditures. If a local
government imposes an impact fee to address its infrastructure needs, the entity must account
for the revenues and expenditures of such impact fee in a separate accounting fund;
• Limit administrative charges for the collection of impact fees to actual costs; and
• Require that notice be provided at least 90 days before the effective date of an ordinance or
resolution imposing a new or increased impact fee.
The 2019 Act amended s. 163.31801, F.S., to codify the 'dual rational nexus test' for impact fees, as
articulated in case law. This test requires an impact fee to be proportional and have a reasonable
connection, or rational nexus, between 1) the proposed new development and the need and the impact
of additional capital facilities, and 2) the expenditure of funds and the benefits accruing to the proposed
new development. 24 Local governments are prohibited from requiring the payment of impact fees prior
to issuing a building permit for the subject property. 25
Additionally, the 2019 Act established that impact fee funds must be earmarked for capital facilities that
benefit new residents and may not be used to pay existing debt unless specific conditions are met. 26
Provisions also authorized a local government to provide an exception or waiver for an impact fee for
affordable housing. If a local government provides such an exception or waiver, it is not required to use
any revenues to offset the impact. 27 The impact fee provisions do not apply to water and sewer
connection fees. 28
19 Ross, J. and Dutka, U., The Florida Housing Coalition, lnclusionary Housing: A Challenge Worth Taking, p. 7,
https://www. fl housing .org/wp-contenUuploads/2012/05/1 nclusionary-Housing-A-Challenge-Worth-Taking. pdf (last visited
Jan. 23, 2020).
20 Office of Economic and Demographic Research, The Florida Legislature, 2019 Local Government Financial Handbook,
p. 11, http://edr.state.fl.us/ContenUlocal-governmenUreports/lgfih19.pdf (last visited Jan. 23, 2020).
21 Id. Examples of proprietary fees include admissions fees, franchise fees, user fees, and utility fees.
22 Id at 17. Special assessments are typically used to construct and maintain capital facilities or to fund certain services.
23 See supra note 19.
24 S. 163.31801(3)(f) and (g), F.S.
2s S. 163.31801(3)(e), F.S.
26 S. 163.31801(3)(h) and (i), F.S.
21 S. 163.31801(8), F.S.
28 S. 163.31801(9), F.S.
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Local Government Financial and Economic Status Reporting
Local governments are accountable for the manner in which they spend public funds, and the
submission of financial reports required by state law is one method of demonstrating accountability.
Section 218.39, F.S., requires the completion of an annual financial audit of accounts and records
within nine months after the end of the fiscal year for counties, district school boards, charter schools,
and charter technical career centers and certain municipalities and special districts. The statute
requires filing of these annual financial audit reports with the State of Florida's Auditor General.
Section 218.32, F.S., requires counties, municipalities, and special districts to complete and submit to
the Florida Department of Financial Services (DFS) a copy of its annual financial report (AFR) for the
previous fiscal year no later than nine months after the end of the fiscal year. The AFR is not an audit
but rather a unique financial document completed using a format prescribed by DFS. 29
The Bureau of Local Government within DFS has created a web-based AFR system called Local
Government Electronic Reporting (LOGER) where local government entities complete and
electronically submit AFRs. 30 DFS personnel verify an entity's data entered in LOGER by comparing
the data to the financial statements included in the submitted audit report, or with other prescribed
information from those entities not subject to the audit requirement and contact the entities for
clarification when the comparisons yield significant differences. 31
In addition to the above local government financial reporting, ch. 2019-56, Laws of Fla, amended
ss. 129.03 and 166.241, F.S., to require counties and municipalities, respectively, to report certain
economic status information to the Office of Economic and Demographic Research. This includes
information on government spending and debt per resident, median income, average local government
employee salary, percentage of budget spent on employee salaries and benefits, and the number of
taxing districts.
Effect of the Bill
The bill amends ss. 125.01055 and 166.04151, F.S., to authorize a county commission and the
governing body of a municipality, respectively, to approve the development of affordable housing on
any parcel zoned for residential, commercial, or industrial use, notwithstanding any other law or local
ordinance or regulation to the contrary.
The bill amends s. 163.31801, F.S., to require the reporting of impact fee data within the annual
financial report specified under s. 218.32, F.S. The local government must report the specific purpose
of an impact fee including the specific infrastructure needs that the fee will be used for; a description of
the impact fee schedule policy and fee calculation methods; the amount assessed for each purpose
and type of dwelling; and the total amount of impact fees charged by type of dwelling.
29 See Department of Financial Services Bureau of Financial Reporting, Uniform Accounting System Manual for Florida
Local Governments (2014 ), https://www.myfloridacfo.com/Division/AA/Manuals/2014UASManual-7-31-15_Fl NAL. pdf (last
visited Jan. 23, 2020).
30 LOGER, https://apps.fldfs.com/LocalGov/Reports/ (last visited Jan. 23, 2020).
31 See Florida Auditor General, Local Government Financial Reporting System: Performance Audit Report 2019-028 (Sep.
2019), https://flauditor.gov/pages/pdf_files/2019-028.pdf (last visited Jan. 23, 2020).
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Accessory Dwelling Units (Section 2)
Present Situation
An accessory dwelling unit (ADU) is an ancillary or secondary living unit that has a separate kitchen,
bathroom, and sleeping area existing either within the same structure, or on the same lot, as the
primary dwelling unit. 32 The Legislature finds that encouraging local governments to permit ADUs to
increase the availability of affordable rentals serves a public purpose. 33 A local government may adopt
an ordinance allowing ADUs in any area zoned for single-family residential use based upon a finding
that there is a shortage of affordable rentals in its jurisdiction. 34 Each ADU allowed by an ordinance
must count towards the affordable housing component of the housing element in the local
government's comprehensive plan. 35 An application for a building permit to construct such ADUs must
include an affidavit which attests that the unit will be rented at an affordable rate to an extremely-low-
income, very-low-income, low-income, or moderate-income person or persons. 36
In 2019, the Florida Housing Coalition, the entity currently providing technical assistance and training
for the Catalyst Program under s. 420.531, F.S., published the Accessory Dwelling Unit Guidebook. 37
The stated intent of the Guidebook is to address the challenges and benefits a community might face
as it considers allowing the implementation of ADUs and presents a range of alternatives for local
governments and other stakeholders to consider and evaluate. Among other data points, the
Guidebook found that:
• Of Florida's 67 counties, 16 did not address ADUs in their land development codes; and
• Of the 15 most populous cities in Florida, 11 of them explicitly allow ADUs in single-family
districts.
Effect of the Bill
The bill provides a legislative finding that it serves an important public purpose to require (rather than
encourage) the permitting of ADUs in single-family residential areas. A local government must (rather
than may) adopt an ordinance to allow ADUs in any area zoned for single family residential use, except
in an area of critical state concern where the state caps the number of new housing units which may be
built within a year. The required ordinance would not be conditioned upon a finding that there is a
shortage of affordable rentals within the local jurisdiction.
State Apartment Incentive Loan Program: Local Government Contributions (Section 10)
Present Situation
The State Apartment Incentive Loan (SAIL) Program 38 provides low-interest loans on a competitive
basis to affordable housing developers. SAIL is funded through a statutory distribution of documentary
stamp tax revenues, which are deposited into the State Housing Trust Fund. This money often serves
to bridge the gap between the primary financing and the total cost of the development. SAIL dollars are
available to individuals, public entities, nonprofit organizations, or for-profit organizations that propose
the construction or substantial rehabilitation of multifamily units affordable to very low income
individuals and families. In most cases, the SAIL loan cannot exceed 25 percent of the total
development cost and can be used in conjunction with other state and federal programs.
32 S.163.31771 (2)(a), F.S.
33 S. 163.31771(1), F.S.
34 S.163.31771(3), F.S.
35 S. 163.31771(5), F.S.
36 S. 163.31771(4), F.S. The parameters defining the various income designations are specified ins 420.0004, F.S.
37 See Florida Housing Coalition, Accessory Dwelling Unit Guidebook, (May 2019) https://www.flhousing.org/wp-
contenUuploads/2019/08/ADU-Guidebook.pdf (last visited Jan. 23, 2020).
38 Sees. 420.5087, F.S., and Florida Housing Finance Corporation, State Apartment Incentive Loan, Background, for
information cited in this section, http://www.floridahousing.org/programs/developers-multifamily-programs/state-
apartment-incentive-loan (last visited Jan. 23, 2020).
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Florida Housing Finance Corporation (Florida Housing) administers the SAIL program and is required
to establish a review committee for the competitive evaluation and selection of applications submitted.
The evaluation criteria include local government contributions and local government comprehensive
planning and activities that promote affordable housing. 39
Effect of the Bill
The bill amends provisions of the SAIL Program to require the evaluation of additional components
within the review and selection process of applications submitted for funding. The additional
components relate to criteria surrounding local government contributions, including policies that
promote access to public transportation, reduce the need for on-site parking, and expedite permits for
affordable housing projects. The bill also modifies the requirement relating to a sponsor's prior
experience to provide that the sponsor cannot be required to have previously worked with Florida
Housing in order to qualify for the program. This modification broadens the eligible pool of sponsors
beyond those who already work with Florida Housing.
Community Workforce Housing Innovation Pilot Program (Section 11)
Present Situation
The Community Workforce Housing Innovation Pilot Program 40 (CWHIP) was created to provide
affordable rental and home ownership community workforce housing for essential services personnel
with medium incomes in high-cost and high-growth counties. Designed to use regulatory incentives and
state and local funds to promote local public-private partnerships and to leverage government and
private sources, Florida Housing administered the program in 200641 and 2007. 42
CWHIP targeted households earning higher incomes than traditionally served through other affordable
housing programs to create homeowner or rental housing for persons such as teachers, firefighters,
healthcare providers and others as defined by local governments. Households earning up to 140
percent of AMI could be served through the program with that provision rising up to 150 percent of AMI
in the Florida Keys. 43
CWHIP provided priority funding consideration to projects in counties where the disparity between the
AMI and the median sales price for a single family home was greatest. Priority funding consideration
was specified where: 44
• The local jurisdiction established local incentives such as expedited reviews of development
orders and permits and supported development near transportation hubs;
• Financial strategies like tax increment financing were utilized; and
• Projects set aside at least 80 percent of units for workforce housing and at least 50% for
essential services personnel.
CWHIP loans were awarded with a 1 to 3 percent interest rate and could be forgiven where long-term
affordability was provided and where at least 80 percent of the units are set aside for workforce housing
and at least 50 percent of the units are set aside for essential services. 45
Florida Housing administered two rounds of funding for CWHIP: $50 million in October of 2006 and
$62.4 million in December of 2007. 46
39 S.420.5087(6)(c}, F.S.
4 0 Ch. 2006-69, Laws of Fla.
41 Id. at s. 33
42 Specific Appropriations 1694, ch. 2007-72, Laws of Fla. Fiscal Year 2006 and 2007 appropriations were nonrecurring
and no additional funds have been appropriated since.
43 S. 420.5095(3)(a), F.S.
44
S. 420.5095(8), F.S.
45 S. 420.5095(11), F.S.
46 See Florida Housing Finance Corporation, 2007 Annual Report, p. 21, and 2008 Annual Report, p. 11,
http://www. floridahousi ng. org/docs/defau It-source/data-docs-and-reports/an n ual-reports/2007 Ann ua IReport. pdf and
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Effect of the Bill
The bill transitions the "pilot" features of a workforce housing program into the Community Workforce
Housing Loan Program, administered by Florida Housing. Workforce housing is defined as housing
affordable to persons of families whose total annual income does not exceed 80 percent of the area
median income or 120 percent of the area median income, adjusted for household size in specified
areas of critical concern. Florida Housing must establish a loan application process pursuant to SAIL
Program provisions under s. 420.5087, F.S., and award loans at a 1 percent interest rate for a term not
to exceed 15 years. Projects must be given priority if they set aside at least 50 percent of units for
workforce housing.
Affordable Housing Workshops for Locally Elected Officials utilizing Catalyst and SHIP
(Sections 12 and 15)
Present Situation
Affordable Housing Catalyst Program
Section 420.531, F.S., directs Florida Housing to operate the Affordable Housing Catalyst Program
(Catalyst Program) to provide specialized technical support to local governments and community-based
organizations to implement the HOME Investment Partnership Program, State Housing Initiatives
Partnership Program (SHIP), and other affordable housing programs. 47 Florida Housing currently
contracts with the Florida Housing Coalition to provide Catalyst Program training and technical
assistance. 48
The Florida Housing Coalition's technical assistance team consists of a geographically dispersed
network of personnel providing on-site and telephone/e-mail technical assistance as well as training
through workshops and webinars. 49 This technical assistance supports local governments and nonprofit
organizations and includes:
• Leveraging program dollars with other public and private funding sources;
• Working effectively with lending institutions;
• Implementing regulatory reform;
• Training for boards of directors;
• Implementing rehabilitation and emergency repair programs;
• Assisting with the creation of fiscal and program tracking systems; and
• Meeting compliance requirements of state and federally funded housing programs.
http://www.floridahousing.org/docs/default-source/data-docs-and-reports/annual-reports/2008AnnualReport_CDfile.pdf
(last visited Jan. 23, 2020).
47 To the maximum extent feasible, the entity to provide the necessary expertise must be recognized by the Internal
Revenue Service as a nonprofit tax-exempt organization.
48 Contract for Affordable Housing Catalyst Services between Florida Housing Finance Corporation and the Florida
Housing Coalition, Inc., (July 1, 2019) https://www.floridahousing.org/docs/default-source/legal/contracts/2019/014-2019--
-the-florida-housing-coalition-inc---affordable-housing-catalyst-program-services.pdf?sfvrsn=c09dea7b_2 (last visited Jan
23, 2020).
49 The 2019/2020 Catalyst Training Schedule, https://www.floridahousing.org/docs/default-source/programs/special-
programs/catalyst/training-schedule-catalyst-2019-2020.pdf?sfvrsn=2 (last visited Jan. 23, 2020). A link to the Florida
Housing Coalition's Work Shop and Webinar Calendar is available at
https:llwww.flhousing.orgleventsllist/?tribe_paged=2&tribe_event_display=list (last visited Jan. 23, 2020).
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State Housing Initiatives Partnership Program
Administered by Florida Housing, the SHIP Program provides funds to all 67 counties and 52
Community Development Block Grant entitlement cities on a population-based formula to finance and
preserve affordable housing based on locally adopted housing plans. 50 The program targets very-low,
low, and moderate-income families. SHIP is funded through a statutory distribution of documentary
stamp tax revenues that are deposited into the Local Government Housing Trust Fund.
Subject to specific appropriation, funds are distributed quarterly to local governments participating in
the program. 51 Funds are expended according to each local government's adopted Local Housing
Assistance Plan (LHAP), which details the housing strategies for that particular government. 52 Local
governments submit their LHAPs to Florida Housing for review to ensure that they meet the broad
statutory guidelines and the requirements of the program rules. Florida Housing must approve an LHAP
before a local government may receive SHIP funding for the applicable years.
SHIP Incentive Strategies and Advisory Committee
Within 12 months of adopting a LHAP, each participating local government must amend the plan to
include local housing incentive strategies. 53 The strategies must:
• Assure that permits for affordable housing projects are expedited;
• Establish an ongoing process to review local policies, ordinances, regulations, and plan
provisions that actually increase the cost of housing; and
• Include a schedule for implementing the incentive strategies. 54
Local governments must appoint members to an Affordable Housing Advisory Committee (AHAC) that
triennially reviews the established policies and procedures, ordinances, land development regulations,
and adopted local government comprehensive plan. 55 The AHAC is comprised of local citizens
representing a range of affordable housing stakeholders. 56 At a minimum, each AHAC must submit a
report to the local governing body on certain affordable housing incentives including: 57
• The processing of approvals of development orders or permits for affordable housing.
• The modification of impact-fee requirements, including reduction or waiver of fees and
alternative methods of fee payment for affordable housing.
• The allowance of flexibility in densities for affordable housing.
• The allowance of affordable accessory residential units in residential zoning districts.
• The reduction of parking and setback requirements for affordable housing.
Local governments that receive the minimum allocation under SHIP 58 must perform the initial incentives
review but may elect to not perform the subsequent triennial reviews.
Statutorily Authorized Affordable Housing Study Groups
In 1986, the Affordable Housing Study Commission (Commission) was created to evaluate affordable
housing policy issues and programs. 59 This commission is charged with recommending public policy
changes to the Governor and Legislature to stimulate community development and revitalization, as
well as promoting the production, preservation and maintenance of decent, affordable housing for all
Floridians. The Commission is comprised of 21 members meeting specific statutory criteria, all of whom
50 See ss. 420.907-420.9089, F.S.
51 S. 420.9073, F.S.
52 S.420.9075, F.S.
s3 S. 420.9076(1), F.S.
54 S. 420.9071(16), F.S.
55 S. 420.9076(4), F.S.
ss S.420.9076(2), F.S.
s1 S. 420.9076(4), F.S.
58 Pursuant to s. 420.9073(3), F.S., the minimum local housing distribution is $350,000.
59 Chapter 86-192 Laws of Fla.
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°
are appointed by the Governor. 6 Florida Housing provides administrative support to the Commission,
but the Commission has not received funding or gubernatorial appointments since 2008. 61
In 2017, the Legislature created a statewide Affordable Housing Workgroup (Workgroup). 62 The 14-
member body consisted of current and previously elected state and local officials as well as
stakeholders from the private and non-profit affordable housing community. The Workgroup's final
report was submitted to the Governor and Legislature and provided findings and recommendations
addressing the state's affordable housing needs, including strategies and pathways for low-income
housing in the state. 63
Effect of the Bill
The bill amends s. 420.531, F.S., to establish biannual regional workshops for locally elected officials
serving on affordable housing advisory committees as provided for SHIP ins. 420.9076, F.S. The entity
providing statewide training and technical assistance for the Catalyst Program will administer and
conduct the workshops with the intent of facilitating peer-to-peer identification and sharing of best
affordable housing practices. Workshops must be conducted through teleconferencing or other
technological means. The entity providing the statewide training and technical assistance must provide
annual reports summarizing the deliberations, actions, and recommendations of each region, as well as
attendance records of locally elected officials, to the President of the Senate, the Speaker of the House
of Representatives, and Florida Housing by March 31 of the following year.
This section also includes SAIL among the programs listed for which Catalyst Program may provide
technical support.
The bill amends s. 420.9076, F.S., to modify requirements of SHIP affordable housing advisory
committees. The new provisions include ensuring that one locally elected official from each
participating SHIP county or municipality serves on the advisory committee. This official, or a locally
elected designee, must attend biannual workshops on affordable housing best practices. If a locally
elected official fails to attend three consecutive regional workshops, Florida Housing may withhold the
participating SHIP entity's funds pending the official's attendance at the next regularly scheduled
biannual meeting.
The section also requires annual, rather than triennial, affordable housing advisory committee reviews
of local policies and provisions affecting affordable housing. An annual report of advisory committee
reviews and recommendations must be submitted to the local governing body and to the entity
providing statewide training and technical assistance for the Catalyst Program. In addition to currently
provided information, the report must now also include information on all allowable fee waivers for the
development or construction of affordable housing.
Local Housing Distributions for Persons Aging out of Foster Care (Section 13)
Present Situation
Affordable Housing Funding for Special Needs Populations
Section 420.0004(13), F.S., defines a person with special needs as:
an adult person requiring independent living services in order to maintain housing or
develop independent living skills and who has a disabling condition; a young adult
formerly in foster care who is eligible for services under s. 409.1451 (5); a survivor of
60 S. 420.609, F.S.
61 Commission Annual Reports submitted from 1987-2008, http://apps.floridahousing.org/StandAlone/AHSC/AHSC-
AnnualReports.htm (last visited Jan. 23, 2020).
62 Chapter 2017-71, s. 46, Laws of Fla. Legislation creating the workgroup designated Florida Housing Finance
Corporation as the administering entity.
63 The Workgroup's Final Report, meeting agendas, research materials and other information is available at
https://www.floridahousing.org/about-florida-housing/workgroup-on-affordable-housing (last visited Jan. 24, 2020).
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domestic violence as defined in s. 741.28; or a person receiving benefits under the
Social Security Disability Insurance (SSDI) program or the Supplemental Security
Income (SSI) program or from veterans' disability benefits.
Each local government participating in the SHIP Program must use a minimum of 20 percent of its local
housing distribution to serve persons with special needs. 64 A local government must certify it will meet
this requirement through existing approved strategies in its LHAP.
Section 420.507(48), F.S., requires Florida Housing to reserve up to 5 percent of certain annual
allocations for high-priority affordable housing projects for veterans and their families, and other special
needs populations. Florida Housing must reserve an additional 5 percent of each allocation for
affordable housing projects directed to persons with disabling conditions.
According to the statewide 2019 Rental Market Study, an estimated 104,273 cost burdened renter
households receive disability-related Social Security, SSl, 65 and veterans' benefits statewide. 66 Based
on service use, an estimated 7,836 survivors of domestic violence and 2,574 youth exiting foster care
are in need of affordable housing. 67
Services and Support for Persons Aging Out of Foster Care
The Department of Children and Families (DCF) is responsible for administering an array of
independent living services to eligible young adults ranging in ages 18-22 (not yet 23), including
supports in making the transition to self-sufficiency. 68
Extended Foster Care (EFC) provides eligible young adults the option of remaining in foster care until
the age of 21 or until the age of 22 if they have a disability. EFC is a voluntary program that requires
the young adult to agree to participate in school, work, or a work training program in accordance with
federal and state guidelines. Exceptions and accommodations are made for young adults with a
documented disability. 69
Effect of the Bill
The bill authorizes Florida Housing to withhold up to five percent of annual Local Government Housing
Trust Fund distributions to eligible SHIP entities for the construction of transitional housing for persons
aging out of foster care. Funds may not be used for the design or planning of transitional housing and
the housing must be constructed on campus. Florida Housing must consult with the DCF on criteria for
such housing. Any withheld funds not distributed or committed by the end of the year fiscal year must
be distributed utilizing existing calculation formulas.
64 S. 420.9075(5)(d), F.S.
65 Supplemental Security Income. See generally 42 U.S.C. §§1381-1385 (Title XVI of the Social Security Act).
66 Shimberg Center for Housing Studies, University of Florida, 2019 Rental Market Study, p. 2 (May 2019),
http://www.shimberg.ufl.edu/publications/RMS_2019.pdf (last visited Jan. 23, 2020). The Rental Market Study defines
'cost burdened' to mean the household is paying at least 40 percent of income toward gross rent. See p. 5.
67 Id.
68 Ss. 39.6251 & 409.1451, F.S.
69 Department of Children and Families, Independent Living Services Annual Report (Jan. 31, 2019),
https://www.myflfamilies.com/service-programs/child-
welfare/docs/2019LMRs/lndependent%20Living%20Services%202018%20Annual%20Report.pdf (last visited Jan. 23,
2020).
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Annual SHIP Entity Reporting Submissions to Florida Housing (Section 14)
Present Situation
Each local government participating in SHIP must annually submit a report of its affordable housing
programs and accomplishments to Florida Housing. The local government's chief elected official or his
or her designee must certify the report as accurate and complete. Among the many items included in
the report are: 70
• The number of households served by income category, age, family size, and race, and data
regarding any special needs populations.
• The number of units and the average cost of producing units under each local housing
assistance strategy.
• By income category, the number of mortgages made, the average mortgage amount, and the
rate of default.
• A description of the status of implementation of each local housing incentive strategy.
After reviewing the report, if Florida Housing determines a violation of the criteria for a LHAP may have
occurred, or that an eligible sponsor or eligible person has violated the applicable award conditions,
Florida Housing reports the violation to its compliance monitoring agent and the Executive Office of the
Governor. 71 If a violation is deemed to have occurred, the distribution of program funds to the local
government must be suspended until the violation is corrected. 72
Effect of the Bill
The bill amends s. 420.9075, F.S., to require a SHIP entity's annual program reporting to Florida
Housing include data on the number of affordable housing applications submitted, the number
approved, and the number denied. The bill also requires the selection criteria developed by each SHIP
entity to provide priority to applicants who need less assistance under the program. This change is
meant to maximize the total number of applicants who receive an award under the program.
Mobile Homes
Chapter 723, F.S., the "Florida Mobile Home Act" (Mobile Home Act) addresses the unique relationship
between a mobile home owner and a mobile home park owner. 73 The provisions in the Mobile Home
Act apply to residential tenancies where a mobile home is placed upon a lot that is rented or leased
from a mobile home park that has 10 or more lots offered for rent or lease. 74
The courts recognize the relationship between the mobile home park owner and the mobile home
owner is not simply one of landlord and tenant but "a hybrid type of property relationship" in which both
have "basic property rights which must reciprocally accommodate and harmonize." 75 This is due to the
very nature of the mobile home:
Mobile homes come to rest in established parks, the wheels are generally removed, they are
anchored to the ground, because of forces of the wind, connections with electricity, water and
sewerage are made, awnings are frequently attached, and to a large degree they lose their
mobility except, unless, and until the wheels are restored, disruption of electrical, water and
sewer connections is had and a certain amount of dismantling and crating is had, all at a
substantial expense of the owner of the mobile home who had bought such home with the
expectation of being able to remain in the park for a not unreasonable time so long as he abides
by all the reasonable regulations established by the park owner. The removal from one park to
7o S. 420.9075(10), F.S.
71 S. 420.9075(13), F.S.
72 Jd.
73 S.723.004, F.S.
74 S. 723.002(1), F.S. The Mobile Home Act does not apply to tenancies in which both the mobile home and the mobile
home lot are rented or leased by the mobile home resident.
75 Stewart v. Green, 300 So. 2d 889, 892 (Fla. 1974).
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another becomes more than a mere hitching to a truck or tractor and pulling it away. To a large
degree, mobile homes are occupied by people in the lower income brackets who cannot spend
several hundred dollars at the mere whim of a lessor park. 76
Mobile homes are not "mobile" in the same sense as are recreational vehicles or camper trailers. 77
"Because of the difficulties inherent in moving the home from one settled location to another ... it is hard
to imagine a situation where the park owner and the tenants are in an equal bargaining position on rent
increases." 78 To better balance the interests of the park owner and the home owner, the Legislature
enacted laws culminating in the Mobile Home Act7 9
Chapter 723.003, F.S., provides the following relevant definitions:
• "Mobile home park" or "park" means a use of land in which lots or spaces are offered for rent or
lease for the placement of mobile homes and in which the primary use of the park is
residential. 80
• "Mobile home owner," "mobile homeowner," "home owner," or "homeowner'' means a person
who owns a mobile home and rents or leases a lot within a mobile home park for residential
use. 81
Mobile home parks are regulated by the Division of Condominiums, Timeshares, and Mobile Homes
(division) within the Department of Business and Professional Regulation. A mobile home park owner
must pay to the division, on or before October 1 of each year, an annual fee of $4 for each mobile
home lot within the mobile home park owned. 82 If the fee is not paid by December 31 a penalty of 1O
percent of the amount due must be assessed. Additionally, if the fee is not paid, the park owner does
not have standing to maintain or defend any action in in court until the amount due, plus any penalty, is
paid. 83 Additionally, a surcharge of $1 is levied on each annual fee. The surcharge collected must be
deposited in the Florida Mobile Home Relocation Trust Fund. 84
Mobile Home Dealer Display Requirements (Section 5}
Present Situation
A mobile home dealer must hold a license issued by the DHSMV. 85 The term "dealer" means "any
person engaged in the business of buying, selling, or dealing in mobile homes or offering or displaying
mobile homes for sale." 86 The term also includes a mobile home broker. 87 Any person who buys, sells,
deals in, or offers or displays for sale, or who acts as the agent for the sale of, one or more mobile
homes in any 12-month period is prima facie presumed to be a dealer. The term "dealer'' does not
include banks, credit unions, or finance companies that acquire mobile homes as an incident to their
regular business and does not include mobile home rental and leasing companies that sell mobile
homes to dealers licensed under this section. 88
76 Palm Beach Mobile Homes v. Strong, 300 So. 2d 881, 886 (Fla. 1974 ).
77 Stewart v. Green, id.
78 Belcher v. Kier, 558 So.2d 1039, 1042 (Fla. 2d DCA 1990) (citation omitted).
79 Herrick v. Florida Dept. of Business Regulation, 595 So.2d 148, 152 (Fla. 1st DCA 1992).
so S. 723.003(12), F.S.
a1 S. 723.003(11 }, F.S.
a2 S. 723.007(1), F.S.
83 Id.
84 S. 723.007(2), F.S.
85 S. 320.77(2), F.S.
8s S. 320.77(1)(a), F.S.
87 Sees. 320.77(1)(b}, F.S., defining the term "mobile home broker."
88 S. 320.77(1)(a), F.S.
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The place of business of the mobile home dealer must be at a permanent location, not a tent or a
temporary stand or other temporary quarters. The location of the place of business must afford
sufficient unoccupied space to store all mobile homes offered and displayed for sale. 89
Effect of the Bill
The bill amends s. 320.77, F.S., to remove the requirement that a place of business of a mobile home
dealer must afford sufficient unoccupied space to store all mobile homes offered and displayed for sale.
Under the bill, the place of business of a mobile home dealer must have sufficient space to display a
manufactured home as a model home.
Recreational Vehicle Dealers (Section 6)
Present Situation
A recreational vehicle dealer must hold a license issued by the DHSMV. 90 The term "dealer" means any
person engaged in the business of buying, selling, or dealing in recreational vehicles or offering or
displaying recreational vehicles for sale. The term does not include banks, credit unions, and finance
companies that acquire recreational vehicles as an incident to their regular business and does not
include mobile home rental and leasing companies that sell recreational vehicles to dealers licensed
under s. 320.77, F.S.
A recreational vehicle is a type of motor vehicle primarily designed as temporary living quarters for
recreational, camping, or travel use, which either has its own motive power or is mounted on or drawn
by another vehicle. 91 The basic "entities" of a recreational vehicle include the "park trailer," which is a
transportable unit that has a body width not exceeding 14 feet and which is built on a single chassis
and is designed to provide seasonal or temporary living quarters when connected to utilities necessary
for operation of installed fixtures and appliances. 92
A recreational vehicle dealer must be insured under a garage liability insurance policy that includes a
minimum $25,000 combined single-limit liability coverage, including bodily injury and property damage
protection, and $10,000 personal injury protection. 93
Effect of the Bill
The bill amends s. 320.771 (3)(j), F.S., to exempt a recreational vehicle dealer from the requirement to
be insured under a garage liability insurance policy if the dealer sells only park trailers.
Repair and Remodeling Codes for Mobile and Manufactured Homes (Sections 7 and 8)
Present Situation
Chapter 320, F.S., relates to the regulation and enforcement of motor vehicle standards and licenses
by the DHSMV. Section 320.01(2)(a), F.S., defines the term "mobile home" to mean:
[A] structure, transportable in one or more sections, which is 8 body feet or more in width
and which is built on an integral chassis and designed to be used as a dwelling when
connected to the required utilities and includes the plumbing, heating, air-conditioning,
and electrical systems contained therein. For tax purposes, the length of a mobile home
is the distance from the exterior of the wall nearest to the drawbar and coupling
mechanism to the exterior of the wall at the opposite end of the home where such walls
enclose living or other interior space. Such distance includes expandable rooms, but
B9 S. 320.77(3)(h), F.S.
90 S. 320.771(2), F.S.
91 Sees. 320.01(1) (b), F.S.
s2 S. 320.01(1) (b) 7., F.S.
93 S.320.771 (3) U), F.S.
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excludes bay windows, porches, drawbars, couplings, hitches, wall and roof extensions,
or other attachments that do not enclose interior space. In the event that the mobile
home owner has no proof of the length of the drawbar, coupling, or hitch, then the tax
collector may in his or her discretion either inspect the home to determine the actual
length or may assume 4 feet to be the length of the drawbar, coupling, or hitch.
Section 320.01(2)(b), F.S., defines the term "manufactured home" to mean:
[A] mobile home fabricated on or after June 15, 1976, in an offsite manufacturing facility
for installation or assembly at the building site, with each section bearing a seal certifying
that it is built in compliance with the federal Manufactured Home Construction and
Safety Standard Act.
Section 320.822(2), F.S., defines the term "code" to include the "Mobile Home Repair and Remodeling
Code" and the "Used Recreational Vehicle Code."
Section 320.8232(2), F.S., requires that the provisions of the Repair and Remodeling Code ensure safe
and livable housing and that the code not be more stringent than those standards required to be met in
the manufacture of mobile homes. Such provisions must include, but not be limited to, standards for
structural adequacy, plumbing, heating, electrical systems, and fire and life safety. Section
320.8232(2), F.S., uses the term "Repair and Remodeling Code" and not the term "Mobile Home
Repair and Remodeling Code."
Section 320.822(1), F.S., requires compliance with the "Used Recreational Vehicle Code" for
recreational vehicles manufactured after January 1, 1968, and sold or offered for sale in this state by a
dealer or manufacturer.
Effect of the Bill
The bill amends s. 320.822, F.S., to revise the term "Mobile Home Repair and Remodeling Code" to the
"Mobile and Manufactured Home Repair and Remodeling Code."
The bill amends s. 320.8232, F.S., to require the Mobile and Manufactured Home Repair and
Remodeling Code to be a uniform code. The bill requires that all repairs and remodeling of mobile and
manufactured homes must be performed in accordance with rules of the DHSMV.
Jurisdiction of the Public Service Commission as it relates to Mobile Home Parks and Water and
Wastewater Systems (Section 9)
Present Situation
Currently, the Public Service Commission (PSC) has jurisdiction over 150 water and wastewater
investor-owned utilities (IOUs) in 38 of 67 counties in Florida. 94
The remaining water and wastewater customers in the state are not subject to PSC regulation and are
served either by IOUs in non-jurisdictional counties, by wells and septic tanks, or by systems owned,
operated, managed, or controlled by governmental authorities or by statutorily exempt utilities (such as
municipal utilities, cooperatives, and non-profits). 95
Section 367.022(5), F.S., exempts from regulation by the PSC "landlords providing [water or
wastewater] service to their tenants without specific compensation for the service." Also exempted from
regulation is any person who resells water service to his or her tenants or to individually metered
94 Public Service Commission, Data of the Florida Utility Industry, p. 31
(June 2019),
http://www.psc.state.fl.us/Files/PDF/Publications/Reports/General/Factsandfigures/June%202019.pdf (last visited Jan. 23,
2020).
95 Sees. 367.022, F.S.
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residents for a fee that does not exceed the actual purchase price of the water service plus the actual
cost of meter reading and billing, not to exceed nine percent of the actual cost of service. 96
Chapter 723.003, F.S., provides the following relevant definitions:
• "Mobile home subdivision" means a subdivision of mobile homes where individual lots are
owned by owners and where a portion of the subdivision or the amenities exclusively serving
the subdivision are retained by the subdivision developer. 97
• "Mobile home lot rental agreement" or "rental agreement" means any mutual understanding or
lease, whether oral or written, between a mobile home owner and a mobile home park owner in
which the mobile home owner is entitled to place his or her mobile home on a mobile home lot
for either direct or indirect remuneration of the mobile home park owner. 98
• "Lot rental amount" means all financial obligations, except user fees, which are required as a
condition of the tenancy. 99
• "User fees" means those amounts charged in addition to the lot rental amount for nonessential
optional services provided by or through the park owner to the mobile home owner under a
separate written agreement between the mobile home owner and the person furnishing the
optional service or services. 100
Effect of the Bill
The bill includes the reselling of "wastewater service" within the current exemption from regulation by
the PSC.
The bill also exempts from regulation by the PSC the owner of a mobile home park operating both as a
mobile home park and a mobile home subdivision, who provides service within the park and subdivision
to a combination of both tenants and lot owners, provided that the service to tenants is without specific
compensation.
Prospectus or Offering Circular and Rental Agreements (Sections 16 and 17)
Present Situation
Prospectus
The mobile home park prospectus is the document that governs the landlord-tenant relationship
between the park owner and the mobile home owner. 101 The prospectus or offering circular, together
with its attached exhibits, is a disclosure document intended to afford protection to homeowners and
prospective homeowners in a mobile home park. The purpose of the document is to disclose the
representations of the mobile home park owner concerning the operations of the mobile home park. 102
The prospectus must include a description of the mobile home park property, including, but not limited
to:103
• The number of lots in each section, the approximate size of each lot, the setback requirements,
and the minimum separation distance between mobile homes as required by law.
• The maximum number of lots that will use shared facilities of the park; and, if the maximum
number of lots will vary, a description of the basis for variation.
96 S. 367.022(9), F.S.
97 S. 723.003(14), F.S.
98 S. 723.003(10), F.S.
99 S. 723.003(6), F.S.
100 S. 723.003(21), F.S.
101 S. 723.012, F.S.
102 S. 723.011 (3), F.S.
103 S. 723.012(4), F.S.
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The prospectus must also include a description of all improvements, whether temporary or permanent,
which are required to be installed by the mobile home owner as a condition of occupancy in the park. 104
If the tenancy was in existence on the effective date of ch. 723, F.S., (June 4, 1984), 105 the prospectus
or offering circular offered by the mobile home park owner must contain the same terms and conditions
as rental agreements offered to all other mobile home owners residing in the park on the effective date
of the Mobile Home Act, excepting only rent variations based upon lot location and size, and must not
require any mobile home owner to install any permanent improvements.
In a mobile home park containing 26 or more lots, the park owner must file a prospectus with the
division for approval. 106 The division maintains copies of each prospectus and all amendments to each
prospectus that it has approved. 107
The park owner must provide a copy of the prospectus with exhibits to each prospective lessee prior to
the execution of the lot rental agreement or at the time of occupancy, whichever occurs first. The lot
rental agreement is voidable by the lessee for a period of 15 days after receipt of the prospectus. 108
By rule of the division, the prospectus distributed to a home owner or prospective home owner is
binding for the length of the tenancy, including any assumptions of that tenancy, and may not be
changed except in certain specified circumstances. 109
Mobile Home Lot Rental Agreements
Rental agreements in a mobile home park must be consistent with the Mobile Home Act. 110 The
provisions of ch. 723, F.S., are deemed to apply to every tenancy in a mobile home park whether or not
a tenancy is covered by a valid written rental agreement. 111
Park owners are prohibited from offering a rental agreement for a term of less than one year. 112 If there
is no written rental agreement, the rental term may not be less than one year from the date of initial
occupancy. The initial term may be less than one year in order to permit the park owner to have all
rental agreements within the park commence at the same time. Thereafter, all terms must be for a
minimum of one year. 113
Effect of the Bill
The bill amends s. 723.011, F.S., to permit the park owner to disclose in the prospectus permanent
improvements the mobile home owner must install to the mobile home.
The bill amends s. 723.012, F.S., to provide that if a park owner intends to include additional property
and mobile home lots and to increase the number of lots that will use the shared facilities of the park,
the park owner must amend the prospectus to disclose those additions. If the number of mobile home
lots in the park increase by more than 15 percent of the total number of lots in the original prospectus,
the park owner will reasonably offset the impact of the additional lots by increasing the shared facilities.
The amendment to the prospectus must include a reasonable timeframe for providing the required
additional shared facilities. The costs and expenses necessary to increase the shared facilities will not
be passed on or pass through to the existing mobile home owners.
Mobile Home Owner General Obligations (Section 18)
104 S. 723.012(7). F.S.
105 See Chapter 84-80, Laws of Fla.
10s S. 723.011 (1 )(a), F.S.
101 S. 723.011 (1 )(d), F.S.
10a Ss. 723.011(2) and 723.014(1), F.S.
109 See Rule 618-31.001, F.A.C.
110 S. 723.031(1), F.S.
111 Id. at (2).
112 S.723.031(4), F.S.
113 /d.
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Present Situation
Section 723.023, F.S., sets forth the mobile home owner's general obligations. A mobile home owner
must at all times:
• Comply with building, housing, and health codes, including compliance with all building permits
and construction requirements for construction on the mobile home and lot. The homeowner is
responsible for all fines imposed by the local government for noncompliance with any local
codes.
• Keep the mobile home lot, which he or she occupies clean, neat, and sanitary, and maintained
in compliance with all local codes.
• Comply with properly promulgated park rules and regulations and require other persons on the
premises with his or her consent to comply with such rules and to conduct themselves, and
other persons on the premises with his or her consent, in a manner that does not unreasonably
disturb other residents of the park or constitute a breach of the peace.
Effect of the Bill
The bill requires mobile home owners to:
• Receive written approval from the mobile home park owner before making any exterior
modification or addition to the home.
• When vacating the premises, remove any debris and other property of any kind that is left on
the mobile home lot.
Mobile Home Park Rent Increases (Sections 19 and 20)
Present Situation
A purchaser of a mobile home has the right to assume the remainder of the term of any rental
agreement in effect between the mobile home park owner and seller. 114 The purchaser is also entitled
to rely on the terms and conditions of the prospectus or offering circular as delivered to the initial
recipient. 115
The mobile home park owner may increase the rental amount upon the expiration of the assumed
rental agreement "in an amount deemed appropriate by the mobile home park owner." 116 The park
owner must give affected mobile home owners and the board of directors of the homeowners'
association, if one has been formed, at least a 90-day notice of a lot rental increase. 117
The amount of the lot rental increase must be disclosed to the purchaser of a mobile home and agreed
to in writing by the purchaser. 118 Lot rental increases may not be arbitrary or discriminatory between
similarly situated tenants in the park, and the lot rental may not increase during the term of the rental
agreement. 119 However, the mobile home park owner may pass on, at any time during the term of the
rental agreement, ad valorem property taxes and utility charges, or increases of either, if the passing on
of these costs was disclosed prior to the tenancy. 120
A park owner is deemed to have disclosed the passing on of ad valorem property taxes and non-ad
valorem assessments if ad valorem property taxes or non-ad valorem assessments were disclosed as
a factor for increasing the lot rental amount in the prospectus or rental agreement. 121
114 S. 723.059(3), F.S.
115 /d.
116 S. 723.059(4), F.S.
m S. 723.037(1), F.S.
118 S. 723.031(5), F.S.
119 /d.
120 S. 723.031 (5)(c), F.S.
121 Id.
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A park owner must give written notice to each affected mobile home owner and the board of directors
of the homeowners' association, if one has been formed, at least 90 days before any increase in lot
rental amount or reduction in services or utilities provided by the park owner or change in rules and
regulations. 122 The notice must identify all other affected homeowners, which may be by lot number,
name, group, or phase. If the affected homeowners are not identified by name, the park owner shall
make the names and addresses available upon request. 123
A committee of no more than five people, designated by a majority of the owners or by the board of
directors of the homeowners' association (if formed), and the park owner must meet no later than 60
days before the effective date of a rent increase to discuss the reasons for the increase. 124 At the
meeting, the park owner or subdivision developer must in good faith disclose and explain all material
factors resulting in the decision to increase the lot rental amount, reduce services or utilities, or change
rules and regulations, including how those factors justify the specific change proposed. 125
If the meeting does not resolve the issue, then additional meetings may be requested. If subsequent
meetings are unsuccessful, within 30 days of the last scheduled meeting, the mobile home owners may
petition the division to initiate mediation. 126 If the mediation does not successfully resolve the dispute,
then the parties may file an action in circuit court to challenge the rental increase as unreasonable. 127
Effect of the Bill
The bill amends s. 723.031, F.S., to require ad valorem property taxes or non-ad valorem assessments
be disclosed in the prospectus or rental agreement as a separate charge or a factor in order for a park
owner to be deemed to have disclosed the passing on of ad valorem property taxes and non-ad
valorem assessments.
The bill prohibits a park owner from charging or collecting from the mobile home owners any sum of ad
valorem taxes or non-ad valorem taxes in an amount in excess of the sums remitted by the park owner
to the tax collector.
The bill amends s. 723.037, F.S., to permit the park owner to give notice of all rent increases for
multiple anniversary dates in the same 90-day notice. The bill provides that the requirement for the park
owner to make available, upon request, the identifying information for homeowners affected by a rent
increase does not authorize the park owner to release of the names, addresses, or other private
information about the homeowners to the association or any other person for any other purpose.
The bill provides that the committee must address all lot rental amount increases that are specified in
the notice of lot rental amount increase, regardless of the effective date of the increase.
Replacing Mobile Homes in Mobile Home Parks (Section 21)
Present Situation
Except as expressly preempted by the requirements of DHSMV, a mobile home owner or the park
owner is authorized to "site any size new or used mobile home and appurtenances on a mobile home
lot in accordance with the lot sizes, separation and setback distances, and other requirements in effect
at the time of the approval of the mobile home park." 128
Effect of the Bill
122 S. 723.037(1 ), F.S.
123 /d.
124 S. 723.037(4)(a), F.S.
12s S. 723.037(4)(b), F.S.
12s S. 723.037(5)(a), F.S.
127 S. 723.0381, F.S.
128 S. 723.041(4), F.S.
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The bill provides that a mobile home park that is damaged or destroyed due to wind, water, or other
natural force may be rebuilt on the same site with the same density as was approved, permitted, and
built before the park was damaged or destroyed.
The bill provides that the regulation of the uniform fire safety standards established under s. 633.206,
F.S., are not limited by this section of the Mobile Home Act. However, the section supersedes any other
density, separation, setback, or lot size regulation adopted after initial permitting and construction of the
mobile home park.
Park Owner Disclosures Prior to Residence (Section 22)
Present Situation
A mobile home park owner or developer may not require a person, as a precondition to occupancy in
the mobile home park, to provide any improvement unless the requirement is disclosed pursuant to
s. 723.011, F.S, which requires the park owner to deliver a prospectus to the prospective homeowner
before the rental of a mobile home lot. 129
In a mobile home park containing 26 or more lots, the park owner must file a prospectus with the
division. 130 The prospectus must include a "description of all improvements, whether temporary or
permanent, which are required to be installed by the mobile home owner as a condition of his or her
occupancy in the park." 131
Effect of the Bill
The bill provides that a mobile home park owner or developer may not require a person, as a
precondition to occupancy in the mobile home park, to provide any improvement unless the
requirement is disclosed in the prospectus as required under s. 723.012(7), F.S.
129 S. 723.011 (2), F.S.
130 S. 723.011(1), F.S.
131 S. 723.012(7), F.S.
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Purchasers of a Mobile Home within Mobile Home Park (Section 23)
Present Situation
The purchaser of a mobile home has the right to assume the remainder of the term of any rental
agreement in effect between the mobile home park owner and the seller. The purchaser is entitled to
rely on the terms and conditions of the prospectus or offering circular as delivered to the initial
recipient. 132
Upon the expiration of the assumed rental agreement, the mobile home park owner may increase the
rental amount if the increase is disclosed to the purchaser prior to his or her occupancy and is imposed
in a manner consistent with the initial offering circular or prospectus and ch. 723, F.S. 133
Effect of the Bill
The bill provides that while that the purchaser of a mobile home on a rented lot may assume the seller's
prospectus, nothing prohibits the park owner from offering the purchaser any approved prospectus.
The bill requires a mobile home park owner to disclose the lot rental amount to be charged for a new
tenancy prior to the applicant paying a screening fee and applying for approval of the tenancy.
Termination of a Tenancy (Section 24)
Present Situation
Section 723.061, F.S., provides the following grounds for termination of a rental agreement:
• Nonpayment of rent;
• Conviction of a violation of a federal or state law or local ordinance, if the violation is detrimental
to the health, safety, or welfare of other residents of the mobile home park;
• A violation of the park rules or of the rental agreement;
• A change in land use; or
• Failure to qualify as, and to obtain approval to become, a tenant or occupant of the home, if
such approval is required by a properly promulgated rule.
Notice of an eviction must be posted on the premises and sent to the mobile home owner and tenant or
occupant by certified or registered mail, return receipt requested. 134
Effect of the Bill
The bill requires a park owner to send the change in use eviction notice to the division within 20 days.
The division must then provide the executive director of the Florida Mobile Home Relocation
Corporation with a copy of the notice.
The bill provides that a park owner's acceptance of any portion of a lot rental amount may constitute a
waiver of the right to terminate the rental agreement or the right to bring a civil action for the
noncompliance for any subsequent or continuing noncompliance. Any rent so received by the park
owner must be accounted for at the final hearing.
132 S. 723.059(3), F.S.
133 S. 723.059(4), F.S.
134 S. 723.061(4), F.S.
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Homeowners' Association Incorporation (Section 25)
Present Situation
In order to exercise the rights of a homeowners' association (association}, mobile home owners must
form an association that must be either a for profit or not for profit corporation and of which not less
than two-thirds of all the mobile home owners within the park must have consented in writing to
become members or shareholders. The term "member'' or "shareholder'' means a mobile home owner
who consents to be bound by the articles of incorporation, bylaws, and polices of the incorporated
homeowners' association. 135
Upon receiving its certificate of incorporation the association must notify the park owner in writing of its
creation and must advise the park owner of the names and addresses of the association officers. This
notice must be made by personal delivery upon the park owner's representative as designated in the
prospectus or by certified mail, return receipt requested. 136
Effect of the Bill
The bill amends s. 723.076, F.S., to specify that the association must notify the park owner in writing by
certified mail, return receipt requested, of names and addresses of newly elected or appointed officers
or members to the association.
Homeowners' Association Bylaws (Section 26)
Present Situation
Voting Requirements and Proxies
Unless otherwise provided in the bylaws, 30 percent of the total membership is required to constitute a
quorum for a meeting of the association. 137 A member may not vote by general proxy, but may vote by
limited proxies substantially conforming to a limited proxy form adopted by the division. However,
members may cast votes for association board members by limited or general proxy. 138 If a mobile
home or subdivision lot is jointly owned, the owners of the mobile home or subdivision lot must be
counted as one for the purpose of determining the number of votes required for a majority. Only one
vote per mobile home or subdivision lot will be counted. Any number greater than 50 percent of the
total number of votes constitutes a majority. 139
Board of directors' and committee meetings
Meetings of the board of directors and meetings of its committees at which a quorum is present must
be open to all members. This requirement does not apply to meetings held for the purpose of
discussing personnel matters or meetings with the association's attorney where the contents of the
discussion would be governed by the attorney-client privilege. 140
Member Meetings
The association must conduct at least one member meeting annually during which members of the
board of the directors are elected. The association's bylaws may not restrict the nomination from the
floor of any member desiring to be a candidate for board membership. All nominations from the floor
must be made at a meeting of the members held at least 30 days before the annual meeting. Unless
waived in writing, the notice of the annual meeting must be mailed, hand delivered, or electronically
transmitted to each member to at least 14 days before the meeting. An officer of the association must
135 S. 723.075(1), F.S.
136 S. 723.076(1 ), F.S.
131 S. 723.078(2)(b)1., F.S.
13s S. 723.078(2)(b)2., F.S.
139 S. 723.078(2)(b)2, F.S.
140 S. 723.078(2)(c), F.S.
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provide an affidavit affirming that the notices were mailed or hand delivered to each member at the
address last furnished to the corporation. 141
Minutes of Meetings
The minutes of all meetings of members of the association, the board of directors, and a committee
must be maintained in writing and approved by the members, board, or committee, as applicable. A
vote or abstention from voting on each matter voted upon for each director present at a board meeting
must be recorded in the minutes. The minutes of all meetings of members and of the board of directors
must be maintained, available for inspection, and retained for at least seven years. 142
Effect of the Bill
Voting Requirements and Proxies
The bill provides that a proxy may not be used in the election of board members in general elections or
elections to fill vacancies caused by recall, resignation, or otherwise. Board members must be elected
by written ballot or by voting in person.
Under the bill, elections must be decided by a plurality of the ballots cast. There is no quorum
requirement for an election but at least 20 percent of the eligible voters must cast a ballot for an
election to be valid. A member is prohibited from allowing any other person to cast his or her ballot;
improperly cast ballots are invalid. An election is required only if there are more candidates nominated
than vacancies that exist on the board.
The bill provides that each member or other eligible person wishing to be a candidate for the board of
directors must appear on the ballot in alphabetical order by surname. Ballots may not indicate if a
candidate is an incumbent on the board. Ballots must be uniform in appearance and may not provide a
space for the signature of, or any other means of identifying a vote. If the ballot contains more votes
than vacancies or fewer votes than vacancies, the ballot is invalid unless otherwise stated in the
bylaws. Write-in candidates and more than one vote per candidate per ballot are not allowed.
The bill requires election oversight by an impartial committee responsible for complying with all ballot
requirements. The bill defines "impartial committee" to mean a committee whose members do not
include any of the following people or their spouses:
• Current board members.
• Current association officers.
• Candidates for the association or board.
The bill requires the association bylaws provide a method for determining the winner of an election in
which there is more than one candidate for the same position receiving the same number of votes.
The bill directs the division to adopt procedural rules to govern elections, including, but not limited to,
rules for providing notice by electronic transmission and rules for maintaining secrecy of ballots.
Board of directors' and committee meetings
The bill provides that meetings between the park owner and the board of directors or any of the board's
committees are not subject to the requirement that meetings be open to the association members.
The bill clarifies that notices of all board or committee meetings open to association members must be
posted in a conspicuous place upon the park property at least 48 hours in advance, except in an
emergency.
141 S. 723.078(2)(d), F.S.
142 S. 723.078(2)(e), F.S.
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Member Meetings
The bill changes the date for the meeting at which to nominate candidates to the board of directors to
27, rather than 30, days before the annual meeting. Unless otherwise stated in the bylaws, notices may
be delivered electronically.
Minutes of Meetings
Under the bill, the minutes of board or committee meetings that are closed to members are privileged,
confidential, and not available for inspection or photocopying.
The bill provides that meetings open for members of the board of directors must be maintained in
writing. All minutes of open meetings must be retained within this state for a period of at least five
years, rather than seven years in current law.
Powers and Duties of Homeowners' Associations (Section 27)
Present Situation
The powers of the association include, but are not limited to, the maintenance, management, and
operation of the park property. 143The association must maintain the following items, when applicable,
which constitute the official records of the association: 144
• A copy of the articles of incorporation and each amendment.
• A copy of the bylaws and each amendment.
• A copy of the written rules or policies and each amendment.
• Approved minutes for all meetings of the members, board of directors, and committees of the
board. Records must be retained within this state for at least 7 years.
• A current roster of all members and their mailing address and lot identifications.
• All insurance policies or copies, which must be retained for at least 7 years.
• A copy of all contracts or agreements to which the association is a party. Copies must be
retained for at least 7 years.
• The financial and accounting records, which must be maintained for at least 7 years.
• All other written records that are related to the operation of the association.
The official records must be maintained within the state for at least 7 years and must be made available
to a member for inspection or photocopying within 10 business days after receipt by the board or its
designee of a written request submitted by certified mail, return receipt requested. 145
Failure to provide access to the records creates a rebuttable presumption that the association willfully
failed to comply with this section. A member who is denied access to official records is entitled to the
actual damages or minimum damages for the association's willful failure to comply. Minimum damages
are $10 per day up to 10 days and calculation begins on the 11th business day after receipt of the
written request by certified mail, return receipt requested.
Effect of the Bill
The bill includes the approved minutes of meetings open for members, open for members of the board,
and committees as part of the official association records and changes the length of retention from
seven to five years. The bill specifies that insurance policies and contracts or agreements must be
retained for at least five years after the expiration date of the policy or contract. The bill provides that
financial and accounting records of the association must be maintained within this state for at least five
years, and also specifies that all other written records must be retained within this state for at least five
years or at least five years after the expiration date.
143 S. 723.079(1), F.S.
144 S. 723.079(4)(a)-(i), F.S.
145
S. 723.079(5), F.S.
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The bill requires that the association records be available for inspection by a member within 20
business days. Under the bill, an association member denied access to association records may
recover only $10 per calendar day, not to exceed $100, and the calculation for the damages begins on
the 21st business day after the association receives the written request for records.
The bill provides that a dispute between a member and an association regarding inspecting or
photocopying official records must be submitted to mandatory binding arbitration with the division, and
the arbitration must be conducted pursuant to s. 723.1255, F.S., and procedural rules adopted by the
division.
Alternative Resolution of Recall, Election, and Inspection and Photocopying of Official Records
Disputes (Section 28)
Present Situation
As required by statute, the division adopted rules of procedure governing binding arbitration for recall
proceedings. 146
Effect of the Bill
The bill expands s. 723.1255, F.S., to include disputes between a mobile home owner and a
homeowners' association regarding the election and recall of officers or directors or the inspection and
photocopying of official records. The dispute must be submitted to the division for mandatory binding
arbitration conducted under the statute and the procedural rules adopted by the division.
Each party is responsible for paying its own attorney fees, expert and investigator fees, and associated
costs. The cost of the arbitrator must be divided equally between the parties regardless of the outcome.
The bill clarifies that the division must adopt rules of procedure to govern mandatory binding arbitration
proceedings.
8. SECTION DIRECTORY:
Section 1 Amends s. 125.01055, F.S., relating to county affordable housing.
Section 2 Amends s. 163.31771, F.S., relating to accessory dwelling units.
Section 3 Amends s. 163.31801, F.S., relating to impact fees.
Section 4 Amends s. 166.04151, F.S., relating to municipal affordable housing.
Section 5 Amends s. 320.77, F.S., relating to licenses required for mobile home park dealers.
Section 6 Amends s. 320.771, F.S., relating to licenses required for recreational vehicle dealers.
Section 7 Amends s. 320.822, F.S., relating to definitions pertaining to manufactured homes and
recreational vehicles.
Section 8 Amends s. 320.8232, F.S., relating to uniform standards for used recreational vehicles
and repair and remodeling code for mobile homes.
Section 9 Amends s. 367.022, F.S., relating to water and wastewater system exemptions.
Section 10 Amends s. 420.5087, F.S., relating to the State Apartment Incentive Loan Program.
Section 11 Amends s. 420.5095, F.S., relating to Community Workforce Housing Loan Program.
146 Ch. 61 B-50, F.A.C.
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Section 12 Amends s. 420.531, F.S., relating to Affordable Housing Catalyst Program.
Section 13 Amends s. 420.9073, F.S., relating to local housing distributions.
Section 14 Amends s. 420.9075, F.S., relating to local housing assistance plans.
Section 15 Amends s. 420.9076, F.S., relating to adoption of affordable housing incentive
strategies.
Section 16 Amends s. 723.011, F.S., relating to disclosures prior to renting mobile home lots.
Section 17 Amends s. 723.012, F.S., relating to prospectus or offering circular for mobile home park
property.
Section 18 Amends s. 723.023, F.S., relating to mobile home owner's general obligations.
Section 19 Amends s. 723.031, F.S., relating to mobile home lot rental agreements.
Section 20 Amends s. 723.037, F.S., relating to lot rental increases; reduction in services or utilities;
change in rules and regulations; mediation.
Section 21 Amends s. 723.041, F.S., relating to entrance fees, refunds, exit fee prohibition,
replacement homes for mobile home parks.
Section 22 Amends s. 723.042, F.S., relating to mobile homeowner provision of improvements.
Section 23 Amends s. 723.059, F.S., relating to rights of mobile home purchaser.
Section 24 Amends s. 723.061, F.S., relating to grounds and proceedings for mobile homeowner
evictions.
Section 25 Amends s. 723.076, F.S., relating to incorporation of mobile home park associations.
Section 26 Amends s. 723.078, F.S., relating to mobile home park homeowner association bylaws.
Section 27 Amends s. 723.079, F.S., relating to mobile home park homeowner association powers
and duties.
Section 28 Amends s. 723.1255, F.S., relating to alternative resolution of recall disputes.
Section 29 Reenacts s. 420.507, F.S., relating to powers of the Florida Housing Finance
Corporation, to incorporate the amendment made to s. 420.5087, F.S. in a reference
thereto.
Section 30 Reenacts s. 193.018, F.S., relating to land owned by a community land trust used to
provide affordable housing, to incorporate the amendment made to s. 420.5095, F.S., in
a reference thereto.
Section 31 Provides an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
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2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
Affordable Housing
The Affordable Housing Catalyst Program will incur new costs related to the administration of regional
affordable housing workshops for locally elected officials as specified in sections 13 and 16 of the bill.
According to Florida Housing, based on current activities, webinars cost $2,000 each to conduct and in
person meetings cost $5,250 each. Based on the assumption that the state is divided into six regions,
with two meetings each per year, the cost of the regional workshops would be between $24,000 and
$63,000 depending on whether the method of delivery is in person or by teleconference. 147
The bill requires local governments to adopt an ordinance to allow ADUs in any area zoned for single
family residential use, except in an area of critical state concern where the state caps the number of
new housing units which may be built within a year. This may result in an insignificant negative fiscal
impact on local governments for having to modify current ordinances.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
Section 8 of the bill requires repair and remodeling of mobile and manufactured homes be performed in
accordance with agency rules. Neither the statute being amended, s. 320.8232, F.S., nor the
rulemaking authority of DHSMV under s. 320.011, F.S., provide specific criteria for the rules to be
adopted by DHSMV. The particular statute being interpreted or implemented through rulemaking must
provide specific standards and guidelines to preclude the administrative agency from exercising
147 Florida Housing, 2020 Analysis for HB 1339. On file with Local, Federal & Veterans Affairs Subcommittee.
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unbridled discretion in creating policy or applying the law. 148 A delegation of authority to an
administrative agency by a law that is vague, uncertain, or so broad as to give no notice of what actions
would violate the law, could be invalidated if it allows the agency to make the law. 149 Because of this
constitutional limitation on delegated rulemaking, the Legislature must provide minimal standards and
guidelines in the law creating a program to provide for its proper administration by the assigned
executive agency. The Legislature may delegate rulemaking authority to agencies but not the authority
to determine what should be the law. 150
C. DRAFTING ISSUES OR OTHER COMMENTS:
On line 653, the bill requires that transitional housing "must be constructed on campus." The term
"campus" is undefined in the bill and in the statute being amended. As it is unclear to what the term
"campus" refers, FHFC may not have clear direction for the allocation and use of funds under the terms
in the bill.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On February 3, 2020, the Local, Federal & Veterans Affairs Subcommittee adopted a strike all
amendment and reported the bill favorably as a committee substitute. The strike all amendment made
the following changes:
• Exempts local governments in an area of critical state concern from having to adopt an
ordinance to allow accessory dwelling units in any area zoned for single-family residential use;
• Decreases the applicable sales tax to three percent on the sales price on the sale of new mobile
homes;
• Provides that the owner of a mobile home park operating both as a mobile home park and
subdivision and who provides service within the park and subdivision to a combination of
tenants and lot owners, is exempt from regulation by the Public Service Commission;
• Provides that mobile home owners may be required to install permanent improvements to the
mobile home as disclosed in the prospectus.
• Allows a home buyer to have the option to receive the seller's prospectus or opt for a new
prospectus;
• Requires a mobile home park owner to amend the prospectus when expanding the park to
include new lots and an expansion of more than 15 percent requires increasing facilities or
amenities within a reasonable timeframe;
• Reverts to current law requiring a mobile home park owner to provide an eviction notice by
certified mail;
• Prohibits a mobile home park owner from charging or collecting from mobile home owners any
amount charged for ad valorem taxes or non-ad valorem taxes in excess of the sums remitted
by the park owner to the tax collector;
• Requires a park owner to send the change in use eviction notice to the division and the division
must send the notice to the Florida Mobile Home Relocation Corporation;
• Provides that the homeowners' association must n_otify the park owner in writing by certified
mail, return receipt requested, of the names and addresses of newly elected or appointed
officers or members to the association;
• Reduces the number of years the homeowners' association must retain certain records from
seven to five years;
• Revises homeowners' association bylaws; and
• Revises arbitration proceedings to provide that each party must be responsible for paying its
own attorney fees, expert and investigator fees, and associated costs; and specifies costs of the
arbitrators must be divided equally between the parties regardless of the outcome.
148
Sloban v. Florida Bd. of Pharmacy, 982 So. 2d 26, 29-30 (Fla. 1st DCA 2008); Askew v. Cross Keys Waterways, 372
So. 2d 913, 918-919 (Fla. 1978); Board of Trustees of the Internal Improvement Trust Fund v. Day Cruise Ass'n, 794 So.
2d 696, 704 (Fla. 1st DCA 2001 ).
149 Conner v. Joe Hatton, Inc., 216 So. 2d 209 (Fla.1968).
150 Sarasota County. v. Barg, 302 So. 2d 737 (Fla. 1974).
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On February 19, 2020, the Ways and Means Committee adopted four amendments and reported the
bill favorably as a committee substitute. The amendments made the following changes:
• Removed provisions related to sales tax on mobile homes.
• Removed the waiting period for electing an individual to the board of a mobile home park
homeowners' association if he or she was previously convicted of a felony. The bill previously
disallowed eligibility until more than five years had passed from the date the person's civil rights
were restored.
• Revised criteria used to evaluate applicants for the State Apartment Incentive Loan Program to
specify that sponsors cannot be required to have previously worked with the Florida Housing
Finance Corporation to participate in the program.
• Requires jurisdictions participating in the State Housing Initiatives Partnership Program to
prioritize applicants who need less assistance in an effort to maximize the total number of
applicants who may receive an award.
This analysis is drafted to the committee substitute as approved by the Ways and Means Committee.
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F L O R D A H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/HB 1339 2020
1 A bill to be entitled
2 An act relating to housing; amending s. 125.01055,
3 F.S.; authorizing a board of county commissioners to
4 approve development of affordable housing on any
5 parcel zoned for residential, commercial, or
6 industrial use; amending s. 163.31771, F.S.; revising
7 legislative findings; requiring local governments to
8 adopt ordinances that allow accessory dwelling units
9 in any area zoned for single-family residential use;
10 providing an exception; amending s. 163.31801, F.S.;
11 requiring counties, municipalities, and special
12 districts to include certain data relating to impact
13 fees in their annual financial reports; amending s.
14 166.04151, F.S.; authorizing governing bodies of
15 municipalities to approve the development of
16 affordable housing on any parcel zoned for
17 residential, commercial, or industrial use; amending
18 s. 320.77, F.S.; revising a certification requirement
19 for mobile home dealer applicants relating to the
20 applicant's business location; amending s. 320.771,
21 F.S.; exempting certain recreational vehicle dealer
22 applicants from a garage liability insurance
23 requirement; amending s. 320.822, F.S.; revising the
24 definition of the term "code"; amending s. 320.8232,
25 F.S.; revising applicable standards for the repair and
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26 remodeling of mobile and manufactured homes; amending
27 s. 367.022, F.S.; exempting certain mobile home park
28 owners and mobile home subdivision owners from
29 regulation by the Florida Public Service Commission
30 relating to water and wastewater service; amending s.
31 420.5087, F.S.; revising the criteria used by a review
32 committee when evaluating and selecting specified
33 applications for state apartment incentive loans;
34 amending s. 420.5095, F.S.; renaming the Community
35 Workforce Housing Innovation Pilot Program as the
36 Community Workforce Housing Loan Program; requiring
37 the program to provide workforce housing; revising the
38 definition of the term "workforce housing"; deleting
39 the definition of the term "public-private
40 partnership"; authorizing the Florida Housing Finance
41 Corporation to provide loans under the program to
42 applicants for construction of workforce housing;
43 requiring the corporation to establish a certain loan
44 application process; deleting provisions requiring the
45 corporation to provide incentives for local
46 governments to use certain funds; requiring projects
47 to receive priority consideration for funding under
48 certain circumstances; deleting a provision providing
49 for the expedition of local government comprehensive
50 plan amendments to implement a program project;
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51 requiring that the corporation award loans at a
52 specified interest rate and for a limited term;
53 conforming provisions to changes made by the act;
54 amending s. 420.531, F.S.; specifying that technical
55 support provided to local governments and community-
56 based organizations includes implementation of the
57 State Apartment Incentive Loan Program; requiring the
58 entity providing training and technical assistance to
59 convene and administer biannual regional workshops;
60 requiring such entity to annually compile and submit
61 certain information to the Legislature and the
62 corporation by a specified date; amending s. 420.9073,
63 F.S.; authorizing the corporation to withhold a
64 certain portion of funds distributed from the Local
65 Government Housing Trust Fund to be used for certain
66 transitional housing; prohibiting such funds from
67 being used for specified purposes; requiring the
68 corporation to consult with the Department of Children
69 and Families to create minimum criteria for such
70 housing; providing for the distribution of withheld
71 funds; amending s. 420.9075, F.S.; requiring an
72 optimization plan to be included in local housing
73 assistance plan criteria; revising requirements for
74 reports submitted by counties and certain
75 municipalities to the corporation; amending s.
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76 420.9076, F.S.; revising the membership of local
77 affordable housing advisory committees beginning on a
78 specified date; requiring the committees to perform
79 specified duties annually instead of triennially;
80 requiring locally elected officials serving on
81 advisory committees, or their designees, to attend
82 biannual regional workshops; providing a penalty;
83 amending s. 723.011, F.S.; providing construction
84 relating to rental agreements and tenancies; providing
85 that a mobile home owner may be required to install
86 permanent improvements as disclosed in the mobile home
87 park prospectus; amending s. 723.012, F.S.;
88 authorizing mobile home park owners to make certain
89 prospectus amendments; providing requirements for the
90 amendment; prohibiting certain costs and expenses from
91 being passed on to existing mobile home owners;
92 amending s. 723.023, F.S.; revising general
93 obligations for mobile home owners; amending s.
94 723.031, F.S.; specifying a requirement for disclosing
95 and agreeing to a mobile home lot rental increase;
96 revising construction relating to a park owner's
97 disclosure of certain taxes and assessments; amending
98 s. 723.037, F.S.; authorizing mobile home park owners
99 to give notice of lot rental increases for multiple
100 anniversary dates in one notice; providing
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101 construction; revising a requirement for a lot rental
102 negotiation committee; amending s. 723.041, F.S.;
103 providing that a mobile home park damaged or destroyed
104 due to natural forces may be rebuilt with the same
105 density as previously approved, permitted, and built;
106 providing construction; amending s. 723.042, F.S.;
107 conforming a provision to changes made by the act;
108 amending s. 723.059, F.S.; authorizing certain mobile
109 home purchasers to assume the remainder of a seller's
110 prospectus; authorizing a mobile home park owner to
111 offer a purchaser any approved prospectus; amending s.
112 723.061, F.S.; specifying entities that must be
113 provided with a copy of an eviction notice when
114 received by a mobile home owner; specifying the waiver
115 and nonwaiver of certain rights of a mobile home park
116 owner under certain circumstances; requiring the
117 accounting at final hearing of rents received;
118 amending s. 723.076, F.S.; revising procedures related
119 to the election or appointment of new officers in a
120 homeowner's association; amending s. 723.078, F.S.;
121 revising requirements for board elections and ballots;
122 requiring an impartial committee to be responsible for
123 overseeing the election process and complying with
124 ballot requirements; defining the term "impartial
125 committee"; requiring that association bylaws provide
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126 a method for determining the winner of an election
127 under certain circumstances; requiring the Division of
128 Florida Condominiums, Timeshares, and Mobile Homes to
129 adopt procedural rules; revising the types of meetings
130 that are not required to be open to members; providing
131 an exception to a provision requiring an officer of an
132 association to provide an affidavit affirming certain
133 information; authorizing meeting notices to be
134 provided by electronic means; providing that the
135 minutes of certain board and committee meetings are
136 privileged and confidential; conforming provisions to
137 changes made by the act; amending s. 723.079, F.S.;
138 revising homeowners' association recordkeeping
139 requirements; revising the timeframes for which
140 certain records are required to be retained and be
141 made available for inspection or photocopying; capping
142 the amount of damages for which an association is
143 liable when a member is denied access to official
144 records; requiring that certain disputes be submitted
145 to mandatory binding arbitration with the division;
146 amending s. 723.1255, F.S.; requiring that certain
147 disputes be submitted to mandatory binding arbitration
148 with the division; providing requirements for such
149 arbitration and fees and costs; requiring the division
150 to adopt rules; reenacting s. 420.507 (22) (i), F.S.,
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151 relating to powers of the Florida Housing Finance
152 Corporation, to incorporate the amendment made to s.
153 420.5087, F.S., in a reference thereto; reenacting s.
154 193.018(2), F.S., relating to land owned by a
155 community land trust used to provide affordable
156 housing, to incorporate the amendment made to s.
157 420.5095, F.S., in a reference thereto; providing an
158 effective date.
159
160 Be It Enacted by the Legislature of the State of Florida:
161
162 Section 1. Subsection (4) is added to section 125.01055,
163 Florida Statutes, to read:
164 125.01055 Affordable housing.-
165 (4) Notwithstanding any other law, local ordinance, or
166 regulation to the contrary, the board of county commissioners
167 may approve the development of housing that is affordable, as
168 defined ins. 420.0004, on any parcel zoned for residential,
169 commercial, or industrial use.
170 Section 2. Subsections ( 1) , ( 3) , and ( 4) of section
171 163.31771, Florida Statutes, are amended to read:
172 163.31771 Accessory dwelling units.-
173 (1) The Legislature finds that the median price of homes
174 in this state has increased steadily over the last decade and at
175 a greater rate of increase than the median income in many urban
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176 areas. The Legislature finds that the cost of rental housing has
177 also increased steadily and the cost often exceeds an amount
178 that is affordable to extremely-low-income, very-low-income,
179 low-income, or moderate-income persons and has resulted in a
180 critical shortage of affordable rentals in many urban areas in
181 the state. This shortage of affordable rentals constitutes a
182 threat to the health, safety, and welfare of the residents of
183 the state. Therefore, the Legislature finds that it serves an
184 important public purpose to require encourage the permitting of
185 accessory dwelling units in single-family residential areas in
186 order to increase the availability of affordable rentals for
187 extremely-low-income, very-low-income, low-income, or moderate-
188 income persons.
189 (3) Each Upon a finding by a local government that there
190 is a shortage of affordable rentals within its jurisdiction, the
191 local government shall may adopt an ordinance to allow accessory
192 dwelling units in any area zoned for single-family residential
193 use, except in an area of critical state concern where the state
194 caps the number of new housing units which may be built within a
195 year.
196 ( 4) If the local govermRent adopts an ordinance under this
197 section, An application for a building permit to construct an
198 accessory dwelling unit must include an affidavit from the
199 applicant which attests that the unit will be rented at an
200 affordable rate to an extremely-low-income, very-low-income,
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201 low-income, or moderate-income person or persons.
202 Section 3. Subsection (10) is added to section 163.31801,
203 Florida Statutes, to read:
204 163.31801 Impact fees; short title; intent; minimum
205 requirements; audits; challenges.-
206 (10) In addition to the items that must be reported in the
207 annual financial reports under s. 218.32, each county,
208 municipality, and special district must report all of the
209 following data on each impact fee charged:
210 (a) The specific purpose of the impact fee, including the
211 specific infrastructure needs to be met such as transportation,
212 parks, water, sewer, and schools.
213 (b) The impact fee schedule policy describing the method
214 of calculating impact fees, such as flat fees, tiered fees based
215 on the number of bedrooms, or tiered fees based on the square
216 footage.
217 (c) The amount assessed for each purpose and for each type
218 of dwelling.
219 (d) The total amount of impact fees charged by type of
220 dwelling.
221 Section 4. Subsection (4) is added to section 166.04151,
222 Florida Statutes, to read:
223 166.04151 Affordable housing.-
224 (4) Notwithstanding any other law, local ordinance, or
225 regulation to the contrary, the governing body of a municipality
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226 may approve the development of housing that is affordable, as
227 defined ins. 420.0004, on any parcel zoned for residential,
228 commercial, or industrial use.
229 Section 5. Paragraph (h) of subsection (3) of section
230 320.77, Florida Statutes, is amended to read:
231 320.77 License required of mobile home dealers.-
232 (3) APPLICATION.-The application for such license shall be
233 in the form prescribed by the department and subject to such
234 rules as may be prescribed by it. The application shall be
235 verified by oath or affirmation and shall contain:
236 (h) Certification by the applicant~
237 1. That the location is a permanent one, not a tent or a
238 temporary stand or other temporary quarters~; and,
239 2. Except in the case of a mobile home broker, that the
240 location affords sufficient unoccupied space to display store
241 all mobile homes offered and displayed for sale. A space to
242 display a manufactured home as a model home satisfies this
243 requirement.; and that The location must be -i-& a suitable place
244 in which the applicant can in good faith carry on business and
245 keep and maintain books, records, and files necessary to conduct
246 such business, which must w-i-±-±- be available at all reasonable
247 hours to inspection by the department or any of its inspectors
248 or other employees.
249
250 This paragraph does subsection shall not preclude a licensed
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251 mobile home dealer from displaying and offering for sale mobile
252 homes in a mobile home park.
253
254 The department shall, if it deems necessary, cause an
255 investigation to be made to ascertain if the facts set forth in
256 the application are true and shall not issue a license to the
257 applicant until it is satisfied that the facts set forth in the
258 application are true.
259 Section 6. Paragraph (j) of subsection (3) of section
260 320.771, Florida Statutes, is amended to read:
261 320.771 License required of recreational vehicle dealers.-
262 (3) APPLICATION.-The application for such license shall be
263 in the form prescribed by the department and subject to such
264 rules as may be prescribed by it. The application shall be
265 verified by oath or affirmation and shall contain:
266 (j) A statement that the applicant is insured under a
267 garage liability insurance policy, which shall include, at a
268 minimum, $25,000 combined single-limit liability coverage,
269 including bodily injury and property damage protection, and
270 $10,000 personal injury protection, if the applicant is to be
271 licensed as a dealer in, or intends to sell, recreational
272 vehicles. However, a garage liability policy is not required for
273 the licensure of a mobile home dealer who sells only park
274 trailers.
275
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276 The department shall, if it deems necessary, cause an
277 investigation to be made to ascertain if the facts set forth in
278 the application are true and shall not issue a license to the
279 applicant until it is satisfied that the facts set forth in the
280 application are true.
281 Section 7. Paragraph (c) of subsection (2) of section
282 320.822, Florida Statutes, is amended to read:
283 320.822 Definitions; ss. 320.822-320.862.-In construing
284 ss. 320.822-320.862, unless the context otherwise requires, the
285 following words or phrases have the following meanings:
286 (2) "Code" means the appropriate standards found in:
287 (c) The Mobile and Manufactured Home Repair and Remodeling
288 Code and the Used Recreational Vehicle Code.
289 Section 8. Subsection (2) of section 320.8232, Florida
290 Statutes, is amended to read:
291 320.8232 Establishment of uniform standards for used
292 recreational vehicles and repair and remodeling code for mobile
293 homes.-
294 (2) The Mobile and Manufactured Home provisions of the
295 Repair and Remodeling Code must be a uniform code, must shall
296 ensure safe and livable housing~ and may shall not be more
297 stringent than those standards required to be met in the
298 manufacture of mobile homes. Such code must provisions shall
299 include, but not be limited to, standards for structural
300 adequacy, plumbing, heating, electrical systems, and fire and
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301 life safety. All repairs and remodeling of mobile and
302 manufactured homes must be performed in accordance with
303 department rules.
304 Section 9. Subsection (9) of section 367.022, Florida
305 Statutes, is amended, and subsection (14) is added to that
306 section, to read:
307 367.022 Exemptions.-The following are not subject to
308 regulation by the commission as a utility nor are they subject
309 to the provisions of this chapter, except as expressly provided:
310 (9) Any person who resells water service to his or her
311 tenants or to individually metered residents for a fee that does
312 not exceed the actual purchase price of the water and wastewater
313 service plus the actual cost of meter reading and billing, not
314 to exceed 9 percent of the actual cost of service.
315 (14) The owner of a mobile home park operating both as a
316 mobile home park and a mobile home subdivision, as those terms
317 are defined ins. 723.003, who provides service within the park
318 and subdivision to a combination of both tenants and lot owners,
319 provided that the service to tenants is without specific
320 compensation.
321 Section 10. Paragraph (c) of subsection (6) of section
322 420.5087, Florida Statutes, is amended to read:
323 420.5087 State Apartment Incentive Loan Program.-There is
324 hereby created the State Apartment Incentive Loan Program for
325 the purpose of providing first, second, or other subordinated
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326 mortgage loans or loan guarantees to sponsors, including for-
327 profit, nonprofit, and public entities, to provide housing
328 affordable to very-low-income persons.
329 (6) On all state apartment incentive loans, except loans
330 made to housing communities for the elderly to provide for
331 lifesafety, building preservation, health, sanitation, or
332 security-related repairs or improvements, the following
333 provisions shall apply:
334 (c) The corporation shall provide by rule for the
335 establishment of a review committee for the competitive
336 evaluation and selection of applications submitted in this
337 program. The review committee must use evaluation criteria that
338 include, including, but are not limited to, the following
339 criteria:
340 1. Tenant income and demographic targeting objectives of
341 the corporation.
342 2. Targeting objectives of the corporation which will
343 ensure an equitable distribution of loans between rural and
344 urban areas.
345 3. Sponsor's agreement to reserve the units for persons or
346 families who have incomes below 50 percent of the state or local
347 median income, whichever is higher, for a time period that
348 exceeds the minimum required by federal law or this part.
349 4. Sponsor's agreement to reserve more than:
350 a. Twenty percent of the units in the project for persons
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351 or families who have incomes that do not exceed 50 percent of
352 the state or local median income, whichever is higher; or
353 b. Forty percent of the units in the project for persons
354 or families who have incomes that do not exceed 60 percent of
355 the state or local median income, whichever is higher, without
356 requiring a greater amount of the loans as provided in this
357 section.
358 5. Provision for tenant counseling.
359 6. Sponsor's agreement to accept rental assistance
360 certificates or vouchers as payment for rent.
361 7. Projects requiring the least amount of a state
362 apartment incentive loan compared to overall project cost,
363 except that the share of the loan attributable to units serving
364 extremely-low-income persons must be excluded from this
365 requirement.
366 8. Local government contributions and local government
367 comprehensive planning and activities that promote affordable
368 housing and policies that promote access to public
369 transportation, reduce the need for onsite parking, and expedite
370 permits for affordable housing projects.
371 9. Project feasibility.
372 10. Economic viability of the project.
373 11. Commitment of first mortgage financing.
374 12. Sponsor's prior experience. This criterion may not
375 require a sponsor to have prior experience with the corporation
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376 to qualify for financing under the program.
377 13. Sponsor's ability to proceed with construction.
378 14. Projects that directly implement or assist welfare-to-
379 work transitioning.
380 15. Projects that reserve units for extremely-low-income
381 persons.
382 16. Projects that include green building principles,
383 storm-resistant construction, or other elements that reduce
384 long-term costs relating to maintenance, utilities, or
385 insurance.
386 17. Job-creation rate of the developer and general
387 contractor, as provided ins. 420.507(47).
388 Section 11. Section 420.5095, Florida Statutes, is amended
389 to read:
390 420.5095 Community Workforce Housing Loan Innovation Pilot
391 Program.-
392 (1) The Legislature finds and declares that recent rapid
393 increases in the median purchase price of a home and the cost of
394 rental housing have far outstripped the increases in median
395 income in the state, preventing essential services personnel
396 from living in the cofflfflunities where they serve and thereby
397 creating the need for innovative solutions for the provision of
398 housing opportunities for essential services personnel.
399 (2) The Community Workforce Housing Loan Innovation Pilot
400 Program is created to provide affordable rental and home
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401 ownership coffiffiunity workforce housing for persons essential
402 services personnel affected by the high cost of housing, using
403 regulatory incentives and state and local funds to promote local
404 public private partnerships and leverage government and private
405 resources.
406 (3) For purposes of this section, the term+
407 +a+- "workforce housing" means housing affordable to
408 natural persons or families whose total annual household income
409 does not exceed 80 -±-4-G- percent of the area median income,
410 adjusted for household size, or 120 -±-§-G. percent of area median
411 income, adjusted for household size, in areas of critical state
412 concern designated under s. 380.05, for which the Legislature
413 has declared its intent to provide affordable housing, and areas
414 that were designated as areas of critical state concern for at
415 least 20 consecutive years before prior to removal of the
416 designation.
417 (b) "Public private partnership" means any form of
418 business entity that includes substantial involvement of at
419 least one county, one municipality, or one public sector entity,
420 such as a school district or other unit of local government in
421 which the project is to be located, and at least one private
422 sector for profit or not for profit business or charitable
423 entity, and may be any form of business entity, including a
424 joint venture or contractual agreement.
425 (4) The Florida Housing Finance Corporation may ±--a-
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426 authori;;i:ed to provide loans under the Cofflffl:unity Workforce
427 Housing Innovation Pilot program loans to applicants aft
428 applicant for construction or rehabilitation of workforce
429 housing in eligible areas. This funding is intended to be used
430 with other public and private sector resources.
431 (5) The corporation shall establish a loan application
432 process under s. 420.5087 by rule which includes selection
433 criteria, an application review process, and a funding process.
434 The corporation shall also establish an application review
435 cofflfflittee that may include up to three private citi;;i:ens
436 representing the areas of housing or real estate development,
437 banking, cofflffl:unity planning, or other areas related to the
438 development or financing of workforce and affordable housing.
439 (a) The selection criteria and application review process
440 must include a procedure for curing errors in the loan
441 applications which do not make a substantial change to the
442 proposed project.
443 (b) To achieve the goals of the pilot program, the
444 application review cofflfflittee may approve or reject loan
445 applications or responses to questions raised during the review
446 of an application due to the insufficiency of information
447 provided.
448 (c) The application review cofflfflittee shall make
449 recofflfflendations concerning program participation and funding to
450 the corporation's board of directors.
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451 (d) The board of directors shall approve or reject loan
452 applications, determine the tentative loan amount available to
453 each applicant, and rank all approved applications.
454 (e) The board of directors shall decide which approved
455 applicants will become program participants and determine the
456 manimum loan amount for each program participant.
457 (6) The corporation shall provide incentives for local
458 governments in eligible areas to use local affordable housing
459 funds, such as those from the State Housing Initiatives
460 Partnership Program, to assist in meeting the affordable housing
461 needs of persons eligible under this program. Local governIBents
462 are authorized to use State Housing Initiative Partnership
463 Program funds for persons or families whose total annual
464 household income does not enceed:
465 (a) One hundred and forty percent of the area median
466 income, adjusted for household size; or
467 (b) One hundred and fifty percent of the area median
468 income, adjusted for household size, in areas that were
469 designated as areas of critical state concern for at least 20
470 consecutive years prior to the removal of the designation and in
471 areas of critical state concern, designated under s. 380.05, for
472 which the Legislature has declared its intent to provide
473 affordable housing.
474 (7) Funding shall be targeted to innovative projects in
475 areas where the disparity between the area median income and the
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476 mediafi sales price for a siRgle family home is greatest, afid
477 where populatiofi growth as a percefitage rate of iRcrease is
478 greatest. The corporatiofi may also fufid projects ifi areas where
479 iRRovative regulatory afid fifiaficial iRceRtives are made
480 available. The corporatiofi shall fufid at least Ofie eligible
481 project ifi as mafiy coufities and regions of the state as is
482 practicable, consistent with program goals.
483 J...§l-f-8+ Projects must be given shall receive priority
484 consideration for funding if where:
485 (a) The local jurisdiction has adopted, or is committed to
486 adopting, appropriate regulatory incentives, or the local
487 jurisdiction or public private partnership has adopted or is
488 committed to adopting local contributions or financial
489 strategies, or other funding sources to promote the development
490 and ongoing financial viability of such projects. Local
491 incentives include such actions as expediting review of
492 development orders and permits, supporting development near
493 transportation hubs and major employment centers, and adopting
494 land development regulations designed to allow flexibility in
495 densities, use of accessory units, mixed-use developments, and
496 flexible lot configurations. Financial strategies include such
497 actions as promoting employer-assisted housing programs,
498 providing tax increment financing, and providing land.
499 (b) Projects are innovative and include new construction
500 or rehabilitation; mi1ced income housing; commercial and housing
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501 miKed use elements; innovative design; green building
502 principles; storm resistant construction; or other elements that
503 reduce long term costs relating to maintenance, utilities, or
504 insurance and promote homeownership. The program funding may not
505 e}{Ceed the costs attributable to the portion of the project that
506 is set aside to provide housing for the targeted population.
507 ~-te+- The projects th-a-t- set aside at least 50 at least 80
508 percent of the units for workforce housing and at least 50
509 percent for essential services personnel and for projects that
510 require the least amount of program funding compared to the
511 overall housing costs for the project.
512 (9) Hotwithstanding s. 163.3184 (4) (b) (d), any local
513 government comprehensive plan amendfflent to implement a Coffiffiunity
514 Workforce Housing Innovation Pilot Program project found
515 consistent with this section shall be e}{pedited as provided in
516 this subsection. At least 30 days prior to adopting a plan
517 amendraent under this subsection, the local government shall
518 notify the state land planning agency of its intent to adopt
519 such an amendffient, and the notice shall include its evaluation
520 related to site suitability and availability of facilities and
521 services. The public notice of the hearing required bys.
522 163.3184(11) (b)2. shall include a statement that the local
523 government intends to use the e}{pedited adoption process
524 authorized by this subsection. Such amendments shall require
525 only a single public hearing before the governing board, which
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526 shall be an adoption hearing as described in s. 163.318q (q) (e).
527 Any further proceedings shall be governed bys. 163.318q(§)
528 ( 13) .
529 (10) The processing of approvals of development orders or
530 development permits, as defined ins. 163.316q, for innovative
531 coffiffiunity workforce housing projects shall be eupedited.
532 J..21-H:-±+ The corporation shall award loans w i t h ~
533 interest rates set at 1 to 3 percent interest rate for a term
534 that does not exceed 15 years, which may be made forgivable \ihen
535 long term affordability is provided and when at least 80 percent
536 of the units are set aside for worl(force housing and at least 50
537 percent of the units are set aside for essential services
538 personnel.
539 (12) All eligible applications shall:
540 (a) For home ownership, limit the sales price of a
541 detached unit, townhome, or condominium unit to not more than 90
542 percent of the median sales price for that type of unit in that
543 county, or the statewide median sales price for that type of
544 unit, whichever is higher, and require that all eligible
545 purchasers of home ownership units occupy the homes as their
546 primary residence.
547 (b) For rental units, restrict rents for all workforce
548 housing serving those with incomes at or below 120 percent of
549 area median income at the appropriate income level using the
550 restricted rents for the federal low incoffie housing tau credit
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551 program and, for workforce housing units serving those with
552 incomes above 120 percent of area median income, restrict rents
553 to those established by the corporation, not to eHceed 30
554 percent of the maHimum household income adjusted to unit si~e.
555 (c) Demonstrate that the applicant is a public private
556 partnership in an agreement, contract, partnership agreement,
557 memorandum of understanding, or other written instrument signed
558 by all the project partners.
559 (d) Have grants, donations of land, or contributions from
560 the public private partnership or other sources collectively
561 totaling at least 10 percent of the total development cost or $2
562 million, whichever is less. Such grants, donations of land, or
563 contributions must be evidenced by a letter of commitment,
564 agreement, contract, deed, memorandum of understanding, or other
565 written instrument at the time of application. Grants, donations
566 of land, or contributions in eucess of 10 percent of the
567 development cost shall increase the application score.
568 (e) Demonstrate how the applicant will use the regulatory
569 incentives and financial strategies outlined in subsection (8)
570 from the local jurisdiction in which the proposed project is to
571 be located. The corporation may consult with the Department of
572 Economic Opportunity in evaluating the use of regulatory
573 incentives by applicants.
574 (f) Demonstrate that the applicant possesses title to or
575 site control of land and evidences availability of required
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576 infrastructure.
577 (g) Demonstrate the applicant's affordable housing
578 development and FRanagemcnt euperience.
579 (h) Provide any research or facts available supporting the
580 deFRand and need for rental or hoFRe ownership worlcforce housing
581 for eligible persons in the FRarket in which the project is
582 proposed.
583 (13) Projects may include FRanufactured housing constructed
584 after June 1994 and installed in accordance with FRobile hoFRe
585 installation standards of the DepartFRent of Highway Safety and
586 Heter Vehicles.
587 ~-f-14+- The corporation may adopt rules pursuant toss.
588 120.536(1) and 120.54 to implement this section.
589 ( 15) The corporation may use a FRGJciFfl:Uffi of 2 percent of the
590 annual program appropriation for adfflinistration and compliance
591 FRonitoring.
592 (16) The corporation shall review the success of the Coffiffiunity
593 Workforce Housing Innovation Pilot PrograFR to ascertain whether
594 the projects financed by the prograFR are useful in FReeting the
595 housing needs of eligible areas and shall include its findings
596 in the annual report required under s. 420.511(3).
597 Section 12. Section 420.531, Florida Statutes, is amended
598 to read:
599 420.531 Affordable Housing Catalyst Program.-
600 J..ll The corporation shall operate the Affordable Housing
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601 Catalyst Program for the purpose of securing the expertise
602 necessary to provide specialized technical support to local
603 governments and community-based organizations to implement the
604 HOME Investment Partnership Program, State Apartment Incentive
605 Loan Program, State Housing Initiatives Partnership Program, and
606 other affordable housing programs. To the maximum extent
607 feasible, the entity to provide the necessary expertise must be
608 recognized by the Internal Revenue Service as a nonprofit tax-
609 exempt organization. It must have as its primary mission the
610 provision of affordable housing training and technical
611 assistance, an ability to provide training and technical
612 assistance statewide, and a proven track record of successfully
613 providing training and technical assistance under the Affordable
614 Housing Catalyst Program. The technical support shall, at a
615 minimum, include training relating to the following key elements
616 of the partnership programs:
617 ~-H:-+- Formation of local and regional housing
618 partnerships as a means of bringing together resources to
619 provide affordable housing.
620 l.el_-f-2+ Implementation of regulatory reforms to reduce the
621 risk and cost of developing affordable housing.
622 l.£1-t-3+ Implementation of affordable housing programs
623 included in local government comprehensive plans.
624 ~+4+ Compliance with requirements of federally funded
625 housing programs.
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626 (2) In consultation with the corporation, the entity
627 providing statewide training and technical assistance shall
628 convene and administer biannual regional workshops for the
629 locally elected officials serving on affordable housing advisory
630 committees as provided ins. 420.9076. The regional workshops
631 may be conducted through teleconferencing or other technological
632 means and must include processes and programming that facilitate
633 peer-to-peer identification and sharing of best affordable
634 housing practices among the locally elected officials. Annually,
635 the entity providing statewide training and technical assistance
636 must compile calendar year reports summarizing the
637 deliberations, actions, and recommendations of each region, as
638 well as the attendance records of locally elected officials, and
639 must submit such reports to the President of the Senate, the
640 Speaker of the House of Representatives, and the corporation by
641 March 31 of the following year.
642 Section 13. Subsection (7) of section 420.9073, Florida
643 Statutes, is renumbered as subsection (8), and a new subsection
644 (7) is added to that section to read:
645 420.9073 Local housing distributions.-
646 (7) Notwithstanding subsections (1)-(4), the corporation
647 may withhold up to 5 percent of the total amount distributed
648 each fiscal year from the Local Government Housing Trust Fund to
649 provide additional funding to counties and eligible
650 municipalities for the construction of transitional housing for
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651 persons aging out of foster care. Funds may not be used for the
652 design or planning of transitional housing and the housing must
653 be constructed on campus. The corporation must consult with the
654 Department of Children and Families to create minimum criteria
655 for such housing. Any portion of the withheld funds not
656 distributed or committed by the end of the fiscal year shall be
657 distributed as provided in subsections (1) and (2).
658 Section 14. Paragraph (a) of subsection (4) of section
659 420.9075, Florida Statutes, is amended, and paragraph (j) is
660 added to subsection (10) of that section, to read:
661 420.9075 Local housing assistance plans; partnerships.-
662 (4) Each local housing assistance plan is governed by the
663 following criteria and administrative procedures:
664 (a) Each county, eligible municipality, or entity formed
665 through interlocal agreement to participate in the State Housing
666 Initiatives Partnership Program must develop a qualification
667 system and selection criteria for applications for awards by
668 eligible sponsors, adopt criteria for the selection of eligible
669 persons, and adopt a maximum award schedule or system of amounts
670 consistent with the intent and budget of its local housing
671 assistance plan, with ss. 420.907-420.9079, and with corporation
672 rule. The selection criteria must provide priority to applicants
673 who need less assistance so as to maximize the total number of
674 applicants who may receive an award under the program.
675 (10) Each county or eligible municipality shall submit to
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676 the corporation by September 15 of each year a report of its
677 affordable housing programs and accomplishments through June 30
678 immediately preceding submittal of the report. The report shall
679 be certified as accurate and complete by the local government's
680 chief elected official or his or her designee. Transmittal of
681 the annual report by a county's or eligible municipality's chief
682 elected official, or his or her designee, certifies that the
683 local housing incentive strategies, or, if applicable, the local
684 housing incentive plan, have been implemented or are in the
685 process of being implemented pursuant to the adopted schedule
686 for implementation. The report must include, but is not limited
687 to:
688 (j) The number of affordable housing applications that
689 were submitted, the number of such applications that were
690 approved, and the number of such applications that were denied.
691 Section 15. Subsections (2) and (4) of section 420.9076,
692 Florida Statutes, are amended, and subsection (10) is added to
693 that section, to read:
694 420.9076 Adoption of affordable housing incentive
695 strategies; committees.-
696 (2) The governing board of a county or municipality shall
697 appoint the members of the affordable housing advisory
698 committee. Pursuant to the terms of any interlocal agreement, a
699 county and municipality may create and jointly appoint an
700 advisory committee. The local action adopted pursuant to s.
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701 420.9072 which creates the advisory committee and appoints the
702 advisory committee members must name at least 8 but not more
703 than 11 committee members and specify their terms. Effective
704 October 1, 2020, the committee must consist of one locally
705 elected official from each county or municipality participating
706 in the State Housing Initiatives Partnership Program and one
707 representative from at least six of the categories below:
708 (a) A citizen who is actively engaged in the residential
709 home building industry in connection with affordable housing.
710 (b) A citizen who is actively engaged in the banking or
711 mortgage banking industry in connection with affordable housing.
712 (c) A citizen who is a representative of those areas of
713 labor actively engaged in home building in connection with
714 affordable housing.
715 (d) A citizen who is actively engaged as an advocate for
716 low-income persons in connection with affordable housing.
717 (e) A citizen who is actively engaged as a for-profit
718 provider of affordable housing.
719 (f) A citizen who is actively engaged as a not-for-profit
720 provider of affordable housing.
721 (g) A citizen who is actively engaged as a real estate
722 professional in connection with affordable housing.
723 (h) A citizen who actively serves on the local planning
724 agency pursuant to s. 163.3174. If the local planning agency is
725 comprised of the governing board of the county or municipality,
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726 the governing board may appoint a designee who is knowledgeable
727 in the local planning process.
728 (i) A citizen who resides within the jurisdiction of the
729 local governing body making the appointments.
730 (j) A citizen who represents employers within the
731 jurisdiction.
732 (k) A citizen who represents essential services personnel,
733 as defined in the local housing assistance plan.
734 (4) Annually Triennially, the advisory committee shall
735 review the established policies and procedures, ordinances, land
736 development regulations, and adopted local government
737 comprehensive plan of the appointing local government and shall
738 recommend specific actions or initiatives to encourage or
739 facilitate affordable housing while protecting the ability of
740 the property to appreciate in value. The recommendations may
741 include the modification or repeal of existing policies,
742 procedures, ordinances, regulations, or plan provisions; the
743 creation of exceptions applicable to affordable housing; or the
744 adoption of new policies, procedures, regulations, ordinances,
745 or plan provisions, including recommendations to amend the local
746 government comprehensive plan and corresponding regulations,
747 ordinances, and other policies. At a minimum, each advisory
748 committee shall submit an annual a report to the local governing
749 body and to the entity providing statewide training and
750 technical assistance for the Affordable Housing Catalyst Program
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751 which tfta-t- includes recommendations on, and triennially
752 thereafter evaluates the implementation of7 affordable housing
753 incentives in the following areas:
754 (a) The processing of approvals of development orders or
755 permits for affordable housing projects is expedited to a
756 greater degree than other projects, as provided ins.
757 163.3177(6) (f)3.
758 (b) All allowable fee waivers provided The modification of
759 impact fee requirements, including reduction or waiver of fees
760 and alternative methods of fee payment for the development or
761 construction of affordable housing.
762 (c) The allowance of flexibility in densities for
763 affordable housing.
764 (d) The reservation of infrastructure capacity for housing
765 for very-low-income persons, low-income persons, and moderate-
766 income persons.
767 (e) The allowance of Affordable accessory residential
768 units in residential zoning districts.
769 (f) The reduction of parking and setback requirements for
770 affordable housing.
771 (g) The allowance of flexible lot configurations,
772 including zero-lot-line configurations for affordable housing.
773 (h) The modification of street requirements for affordable
774 housing.
775 (i) The establishment of a process by which a local
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776 government considers, before adoption, policies, procedures,
777 ordinances, regulations, or plan provisions that increase the
778 cost of housing.
779 (j) The preparation of a printed inventory of locally
780 owned public lands suitable for affordable housing.
781 (k) The support of development near transportation hubs
782 and major employment centers and mixed-use developments.
783
784 The advisory committee recommendations may also include other
785 affordable housing incentives identified by the advisory
786 committee. Local governments that receive the minimum allocation
787 under the State Housing Initiatives Partnership Program shall
788 perform an -Hre initial review but may elect to not perform the
789 annual triennial review.
790 (10) The locally elected official serving on an advisory
791 committee, or a locally elected designee, must attend biannual
792 regional workshops convened and administered under the
793 Affordable Housing Catalyst Program as provided ins.
794 420.531(2). If the locally elected official or locally elected
795 designee fails to attend three consecutive regional workshops,
796 the corporation may withhold funds pending the person's
797 attendance at the next regularly scheduled biannual meeting.
798 Section 16. Subsection (4) of section 723.011, Florida
799 Statutes, is amended to read:
800 723.011 Disclosure prior to rental of a mobile home lot;
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801 prospectus, filing, approval.-
802 (4) With regard to a tenancy in existence on the effective
803 date of this chapter, the prospectus or offering circular
804 offered by the mobile home park owner must shall contain the
805 same terms and conditions as rental agreements offered to all
806 other mobile home owners residing in the park on the effective
807 date of this act, excepting only rent variations based upon lot
808 location and size, and may shall not require any mobile home
809 owner to install any permanent improvements, except that the
810 mobile home owner may be required to install permanent
811 improvements to the mobile home as disclosed in the prospectus.
812 Section 17. Subsection (5) of section 723.012, Florida
813 Statutes, is amended to read:
814 723.012 Prospectus or offering circular.-The prospectus or
815 offering circular, which is required to be provided bys.
816 723.011, must contain the following information:
817 (5) A description of the recreational and other common
818 facilities, if any, that will be used by the mobile home owners,
819 including, but not limited to:
820 (a) The number of buildings and each room thereof and its
821 intended purposes, location, approximate floor area, and
822 capacity in numbers of people.
823 (b) Each swimming pool, as to its general location,
824 approximate size and depths, and approximate deck size and
825 capacity and whether heated.
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826 (c) All other facilities and permanent improvements that
827 which will serve the mobile home owners.
828 (d) A general description of the items of personal
829 property available for use by the mobile home owners.
830 (e) A general description of the days and hours that
831 facilities will be available for use.
832 (f) A statement as to whether all improvements are
833 complete and, if not, their estimated completion dates.
834
835 If a mobile home park owner intends to include additional
836 property and mobile home lots and to increase the number of lots
837 that will use the shared facilities of the park, the mobile home
838 park owner must amend the prospectus to disclose such additions.
839 If the number of mobile home lots in the park increases by more
840 than 15 percent of the total number of lots in the original
841 prospectus, the mobile home park owner must reasonably offset
842 the impact of the additional lots by increasing the shared
843 facilities. The amendment to the prospectus must include a
844 reasonable timeframe for providing the required additional
845 shared facilities. The costs and expenses necessary to increase
846 the shared facilities may not be passed on or passed through to
847 the existing mobile home owners.
848 Section 18. Section 723.023, Florida Statutes, is amended
849 to read:
850 723.023 Mobile home owner's general obligations.-A mobile
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851 home owner shall at all times:
852 (1) At all times comply with all obligations imposed on
853 mobile home owners by applicable provisions of building,
854 housing, and health codes, including compliance with all
855 building permits and construction requirements for construction
856 on the mobile home and lot. The home owner is responsible for
857 all fines imposed by the local government for noncompliance with
858 any local codes.
859 (2) At all times keep the mobile home lot that which he or
860 she occupies clean, neat, and sanitary, and maintained in
861 compliance with all local codes.
862 (3) At all times comply with properly promulgated park
863 rules and regulations and require other persons on the premises
864 with his or her consent to comply with such rules and to conduct
865 themselves, and other persons on the premises with his or her
866 consent, in a manner that does not unreasonably disturb other
867 residents of the park or constitute a breach of the peace.
868 (4) Receive written approval from the mobile home park
869 owner before making any exterior modification or addition to the
870 home.
871 (5) When vacating the premises, remove any debris and
872 other property of any kind which is left on the mobile home lot.
873 Section 19. Subsection (5) of section 723.031, Florida
874 Statutes, is amended to read:
875 723.031 Mobile home lot rental agreements.-
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876 (5) The rental agreement must shall contain the lot rental
877 amount and services included. An increase in lot rental amount
878 upon expiration of the term of the lot rental agreement must
879 shall be in accordance with ss. 723.033 and 723.037 ors.
880 723.059(4), whichever is applicable~T provided that, pursuant to
881 s. 723.059(4), the amount of the lot rental increase is
882 disclosed and agreed to by the purchaser, in writing. An
883 increase in lot rental amount shall not be arbitrary or
884 discriminatory between similarly situated tenants in the park. A
885 lot rental amount may not be increased during the term of the
886 lot rental agreement, except:
887 (a) When the manner of the increase is disclosed in a lot
888 rental agreement with a term exceeding 12 months and which
889 provides for such increases not more frequently than annually.
890 (b) For pass-through charges as defined ins. 723.003.
891 (c) That a charge may not be collected which results in
892 payment of money for sums previously collected as part of the
893 lot rental amount. The provisions hereof notwithstanding, the
894 mobile home park owner may pass on, at any time during the term
895 of the lot rental agreement, ad valorem property taxes, non-ad
896 valorem assessments, and utility charges, or increases of
897 either, provided that the ad valorem property taxes, non-ad
898 valorem assessments, and utility charges are not otherwise being
899 collected in the remainder of the lot rental amount and provided
900 further that the passing on of such ad valorem taxes, non-ad
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901 valorem assessments, or utility charges, or increases of either,
902 was disclosed prior to tenancy, was being passed on as a matter
903 of custom between the mobile home park owner and the mobile home
904 owner, or such passing on was authorized by law. A park owner is
905 deemed to have disclosed the passing on of ad valorem property
906 taxes and non-ad valorem assessments if ad valorem property
907 taxes or non-ad valorem assessments were disclosed as a separate
908 charge or a factor for increasing the lot rental amount in the
909 prospectus or rental agreement. Such ad valorem taxes, non-ad
910 valorem assessments, and utility charges shall be a part of the
911 lot rental amount as defined by this chapter. The term "non-ad
912 valorem assessments" has the same meaning as provided ins.
913 197. 3 632 ( 1) ( d) . Other provisions of this chapter
914 notwithstanding, pass-on charges may be passed on only within 1
915 year of the date a mobile home park owner remits payment of the
916 charge. A mobile home park owner is prohibited from passing on
917 any fine, interest, fee, or increase in a charge resulting from
918 a park owner's payment of the charge after the date such charges
919 become delinquent. A mobile home park owner is prohibited from
920 charging or collecting from the mobile home owners any sum for
921 ad valorem taxes or non-ad valorem tax charges in an amount in
922 excess of the sums remitted by the park owner to the tax
923 collector. Nothing herein shall prohibit a park owner and a
924 homeowner from mutually agreeing to an alternative manner of
925 payment to the park owner of the charges.
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926 (d) If a notice of increase in lot rental amount is not
927 given 90 days before the renewal date of the rental agreement,
928 the rental agreement must remain under the same terms until a
929 90-day notice of increase in lot rental amount is given. The
930 notice may provide for a rental term shorter than 1 year in
931 order to maintain the same renewal date.
932 Section 20. Subsection (1) and paragraph (a) of subsection
933 (4) of section 723.037, Florida Statutes, are amended to read:
934 723.037 Lot rental increases; reduction in services or
935 utilities; change in rules and regulations; mediation.-
936 (1) A park owner shall give written notice to each
937 affected mobile home owner and the board of directors of the
938 homeowners' association, if one has been formed, at least 90
939 days before any increase in lot rental amount or reduction in
940 services or utilities provided by the park owner or change in
941 rules and regulations. The park owner may give notice of all
942 increases in lot rental amount for multiple anniversary dates in
943 the same 90-day notice. The notice must shall identify all other
944 affected homeowners, which may be by lot number, name, group, or
945 phase. If the affected homeowners are not identified by name,
946 the park owner shall make the names and addresses available upon
947 request. However, this requirement does not authorize the
948 release of the names, addresses, or other private information
949 about the homeowners to the association or any other person for
950 any other purpose. The home owner's right to the 90-day notice
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951 may not be waived or precluded by a home owner, or the
952 homeowners' committee, in an agreement with the park owner.
953 Rules adopted as a result of restrictions imposed by
954 governmental entities and required to protect the public health,
955 safety, and welfare may be enforced prior to the expiration of
956 the 90-day period but are not otherwise exempt from the
957 requirements of this chapter. Pass-through charges must be
958 separately listed as to the amount of the charge, the name of
959 the governmental entity mandating the capital improvement, and
960 the nature or type of the pass-through charge being levied.
961 Notices of increase in the lot rental amount due to a pass-
962 through charge must shall state the additional payment and
963 starting and ending dates of each pass-through charge. The
964 homeowners' association shall have no standing to challenge the
965 increase in lot rental amount, reduction in services or
966 utilities, or change of rules and regulations unless a majority
967 of the affected homeowners agree, in writing, to such
968 representation.
969 (4) (a) A committee, not to exceed five in number,
970 designated by a majority of the affected mobile home owners or
971 by the board of directors of the homeowners' association, if
972 applicable, and the park owner shall meet, at a mutually
973 convenient time and place no later than 60 days before the
974 effective date of the change to discuss the reasons for the
975 increase in lot rental amount, reduction in services or
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976 utilities, or change in rules and regulations. The negotiating
977 committee shall make a written request for a meeting with the
978 park owner or subdivision developer to discuss those matters
979 addressed in the 90-day notice, and may include in the request a
980 listing of any other issue, with supporting documentation, that
981 the committee intends to raise and discuss at the meeting. The
982 committee shall address all lot rental amount increases that are
983 specified in the notice of lot rental amount increase,
984 regardless of the effective date of the increase.
985
986 This subsection is not intended to be enforced by civil or
987 administrative action. Rather, the meetings and discussions are
988 intended to be in the nature of settlement discussions prior to
989 the parties proceeding to mediation of any dispute.
990 Section 21. Subsections (5) and (6) are added to section
991 723.041, Florida Statutes, to read:
992 723.041 Entrance fees; refunds; exit fees prohibited;
993 replacement homes.-
994 (5) A mobile home park that is damaged or destroyed due to
995 wind, water, or other natural force may be rebuilt on the same
996 site with the same density as was approved, permitted, and built
997 before the park was damaged or destroyed.
998 ( 6) This section does not limit the regulation of the
999 uniform firesafety standards established under s. 633.206, but
1000 supersedes any other density, separation, setback, or lot size
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1001 regulation adopted after initial permitting and construction of
1002 the mobile home park.
1003 Section 22. Section 723.042, Florida Statutes, is amended
1004 to read:
1005 723.042 Provision of improvements.-~ Ne person may not
1006 shall be required by a mobile home park owner or developer, as a
1007 condition of residence in the mobile home park, to provide any
1008 improvement unless the requirement is disclosed pursuant to s.
1009 723.012(7) s. 723.011 prior to occupancy in the mobile home
1010 park.
1011 Section 23. Subsections (3) and (4) of section 723.059,
1012 Florida Statutes, are amended to read:
1013 723.059 Rights of Purchaser of a mobile home within a
1014 mobile home park.-
1015 (3) The purchaser of a mobile home who intends to become
1016 becomes a resident of the mobile home park in accordance with
1017 this section has the right to assume the remainder of the term
1018 of any rental agreement then in effect between the mobile home
1019 park owner and the seller and may assume the seller's
1020 prospectus. However, nothing herein shall prohibit a mobile home
1021 park owner from offering the purchaser of a mobile home any
1022 approved prospectus shall be entitled to rely on the terms and
1023 conditions of the prospectus or offering circular as delivered
1024 to the initial recipient.
1025 (4) However, nothing herein shall be construed to prohibit
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1026 a mobile home park owner from increasing the rental amount to be
1027 paid by the purchaser upon the expiration of the assumed rental
1028 agreement in an amount deemed appropriate by the mobile home
1029 park owner, so long as such increase is disclosed to the
1030 purchaser prior to his or her occupancy and is imposed in a
1031 manner consistent with the purchaser's initial offering circular
1032 e-r- prospectus and this act.
1033 Section 24. Paragraph (d) of subsection (1) of section
1034 723.061, Florida Statutes, is amended, and subsection (5) is
1035 added to that section, to read:
1036 723.061 Eviction; grounds, proceedings.-
1037 (1) A mobile home park owner may evict a mobile home
1038 owner, a mobile home tenant, a mobile home occupant, or a mobile
1039 home only on one or more of the following grounds:
1040 (d) Change in use of the land comprising the mobile home
1041 park, or the portion thereof from which mobile homes are to be
1042 evicted, from mobile home lot rentals to some other use, if:
1043 1. The park owner gives written notice to the homeowners'
1044 association formed and operating under ss. 723.075-723.079 of
1045 its right to purchase the mobile home park, if the land
1046 comprising the mobile home park is changing use from mobile home
1047 lot rentals to a different use, at the price and under the terms
1048 and conditions set forth in the written notice.
1049 a. The notice shall be delivered to the officers of the
1050 homeowners' association by United States mail. Within 45 days
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1051 after the date of mailing of the notice, the homeowners'
1052 association may execute and deliver a contract to the park owner
1053 to purchase the mobile home park at the price and under the
1054 terms and conditions set forth in the notice. If the contract
1055 between the park owner and the homeowners' association is not
1056 executed and delivered to the park owner within the 45-day
1057 period, the park owner is under no further obligation to the
1058 homeowners' association except as provided in sub-subparagraph
1059 b.
1060 b. If the park owner elects to offer or sell the mobile
1061 home park at a price lower than the price specified in her or
1062 his initial notice to the officers of the homeowners'
1063 association, the homeowners' association has an additional 10
1064 days to meet the revised price, terms, and conditions of the
1065 park owner by executing and delivering a revised contract to the
1066 park owner.
1067 c. The park owner is not obligated under this subparagraph
1068 ors. 723.071 to give any other notice to, or to further
1069 negotiate with, the homeowners' association for the sale of the
1070 mobile home park to the homeowners' association after 6 months
1071 after the date of the mailing of the initial notice under sub-
1072 subparagraph a.
1073 2. The park owner gives the affected mobile home owners
1074 and tenants at least 6 months' notice of the eviction due to the
1075 projected change in use and of their need to secure other
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1076 accommodations. Within 20 days after giving an eviction notice
1077 to a mobile home owner, the park owner must provide the division
1078 with a copy of the notice. The division must provide the
1079 executive director of the Florida Mobile Home Relocation
1080 Corporation with a copy of the notice.
1081 a. The notice of eviction due to a change in use of the
1082 land must include in a font no smaller than the body of the
1083 notice the following statement:
1084
1085 YOU MAY BE ENTITLED TO COMPENSATION FROM THE FLORIDA MOBILE HOME
1086 RELOCATION TRUST FUND, ADMINISTERED BY THE FLORIDA MOBILE HOME
1087 RELOCATION CORPORATION (FMHRC). FMHRC CONTACT INFORMATION IS
1088 AVAILABLE FROM THE FLORIDA DEPARTMENT OF BUSINESS AND
1089 PROFESSIONAL REGULATION.
1090
1091 b. The park owner may not give a notice of increase in lot
1092 rental amount within 90 days before giving notice of a change in
1093 use.
1094 (5) A park owner who accepts payment of any portion of the
1095 lot rental amount with actual knowledge of noncompliance after
1096 notice and termination of the rental agreement due to a
1097 violation under paragraph (1) (b), paragraph (1) (c), or paragraph
1098 ( 1) ( e) does not waive the right to terminate the rental
1099 agreement or the right to bring a civil action for the
1100 noncompliance, but not for any subsequent or continuing
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1101 noncompliance. Any rent so received must be accounted for at the
1102 final hearing.
1103 Section 25. Subsection (1) of section 723.076, Florida
1104 Statutes, is amended to read:
1105 723.076 Incorporation; notification of park owner.-
1106 (1) Upon receipt of its certificate of incorporation, the
1107 homeowners' association shall notify the park owner in writing
1108 of such incorporation and shall advise the park owner of the
1109 names and addresses of the officers of the homeowners'
1110 association by personal delivery upon the park owner's
1111 representative as designated in the prospectus or by certified
1112 mail, return receipt requested. Thereafter, the homeowners'
1113 association shall notify the park owner in writing by certified
1114 mail, return receipt requested, of any change of names and
1115 addresses of its president or registered agent. Upon election or
1116 appointment of new officers or members, the homeowners'
1117 association shall notify the park owner in writing by certified
1118 mail, return receipt requested, of the names and addresses of
1119 the new officers or members.
1120 Section 26. Paragraphs (b) through (e) of subsection (2)
1121 of section 723.078, Florida Statutes, are amended, and paragraph
1122 (i) of that subsection is reenacted, to read:
1123 723.078 Bylaws of homeowners' associations.-
1124 (2) The bylaws shall provide and, if they do not, shall be
1125 deemed to include, the following provisions:
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112 6 (b) Quorum; voting requirements; proxies.-
1127 1. Unless otherwise provided in the bylaws, 30 percent of
1128 the total membership is required to constitute a quorum.
1129 Decisions shall be made by a majority of members represented at
1130 a meeting at which a quorum is present.
1131 2.a. A member may not vote by general proxy but may vote
1132 by limited proxies substantially conforming to a limited proxy
1133 form adopted by the division. Limited proxies and general
1134 proxies may be used to establish a quorum. Limited proxies may
1135 be used for votes taken to amend the articles of incorporation
1136 or bylaws pursuant to this section, and any other matters for
1137 which this chapter requires or permits a vote of members~7
1138 except that no proxy, limited or general, may not be used in the
1139 election of board members in general elections or elections to
1140 fill vacancies caused by recall, resignation, or otherwise.
1141 Board members must be elected by written ballot or by voting in
1142 person. If a mobile home or subdivision lot is owned jointly,
1143 the owners of the mobile home or subdivision lot must be counted
1144 as one for the purpose of determining the number of votes
1145 required for a majority. Only one vote per mobile home or
1146 subdivision lot shall be counted. Any number greater than 50
1147 percent of the total number of votes constitutes a majority.
1148 Notwithstanding this section, members may vote in person at
1149 member meetings or by secret ballot, including absentee ballots,
1150 as defined by the division.
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1151 b. Elections shall be decided by a plurality of the
1152 ballots cast. There is no quorum requirement; however, at least
1153 20 percent of the eligible voters must cast a ballot in order to
1154 have a valid election. A member may not allow any other person
1155 to cast his or her ballot, and any ballots improperly cast are
1156 invalid. An election is not required unless there are more
1157 candidates nominated than vacancies that exist on the board.
1158 c. Each member or other eligible person who desires to be
1159 a candidate for the board of directors shall appear on the
1160 ballot in alphabetical order by surname. A ballot may not
1161 indicate if any of the candidates are incumbent on the board.
1162 All ballots must be uniform in appearance. Write-in candidates
1163 and more than one vote per candidate per ballot are not allowed.
1164 A ballot may not provide a space for the signature of, or any
1165 other means of identifying, a voter. If a ballot contains more
1166 votes than vacancies or fewer votes than vacancies, the ballot
1167 is invalid unless otherwise stated in the bylaws.
1168 d. An impartial committee shall be responsible for
1169 overseeing the election process and complying with all ballot
1170 requirements. For purposes of this section, the term "impartial
1171 committee" means a committee whose members do not include any of
1172 the following people or their spouses:
1173 (I) Current board members.
1174 (II) Current association officers.
1175 (III) Candidates for the association or board.
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1176 e. The association bylaws shall provide a method for
1177 determining the winner of an election in which two or more
1178 candidates for the same position receive the same number of
1179 votes.
1180 f. The division shall adopt procedural rules to govern
1181 elections, including, but not limited to, rules for providing
1182 notice by electronic transmission and rules for maintaining the
1183 secrecy of ballots.
1184 3. A proxy is effective only for the specific meeting for
1185 which originally given and any lawfully adjourned meetings
1186 thereof. In no event shall any proxy be valid for a period
1187 longer than 90 days after the date of the first meeting for
1188 which it was given. Every proxy shall be revocable at any time
1189 at the pleasure of the member executing it.
1190 4. A member of the board of directors or a committee may
1191 submit in writing his or her agreement or disagreement with any
1192 action taken at a meeting that the member did not attend. This
1193 agreement or disagreement may not be used as a vote for or
1194 against the action taken and may not be used for the purposes of
1195 creating a quorum.
1196 (c) Board of directors' and committee meetings.-
1197 1. Meetings of the board of directors and meetings of its
1198 committees at which a quorum is present shall be open to all
1199 members. Notwithstanding any other provision of law, the
1200 requirement that board meetings and committee meetings be open
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1201 to the members does not apply to meetings between the park owner
1202 and the board of directors or any of the board's committees,
1203 board or committee meetings held for the purpose of discussing
1204 personnel mattersL or meetings between the board or a committee
1205 and the association's attorney, with respect to potential or
1206 pending litigation, when where the meeting is held for the
1207 purpose of seeking or rendering legal advice, and when where the
1208 contents of the discussion would otherwise be governed by the
1209 attorney-client privilege. Notice of all meetings open to
1210 members shall be posted in a conspicuous place upon the park
1211 property at least 48 hours in advance, except in an emergency.
1212 Notice of any meeting in which dues assessffients against ffiembers
1213 are to be considered for any reason shall specifically contain a
1214 statement that dues assessffients will be considered and the
1215 nature of such dues assessffients.
1216 2. A board or committee member's participation in a
1217 meeting via telephone, real-time videoconferencing, or similar
1218 real-time telephonic, electronic, or video communication counts
1219 toward a quorum, and such member may vote as if physically
1220 present. A speaker shall be used so that the conversation of
1221 those board or committee members attending by telephone may be
1222 heard by the board or committee members attending in person, as
1223 well as by members present at a meeting.
1224 3. Members of the board of directors may use e-mail as a
1225 means of communication but may not cast a vote on an association
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1226 matter via e-mail.
1227 4. The right to attend meetings of the board of directors
1228 and its committees includes the right to speak at such meetings
122 9 with reference to all designated agenda items. The association
1230 may adopt reasonable written rules governing the frequency,
1231 duration, and manner of members' statements. Any item not
1232 included on the notice may be taken up on an emergency basis by
1233 at least a majority plus one of the members of the board. Such
1234 emergency action shall be noticed and ratified at the next
1235 regular meeting of the board. Any member may tape record or
1236 videotape meetings of the board of directors and its committees,
1237 except meetings between the board of directors or its appointed
1238 homeowners' committee and the park owner. The division shall
1239 adopt reasonable rules governing the tape recording and
1240 videotaping of the meeting.
1241 5. Except as provided in paragraph (i), a vacancy
1242 occurring on the board of directors may be filled by the
1243 affirmative vote of the majority of the remaining directors,
1244 even though the remaining directors constitute less than a
1245 quorum; by the sole remaining director; if the vacancy is not so
1246 filled or if no director remains, by the members; or, on the
1247 application of any person, by the circuit court of the county in
1248 which the registered office of the corporation is located.
1249 6. The term of a director elected or appointed to fill a
1250 vacancy expires at the next annual meeting at which directors
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1251 are elected. A directorship to be filled by reason of an
1252 increase in the number of directors may be filled by the board
1253 of directors, but only for the term of office continuing until
1254 the next election of directors by the members.
1255 7. A vacancy that will occur at a specific later date, by
1256 reason of a resignation effective at a later date, may be filled
1257 before the vacancy occurs. However, the new director may not
1258 take office until the vacancy occurs.
1259 8.a. The officers and directors of the association have a
1260 fiduciary relationship to the members.
1261 b. A director and committee member shall discharge his or
1262 her duties in good faith, with the care an ordinarily prudent
1263 person in a like position would exercise under similar
1264 circumstances, and in a manner he or she reasonably believes to
1265 be in the best interests of the corporation.
1266 9. In discharging his or her duties, a director may rely
1267 on information, opinions, reports, or statements, including
1268 financial statements and other financial data, if prepared or
1269 presented by:
1270 a. One or more officers or employees of the corporation
1271 who the director reasonably believes to be reliable and
1272 competent in the matters presented;
1273 b. Legal counsel, public accountants, or other persons as
1274 to matters the director reasonably believes are within the
1275 persons' professional or expert competence; or
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1276 c. A committee of the board of directors of which he or
1277 she is not a member if the director reasonably believes the
1278 committee merits confidence.
1279 10. A director is not acting in good faith if he or she
1280 has knowledge concerning the matter in question that makes
1281 reliance otherwise permitted by subparagraph 9. unwarranted.
1282 11. A director is not liable for any action taken as a
1283 director, or any failure to take any action, if he or she
1284 performed the duties of his or her office in compliance with
1285 this section.
1286 (d) Member meetings.-Members shall meet at least once each
1287 calendar year, and the meeting shall be the annual meeting. All
1288 members of the board of directors shall be elected at the annual
1289 meeting unless the bylaws provide for staggered election terms
1290 or for their election at another meeting. The bylaws shall not
1291 restrict any member desiring to be a candidate for board
1292 membership from being nominated from the floor. All nominations
1293 from the floor must be made at a duly noticed meeting of the
1294 members held at least 27 -3--G- days before the annual meeting. The
1295 bylaws shall provide the method for calling the meetings of the
1296 members, including annual meetings. The method shall provide at
1297 least 14 days' written notice to each member in advance of the
1298 meeting and require the posting in a conspicuous place on the
1299 park property of a notice of the meeting at least 14 days prior
1300 to the meeting. The right to receive written notice of
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1301 membership meetings may be waived in writing by a member. Unless
1302 waived, the notice of the annual meeting shall be mailed, hand
1303 delivered, or electronically transmitted to each member, and
1304 shall constitute notice. Unless otherwise stated in the bylaws,
1305 an officer of the association shall provide an affidavit
1306 affirming that the notices were mailedL e-r hand delivered~
1307 provided by electronic transmission in accordance with -t:fie
1308 provisions of this section to each member at the address last
1309 furnished to the corporation. These meeting requirements do not
1310 prevent members from waiving notice of meetings or from acting
1311 by written agreement without meetings, if allowed by the bylaws.
1312 (e) Minutes of meetings.-
1313 1. Notwithstanding any other provision of law, the minutes
1314 of board or committee meetings that are closed to members are
1315 privileged and confidential and are not available for inspection
1316 or photocopying.
1317 2. Minutes of all meetings of members of an association
1318 and meetings open to members of7 the board of directors 7 and a
1319 committee of the board must be maintained in written form and
1320 approved by the members, board, or committee, as applicable. A
1321 vote or abstention from voting on each matter voted upon for
1322 each director present at a board meeting must be recorded in the
1323 minutes.
1324 3.~ All approved minutes of open meetings of members,
1325 committees, and the board of directors shall be kept in a
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1326 businesslike manner and shall be available for inspection by
1327 members, or their authorized representatives, and board members
1328 at reasonable times. The association shall retain these minutes
1329 within this state for a period of at least~+ years.
1330 (i) Recall of board members.-Any member of the board of
1331 directors may be recalled and removed from office with or
1332 without cause by the vote of or agreement in writing by a
1333 majority of all members. A special meeting of the members to
1334 recall a member or members of the board of directors may be
1335 called by 10 percent of the members giving notice of the meeting
1336 as required for a meeting of members, and the notice shall state
1337 the purpose of the meeting. Electronic transmission may not be
1338 used as a method of giving notice of a meeting called in whole
1339 or in part for this purpose.
1340 1. If the recall is approved by a majority of all members
1341 by a vote at a meeting, the recall is effective as provided in
1342 this paragraph. The board shall duly notice and hold a board
1343 meeting within 5 full business days after the adjournment of the
1344 member meeting to recall one or more board members. At the
1345 meeting, the board shall either certify the recall, in which
1346 case such member or members shall be recalled effective
1347 immediately and shall turn over to the board within 5 full
1348 business days any and all records and property of the
1349 association in their possession, or shall proceed under
1350 subparagraph 3.
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1351 2. If the proposed recall is by an agreement in writing by
1352 a majority of all members, the agreement in writing or a copy
1353 thereof shall be served on the association by certified mail or
1354 by personal service in the manner authorized by chapter 48 and
1355 the Florida Rules of Civil Procedure. The board of directors
1356 shall duly notice and hold a meeting of the board within 5 full
1357 business days after receipt of the agreement in writing. At the
1358 meeting, the board shall either certify the written agreement to
1359 recall members of the board, in which case such members shall be
1360 recalled effective immediately and shall turn over to the board,
1361 within 5 full business days, any and all records and property of
1362 the association in their possession, or shall proceed as
1363 described in subparagraph 3.
1364 3. If the board determines not to certify the written
1365 agreement to recall members of the board, or does not certify
1366 the recall by a vote at a meeting, the board shall, within 5
1367 full business days after the board meeting, file with the
1368 division a petition for binding arbitration pursuant to the
1369 procedures of s. 723.1255. For purposes of this paragraph, the
1370 members who voted at the meeting or who executed the agreement
1371 in writing shall constitute one party under the petition for
1372 arbitration. If the arbitrator certifies the recall of a member
1373 of the board, the recall shall be effective upon mailing of the
1374 final order of arbitration to the association. If the
1375 association fails to comply with the order of the arbitrator,
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1376 the division may take action under s. 723.006. A member so
1377 recalled shall deliver to the board any and all records and
1378 property of the association in the member's possession within 5
1379 full business days after the effective date of the recall.
1380 4. If the board fails to duly notice and hold a board
1381 meeting within 5 full business days after service of an
1382 agreement in writing or within 5 full business days after the
1383 adjournment of the members' recall meeting, the recall shall be
1384 deemed effective and the board members so recalled shall
1385 immediately turn over to the board all records and property of
1386 the association.
1387 5. If the board fails to duly notice and hold the required
1388 meeting or fails to file the required petition, the member's
1389 representative may file a petition pursuant to s. 723.1255
1390 challenging the board's failure to act. The petition must be
1391 filed within 60 days after expiration of the applicable 5-full-
1392 business-day period. The review of a petition under this
1393 subparagraph is limited to the sufficiency of service on the
1394 board and the facial validity of the written agreement or
1395 ballots filed.
1396 6. If a vacancy occurs on the board as a result of a
1397 recall and less than a majority of the board members are
1398 removed, the vacancy may be filled by the affirmative vote of a
1399 majority of the remaining directors, notwithstanding any other
1400 provision of this chapter. If vacancies occur on the board as a
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1401 result of a recall and a majority or more of the board members
1402 are removed, the vacancies shall be filled in accordance with
1403 procedural rules to be adopted by the division, which rules need
1404 not be consistent with this chapter. The rules must provide
1405 procedures governing the conduct of the recall election as well
1406 as the operation of the association during the period after a
1407 recall but before the recall election.
1408 7. A board member who has been recalled may file a
1409 petition pursuant to s. 723.1255 challenging the validity of the
1410 recall. The petition must be filed within 60 days after the
1411 recall is deemed certified. The association and the member's
1412 representative shall be named as the respondents.
1413 8. The division may not accept for filing a recall
1414 petition, whether or not filed pursuant to this subsection, and
1415 regardless of whether the recall was certified, when there are
1416 60 or fewer days until the scheduled reelection of the board
1417 member sought to be recalled or when 60 or fewer days have not
1418 elapsed since the election of the board member sought to be
1419 recalled.
1420 Section 27. Paragraphs (d) and (f) through (i) of
1421 subsection (4) and subsection (5) of section 723.079, Florida
1422 Statutes, are amended to read:
1423 723.079 Powers and duties of homeowners' association.-
1424 (4) The association shall maintain the following items,
1425 when applicable, which constitute the official records of the
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1426 association:
1427 (d) The approved minutes of all meetings of the members of
1428 an association and meetings open for members ofT the board of
1429 directors, and committees of the board, which minutes must be
1430 retained within this 'f:-fie state for at least 5 + years.
1431 (f) All of the association's insurance policies or copies
1432 thereof, which must be retained within this state for at least 5
1433 + years after the expiration date of the policy.
1434 (g) A copy of all contracts or agreements to which the
1435 association is a party, including, without limitation, any
1436 written agreements with the park owner, lease, or other
1437 agreements or contracts under which the association or its
1438 members has any obligation or responsibility, which must be
1439 retained within this state for at least~+ years after the
1440 expiration date of the contract or agreement.
1441 (h) The financial and accounting records of the
1442 association, kept according to good accounting practices. All
1443 financial and accounting records must be maintained within this
1444 state for a period of at least 5 + years. The financial and
1445 accounting records must include:
1446 1. Accurate, itemized, and detailed records of all
1447 receipts and expenditures.
1448 2. A current account and a periodic statement of the
1449 account for each member, designating the name and current
1450 address of each member who is obligated to pay dues or
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1451 assessments, the due date and amount of each assessment or other
1452 charge against the member, the date and amount of each payment
1453 on the account, and the balance due.
1454 3. All tax returns, financial statements, and financial
1455 reports of the association.
1456 4. Any other records that identify, measure, record, or
1457 communicate financial information.
1458 (i) All other written records of the association not
1459 specifically included in the foregoing which are related to the
1460 operation of the association must be retained within this state
1461 for at least 5 years or at least 5 years after the expiration
1462 date, as applicable.
1463 (5) The official records shall be ffiaintained within the
1464 state for at least 7 years and shall be made available to a
1465 member for inspection or photocopying within 20 ±-& business days
1466 after receipt by the board or its designee of a written request
1467 submitted by certified mail, return receipt requested. The
1468 requirements of this subsection are satisfied by having a copy
1469 of the official records available for inspection or copying in
1470 the park or, at the option of the association, by making the
1471 records available to a member electronically via the Internet or
1472 by allowing the records to be viewed in electronic format on a
1473 computer screen and printed upon request. If the association has
1474 a photocopy machine available where the records are maintained,
1475 it must provide a member with copies on request during the
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1476 inspection if the entire request is no more than 25 pages. An
1477 association shall allow a member or his or her authorized
1478 representative to use a portable device, including a smartphone,
1479 tablet, portable scanner, or any other technology capable of
1480 scanning or taking photographs, to make an electronic copy of
1481 the official records in lieu of the association's providing the
1482 member or his or her authorized representative with a copy of
1483 such records. The association may not charge a fee to a member
1484 or his or her authorized representative for the use of a
1485 portable device.
1486 (a) The failure of an association to provide access to the
1487 records within 20 ±-G- business days after receipt of a written
1488 request submitted by certified mail, return receipt requested,
1489 creates a rebuttable presumption that the association willfully
1490 failed to comply with this subsection.
1491 (b) A member who is denied access to official records is
1492 entitled to the actual damages or minimum damages for the
1493 association's willful failure to comply with this subsection in
1494 the amount of. The minimillR damages are to be $10 per calendar
1495 day up to 10 days, not to exceed $100. The calculation for
1496 damages begins to begin on the 21st -±-±-t-fT business day after
1497 receipt of the written request, submitted by certified mail,
1498 return receipt requested.
1499 (c) A dispute between a member and an association
1500 regarding inspecting or photocopying official records must be
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1501 submitted to mandatory binding arbitration with the division,
1502 and the arbitration must be conducted pursuant to s. 723.1255
1503 and procedural rules adopted by the division.
1504 ~ The association may adopt reasonable written rules
1505 governing the frequency, time, location, notice, records to be
1506 inspected, and manner of inspections, but may not require a
1507 member to demonstrate a proper purpose for the inspection, state
1508 a reason for the inspection, or limit a member's right to
1509 inspect records to less than 1 business day per month. The
1510 association may impose fees to cover the costs of providing
1511 copies of the official records, including the costs of copying
1512 and for personnel to retrieve and copy the records if the time
1513 spent retrieving and copying the records exceeds 30 minutes and
1514 if the personnel costs do not exceed $20 per hour. Personnel
1515 costs may not be charged for records requests that result in the
1516 copying of 25 or fewer pages. The association may charge up to
1517 25 cents per page for copies made on the association's
1518 photocopier. If the association does not have a photocopy
1519 machine available where the records are kept, or if the records
1520 requested to be copied exceed 25 pages in length, the
1521 association may have copies made by an outside duplicating
1522 service and may charge the actual cost of copying, as supported
1523 by the vendor invoice. The association shall maintain an
1524 adequate number of copies of the recorded governing documents,
1525 to ensure their availability to members and prospective members.
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1526 Notwithstanding this paragraph, the following records are not
1527 accessible to members or home owners:
1528 1. A record protected by the lawyer-client privilege as
1529 described ins. 90.502 and a record protected by the work-
1530 product privilege, including, but not limited to, a record
1531 prepared by an association attorney or prepared at the
1532 attorney's express direction which reflects a mental impression,
1533 conclusion, litigation strategy, or legal theory of the attorney
1534 or the association and which was prepared exclusively for civil
1535 or criminal litigation, for adversarial administrative
1536 proceedings, or in anticipation of such litigation or
1537 proceedings until the conclusion of the litigation or
1538 proceedings.
1539 2. E-mail addresses, telephone numbers, facsimile numbers,
1540 emergency contact information, any addresses for a home owner
1541 other than as provided for association notice requirements, and
1542 other personal identifying information of any person, excluding
1543 the person's name, lot designation, mailing address, and
1544 property address. Notwithstanding the restrictions in this
1545 subparagraph, an association may print and distribute to home
1546 owners a directory containing the name, park address, and
1547 telephone number of each home owner. However, a home owner may
1548 exclude his or her telephone number from the directory by so
1549 requesting in writing to the association. The association is not
1550 liable for the disclosure of information that is protected under
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1551 this subparagraph if the information is included in an official
1552 record of the association and is voluntarily provided by a home
1553 owner and not requested by the association.
1554 3. An electronic security measure that is used by the
1555 association to safeguard data, including passwords.
1556 4. The software and operating system used by the
1557 association which allows the manipulation of data, even if the
1558 home owner owns a copy of the same software used by the
1559 association. The data is part of the official records of the
1560 association.
1561 Section 28. Section 723.1255, Florida Statutes, is amended
1562 to read:
1563 723.1255 Alternative resolution of recall, election, and
1564 inspection and photocopying of official records disputes.-
1565 (1) A dispute between a mobile home owner and a
1566 homeowners' association regarding the election and recall of
1567 officers or directors under s. 723.078(2) (b) or regarding the
1568 inspection and photocopying of official records under s.
1569 723.079(5) must be submitted to mandatory binding arbitration
1570 with the division. The arbitration shall be conducted in
1571 accordance with this section and the procedural rules adopted by
1572 the division.
1573 (2) Each party shall be responsible for paying its own
1574 attorney fees, expert and investigator fees, and associated
1575 costs. The cost of the arbitrators shall be divided equally
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1576 between the parties regardless of the outcome.
1577 (3) The division shall adopt procedural rules to govern
1578 mandatory binding arbitration proceedings The Division of
157 9 Florida Condominiums, Timeshares, and Mobile Homes of the
1580 Department of Business and Professional Regulation shall adopt
1581 rules of procedure to govern binding recall arbitration
1582 proceedings.
1583 Section 29. For the purpose of incorporating the amendment
1584 made by this act to section 420.5087, Florida Statutes, in a
1585 reference thereto, paragraph (i) of subsection (22) of section
1586 420.507, Florida Statutes, is reenacted to read:
1587 420.507 Powers of the corporation.-The corporation shall
1588 have all the powers necessary or convenient to carry out and
1589 effectuate the purposes and provisions of this part, including
1590 the following powers which are in addition to all other powers
1591 granted by other provisions of this part:
1592 (22) To develop and administer the State Apartment
1593 Incentive Loan Program. In developing and administering that
1594 program, the corporation may:
1595 (i) Establish, by rule, the procedure for competitively
1596 evaluating and selecting all applications for funding based on
1597 the criteria set forth in s. 42 0. 5087 ( 6) ( c) , determining actual
1598 loan amounts, making and servicing loans, and exercising the
1599 powers authorized in this subsection.
1600 Section 30. For the purpose of incorporating the amendment
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1601 made by this act to section 420.5095, Florida Statutes, in a
1602 reference thereto, subsection (2) of section 193.018, Florida
1603 Statutes, is reenacted to read:
1604 193.018 Land owned by a community land trust used to
1605 provide affordable housing; assessment; structural improvements,
1606 condominium parcels, and cooperative parcels.-
1607 (2) A community land trust may convey structural
1608 improvements, condominium parcels, or cooperative parcels, that
1609 are located on specific parcels of land that are identified by a
1610 legal description contained in and subject to a ground lease
1611 having a term of at least 99 years, for the purpose of providing
1612 affordable housing to natural persons or families who meet the
1613 extremely-low-income, very-low-income, low-income, or moderate-
1614 income limits specified ins. 420.0004, or the income limits for
1615 workforce housing, as defined ins. 420.5095(3). A community
1616 land trust shall retain a preemptive option to purchase any
1617 structural improvements, condominium parcels, or cooperative
1618 parcels on the land at a price determined by a formula specified
1619 in the ground lease which is designed to ensure that the
1620 structural improvements, condominium parcels, or cooperative
1621 parcels remain affordable.
1622 Section 31. This act shall take effect July 1, 2020.
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HB 1339 by Rep. Yarborough
Housing
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Yarborough (Strike-all amendment):
The strike-all amendment:
• Includes "private entities" in addition to counties and municipalities for purposes of
issuing bonds under the Florida lnterlocal Cooperation Act.
• Provides that a building official may not audit a construction project being inspected by a
private inspector more than four times a year instead of current law, which prohibits a
building official from auditing a private inspector more than four times a year regardless
of the project.
• Amends the definition of "affordable" to also include housing provided by a not-for-profit
corporation, that is for low-income persons and low-income households that provides
treatment for persons who suffer from mental health, substance abuse, or domestic
violence; and that provides on-premises social and community support services.
• Clarifies that for purposes of the construction of transitional housing for persons aging
out of foster care, "on campus" means on a campus that provides housing for persons in
foster care or persons aging out of foster care.
The remainder of the bill's provisions are unchanged by the strike-all amendment.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1339 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Yarborough offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6
7 Section 1. Subsection (4) is added to section 125.01055,
8 Florida Statutes, to read:
9 125.01055 Affordable pousing.-
10 (4) Notwithstanding any other law, local ordinance, or
11 regulation to the contrary, the board of county commissioners
12 may approve the development of housing that is affordable, as
13 defined ins. 420.0004, on any parcel zoned for residential,
14 commercial, or industrial use.
15 Section 2. Paragraph (d) of subsection (7) of section
16 163.01, Florida Statutes, is amended to read:
386787 - hl339-strike.docx
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Amendment No. 1
17 163.01 Florida Interlocal Cooperation Act of 1969.-
18 (7)
19 (d) Notwithstanding the provisions of paragraph (c), any
20 separate legal entity created pursuant to this section and
21 controlled by the municipalities or counties of this state or by
22 one or more municipality and one or more county of this state,
23 the membership of which consists or is to consist of
24 municipalities only, counties only, or one or more municipality
25 and one or more county, may, for the purpose of financing or
26 refinancing any capital projects, exercise all powers in
27 connection with the authorization, issuance, and sale of bonds.
28 Notwithstanding any limitations provided in this section, all of
29 the privileges, benefits, powers, and terms of part I of chapter
30 125, part II of chapter 166, and part I of chapter 159 shall be
31 fully applicable to such entity. Bonds issued by such entity
32 shall be deemed issued on behalf of the counties~ e-r-
33 municipalities, or private entities which enter into loan
34 agreements with such entity as provided in this paragraph. Any
35 loan agreement executed pursuant to a program of such entity
36 shall be governed by the provisions of part I of chapter 159 or,
37 in the case of counties, part I of chapter 125, or in the case
38 of municipalities and charter counties, part II of chapter 166.
39 Proceeds of bonds issued by such entity may be loaned to
40 counties or municipalities of this state or a combination of
41 municipalities and counties, whether or not such counties or
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42 municipalities are also members of the entity issuing the bonds~
43 or to private entities for "self-liquidating" projects as
44 defined ins. 159.02, whether or not such private entities are
45 located within the jurisdictional boundaries of a county or
46 municipality that is a member of the entity issuing the bonds.
47 The issuance of bonds by such entity to fund a loan program to
48 make loans to municipalities~ er counties, or private entities
49 or a combination of municipalities~ afi€i counties, and private
50 entities with one another for capital projects to be identified
51 subsequent to the issuance of the bonds to fund such loan
52 programs is deemed to be a paramount public purpose. Any entity
53 so created may also issue bond anticipation notes, as provided
54 bys. 215.431, in connection with the authorization, issuance,
55 and sale of such bonds. In addition, the governing body of such
56 legal entity may also authorize bonds to be issued and sold from
57 time to time and may delegate, to such officer, official, or
58 agent of such legal entity as the governing body of such legal
59 entity may select, the power to determine the time; manner of
60 sale, public or private; maturities; rate or rates of interest,
61 which may be fixed or may vary at such time or times and in
62 accordance with a specified formula or method of determination;
63 and other terms and conditions as may be deemed appropriate by
64 the officer, official, or agent so designated by the governing
65 body of such legal entity. However, the amounts and maturities
66 of such bonds and the interest rate or rates of such bonds shall
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67 be within the limits prescribed by the governing body of such
68 legal entity and its resolution delegating to such officer,
69 official, or agent the power to authorize the issuance and sale
70 of such bonds. A local government self-insurance fund
71 established under this section may financially guarantee bonds
72 or bond anticipation notes issued or loans made under this
73 subsection. Bonds issued pursuant to this paragraph may be
74 validated as provided in chapter 75. The complaint in any action
75 to validate such bonds shall be filed only in the Circuit Court
76 for Leon County. The notice required to be published bys. 75.06
77 shall be published only in Leon County, and the complaint and
78 order of the circuit court shall be served only on the State
79 Attorney of the Second Judicial Circuit and on the state
80 attorney of each circuit in each county where the public
81 agencies which were initially a party to the agreement are
82 located. Notice of such proceedings shall be published in the
83 manner and the time required bys. 75.06 in Leon County and in
84 each county where the public agencies which were initially a
85 party to the agreement are located. Obligations of any county or
86 municipality pursuant to a loan agreement as described in this
87 paragraph may be validated as provided in chapter 75.
88 Section 3. Subsections (1), (3), and (4) of section
89 163.31771, Florida Statutes, are amended to read:
90 163.31771 Accessory dwelling units.-
91 (1) The Legislature finds that the median price of homes
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92 in this state has increased steadily over the last decade and at
93 a greater rate of increase than the median income in many urban
94 areas. The Legislature finds that the cost of rental housing has
95 also increased steadily and the cost often exceeds an amount
96 that is affordable to extremely-low-income, very-low-income,
97 low-income, or moderate-income persons and has resulted in a
98 critical shortage of affordable rentals in many urban areas in
99 the state. This shortage of affordable rentals constitutes a
100 threat to the health, safety, and welfare of the residents of
101 the state. Therefore, the Legislature finds that it serves an
102 important public purpose to require encourage the permitting of
103 accessory dwelling units in single-family residential areas in
104 order to increase the availability of affordable rentals for
105 extremely-low-income, very-low-income, low-income, or moderate-
106 income persons.
107 (3) Each Upon a finding by a local government that there
108 is a shortage of affordable rentals within its jurisdiction, the
109 local government shall may adopt an ordinance to allow accessory
110 dwelling units in any area zoned for single-family residential
111 use, except in an area of critical state concern where the state
112 caps the number of new housing units which may be built within a
113 year.
114 ( 4) If the local government adopts an ordinance under this
115 section, An application for a building permit to construct an
116 accessory dwelling unit must include an affidavit from the
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117 applicant which attests that the unit will be rented at an
118 affordable rate to an extremely-low-income, very-low-income,
119 low-income, or moderate-income person or persons.
120 Section 4. Subsection (10) is added to section 163.31801,
121 Florida Statutes, to read:
122 163.31801 Impact fees; short title; intent; minimum
123 requirements; audits; challenges.-
124 (10) In addition to the items that must be reported in the
125 annual financial reports under s. 218.32, each county,
126 municipality, and special district must report all of the
127 following data on each impact fee charged:
128 (a) The specific purpose of the impact fee, including the
129 specific infrastructure needs to be met such as transportation,
130 parks, water, sewer, and schools.
131 (b) The impact fee schedule policy describing the method
132 of calculating impact fees, such as flat fees, tiered fees based
133 on the number of bedrooms, or tiered fees based on the square
134 footage.
135 (c) The amount assessed for each purpose and for each type
136 of dwelling.
137 (d) The total amount of impact fees charged by type of
138 dwelling.
139 Section 5. Subsection (4) is added to section 166.04151,
140 Florida Statutes, to read: ,
141 166.04151 Affordable housing.-
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142 (4) Notwithstanding any other law, local ordinance, or
143 regulation to the contrary, the governing body of a municipality
144 may approve the development of housing that is affordable, as
145 defined ins. 420.0004, on any parcel zoned for residential,
146 commercial, or industrial use.
147 Section 6. Paragraph (h) of subsection (3) of section
148 320.77, Florida Statutes, is amended to read:
149 320.77 License required of mobile home dealers.-
150 (3) APPLICATION.-The application for such license shall be
151 in the form prescribed by the department and subject to such
152 rules as may be prescribed by it. The application shall be
153 verified by oath or affirmation and shall contain:
154 (h) Certification by the applicant~
155 1. That the location is a permanent one, not a tent or a
156 temporary stand or other temporary quarters~; and,
157 2. Except in the case of a mobile home broker, that the
158 location affords sufficient unoccupied space to display store
159 all mobile homes offered and displayed for sale. A space to
160 display a manufactured home as a model home satisfies this
161 requirement.; and that The location must be -i-s- a suitable place
162 in which the applicant can in good faith carry on business and
163 keep and maintain books, records, and files necessary to conduct
164 such business, which must W±-1-1- be available at all reasonable
165 hours to inspection by the department or any of its inspectors
166 or other employees.
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167
168 This paragraph does subsection shall not preclude a licensed
169 mobile home dealer from displaying and offering for sale mobile
170 homes in a mobile home park.
171
172 The department shall, if it deems necessary, cause an
173 investigation to be made to ascertain if the facts set forth in
174 the application are true and shall not issue a license to the
175 applicant until it is satisfied that the facts set forth in the
176 application are true.
177 Section 7. Paragraph (j) of subsection (3) of section
178 320.771, Florida Statutes, is amended to read:
179 320.771 License required of recreational vehicle dealers.-
180 (3) APPLICATION.-The application for such license shall be
181 in the form prescribed by the department and subject to such
182 rules as may be prescribed by it. The application shall be
183 verified by oath or affirmation and shall contain:
184 (j) A statement that the applicant is insured under a
185 garage liability insurance policy, which shall include, at a
186 minimum, $25,000 combined single-limit liability coverage,
187 including bodily injury and property damage protection, and
188 $10,000 personal injury protection, if the applicant is to be
189 licensed as a dealer in, or intends to sell, recreational
190 vehicles. However, a garage liability policy is not required for
191 the licensure of a mobile home dealer who sells only park
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192 trailers.
193
194 The department shall, if it deems necessary, cause an
195 investigation to be made to ascertain if the facts set forth in
196 the application are true and shall not issue a license to the
197 applicant until it is satisfied that the facts set forth in the
198 application are true.
199 Section 8. Paragraph (c) of subsection (2) of section
200 320.822, Florida Statutes, is amended to read:
201 320.822 Definitions; ss. 320.822-320.862.-In construing
202 ss. 320.822-320.862, unless the context otherwise requires, the
203 following words or phrases have the following meanings:
204 (2) "Code" means the appropriate standards found in:
205 (c) The Mobile and Manufactured Home Repair and Remodeling
206 Code and the Used Recreational Vehicle Code.
207 Section 9. Subsection (2) of section 320.8232, Florida
208 Statutes, is amended to read:
209 320.8232 Establishment of uniform standards for used
210 recreational vehicles and repair and remodeling code for mobile
211 homes.-
212 (2) The Mobile and Manufactured Home provisions of the
213 Repair and Remodeling Code must be a uniform code, must shall
214 ensure safe and livable housingL and may shall not be more
215 stringent than those standards required to be met in the
216 manufacture of mobile homes. Such code must provisions shall
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217 include, but not be limited to, standards for structural
218 adequacy, plumbing, heating, electrical systems, and fire and
219 life safety. All repairs and remodeling of mobile and
220 manufactured homes must be performed in accordance with
221 department rules.
222 Section 10. Subsection (9) of section 367.022, Florida
223 Statutes, is amended, and subsection (14) is added to that
224 section, to read:
225 367.022 Exemptions.-The following are not subject to
226 regulation by the commission as a utility nor are they subject
227 to the provisions of this chapter, except as expressly provided:
228 (9) Any person who resells water service to his or her
229 tenants or to individually metered residents for a fee that does
230 not exceed the actual purchase price of the water and wastewater
231 service plus the actual cost of meter reading and billing, not
232 to exceed 9 percent of the actual cost of service.
233 (14) The owner of a mobile home park operating both as a
234 mobile home park and a mobile home subdivision, as those terms
235 are defined ins. 723.003, who provides service within the park
236 and subdivision to a combination of both tenants and lot owners,
237 provided that the service to tenants is without specific
238 compensation.
239 Section 11. Paragraph (c) of subsection (6) of section
240 420.5087, Florida Statutes, is amended to read:
241 420.5087 State Apartment Incentive Loan Program.-There is
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242 hereby created the State Apartment Incentive Loan Program for
243 the purpose of providing first, second, or other subordinated
244 mortgage loans or loan guarantees to sponsors, including for-
245 profit, nonprofit, and public entities, to provide housing
246 affordable to very-low-income persons.
247 (6) On all state apartment incentive loans, except loans
248 made to housing communities for the elderly to provide for
249 lifesafety, building preservation, health, sanitation, or
250 security-related repairs or improvements, the following
251 provisions shall apply:
252 (c) The corporation shall provide by rule for the
253 establishment of a review committee for the competitive
254 evaluation and selection of applications submitted in this
255 program. The review committee must use evaluation criteria that
256 include, including, but are not limited to, the following
257 criteria:
258 1. Tenant income and demographic targeting objectives of
259 the corporation.
260 2. Targeting objectives of the corporation which will
261 ensure an equitable distribution of loans between rural and
262 urban areas.
263 3. Sponsor's agreement to reserve the units for persons or
264 families who have incomes below 50 percent of the state or local
265 median income, whichever is higher, for a time period that
266 exceeds the minimum required by federal law or this part.
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267 4. Sponsor's agreement to reserve more than:
268 a. Twenty percent of the units in the project for persons
269 or families who have incomes that do not exceed 50 percent of
270 the state or local median income, whichever is higher; or
271 b. Forty percent of the units in the project for persons
272 or families who have incomes that do not exceed 60 percent of
273 the state or local median income, whichever is higher, without
274 requiring a greater amount of the loans as provided in this
275 section.
276 5. Provision for tenant counseling.
277 6. Sponsor's agreement to accept rental assistance
278 certificates or vouchers as payment for rent.
279 7. Projects requiring the least amount of a state
280 apartment incentive loan compared to overall project cost,
281 except that the share of the loan attributable to units serving
282 extremely-low-income persons must be excluded from this
283 requirement.
284 8. Local government contributions and local government
285 comprehensive planning and activities that promote affordable
286 housing and policies that promote access to public
287 transportation, reduce the need for onsite parking, and expedite
288 permits for affordable housing projects.
289 9. Project feasibility.
290 10. Economic viability of the project.
291 11. Commitment of first mortgage financing.
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292 12. Sponsor's prior experience. This criterion may not
293 require a sponsor to have prior experience with the corporation
294 to qualify for financing under the program.
295 13. Sponsor's ability to proceed with construction.
296 14. Projects that directly implement or assist welfare-to-
297 work transitioning.
298 15. Projects that reserve units for extremely-low-income
299 persons.
300 16. Projects that include green building principles,
301 storm-resistant construction, or other elements that reduce
302 long-term costs relating to maintenance, utilities, or
303 insurance.
304 17. Job-creation rate of the developer and general
305 contractor, as provided ins. 420.507(47).
306 Section 12. Section 420.5095, Florida Statutes, is amended
307 to read:
308 420.5095 Community Workforce Housing Loan Innovation Pilot
309 Program.-
310 (1) The Legislature finds and declares that recent rapid
311 increases in the median purchase price of a home and the cost of
312 rental housing have far outstripped the increases in median
313 income in the state, preventing essential services personnel
314 from living in the communities where they serve and thereby
315 creating the need for innovative solutions for the provision of
316 housing opportunities for essential services personnel.
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317 (2) The Community Workforce Housing Loan Innovation Pilot
318 Program is created to provide affordable rental and home
319 ownership community workforce housing for persons essential
320 services personnel affected by the high cost of housing, using
321 regulatory incentives and state and local funds to promote local
322 public private partnerships and leverage government and private
323 resources.
324 (3) For purposes of this section, the term+
325 +a+ "workforce housing" means housing affordable to
326 natural persons or families whose total annual household income
327 does not exceed 80 ±44 percent of the area median income,
328 adjusted for household size, or 120 -l--§..G- percent of area median
329 income, adjusted for household size, in areas of critical state
330 concern designated under s. 380.05, for which the Legislature
331 has declared its intent to provide affordable housing, and areas
332 that were designated as areas of critical state concern for at
333 least 20 consecutive years before prior to removal of the
334 designation.
335 (b) "Public private partnership" means any form of
336 business entity that includes substantial involvement of at
337 least one county, one municipality, or one public sector entity,
338 such as a school district or other unit of local government in
339 which the project is to be located, and at least one private
340 sector for profit or not for profit business or charitable
341 entity, and may be any form of business entity, including a
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342 joint venture or contractual agreement.
343 (4) The Florida Housing Finance Corporation may 4:-s-
344 authorized to provide loans under the Community Workforce
345 Housing Innovation Pilot program loans to applicants aft
346 applicant for construction or rehabilitation of workforce
347 housing in eligible areas. This funding is intended to be used
348 with other public and private sector resources.
349 (5) The corporation shall establish a loan application
350 process under s. 420.5087 by rule which includes selection
351 criteria, an application review process, and a funding process.
352 The corporation shall also establish an application review
353 committee that may include up to three private citizens
354 representing the areas of housing or real estate development,
355 banking, community planning, or other areas related to the
356 development or financing of worlcforce and affordable housing.
357 (a) The selection criteria and application review process
358 must include a procedure for curing errors in the loan
359 applications which do not make a substantial change to the
360 proposed project.
361 (b) To achieve the goals of the pilot program, the
362 application review committee may approve or reject loan
363 applications or responses to questions raised during the review
364 of an application due to the insufficiency of information
365 provided.
366 (c) The application review committee shall make
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367 recofflff1.endations concerning program participation and funding to
368 the corporation's board of directors.
369 (d) The board of directors shall approve or reject loan
370 applications, determine the tentative loan amount available to
371 each applicant, and rank all approved applications.
372 (e) The board of directors shall decide which approved
373 applicants will become program participants and determine the
374 maximum loan amount for each program participant.
375 (6) The corporation shall provide incentives for local
376 governments in eligible areas to use local affordable housing
377 funds, such as those from the State Housing Initiatives
378 Partnership Program, to assist in meeting the affordable housing
379 needs of persons eligible under this program. Local governments
380 are authorized to use State Housing Initiative Partnership
381 Program funds for persons or families whose total annual
382 household income does not eJrceed:
383 (a) One hundred and forty percent of the area median
384 income, adjusted for household size; or
385 (b) One hundred and fifty percent of the area median
386 income, adjusted for household size, in areas that were
387 designated as areas of critical state concern for at least 20
388 consecutive years prior to the removal of the designation and in
389 areas of critical state concern, designated under s. 380.05, for
390 which the Legislature has declared its intent to provide
391 affordable housing.
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392 (7) Funding shall be targeted to innovative projects in
393 areas where the disparity between the area median income and the
394 median sales price for a single family home is greatest, and
395 where population growth as a percentage rate of increase is
396 greatest. The corporation may also fund projects in areas \Jhere
397 innovative regulatory and financial incentives are made
398 available. The corporation shall fund at least one eligible
399 project in as many counties and regions of the state as is
400 practicable, consistent with program goals.
401 J...§l-f-8-t Projects must be given shall receive priority
402 consideration for funding if where:
403 (a) The local jurisdiction has adopted, or is committed to
404 adopting, appropriate regulatory incentives, or the local
405 jurisdiction or public private partnership has adopted or is
406 committed to adopting local contributions or financial
407 strategies, or other funding sources to promote the development
408 and ongoing financial viability of such projects. Local
409 incentives include such actions as expediting review of
410 development orders and permits, supporting development near
411 transportation hubs and major employment centers, and adopting
412 land development regulations designed to allow flexibility in
413 densities, use of accessory units, mixed-use developments, and
414 flexible lot configurations. Financial strategies include such
415 actions as promoting employer-assisted housing programs,
416 providing tax increment financing, and providing land.
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417 (b) Projects are innovative and include new construction
418 or rehabilitation; mi}{ed income housing; commercial and housing
419 mixed use elements; innovative design; green building
420 principles; storm resistant construction; or other elements that
421 reduce long term costs relating to maintenance, utilities, or
422 insurance and promote homeownership. The program funding may not
423 eHceed the costs attributable to the portion of the project that
424 is set aside to provide housing for the targeted population.
425 (b)-fet The projects -t-h-a-t- set aside at least 50 at least 80
426 percent of the units for workforce housing and at least 50
427 percent for essential services personnel and for projects that
428 require the least amount of program funding compared to the
429 overall housing costs for the project.
430 (9) Hotwithstanding s. 163.3184 (4) (b) (d), any local
431 government comprehensive plan amendment to implement a Community
432 Workforce Housing Innovation Pilot Program project found
433 consistent with this section shall be e}{pedited as provided in
434 this subsection. At least 30 days prior to adopting a plan
435 amendment under this subsection, the local government shall
436 notify the state land planning agency of its intent to adopt
437 such an amendment, and the notice shall include its evaluation
438 related to site suitability and availability of facilities and
439 services. The public notice of the hearing required bys.
440 163.3184(11) (b)2. shall include a statement that the local
441 government intends to use the e}{pedited adoption process
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442 authorized by this subsection. Such am.endm.ents shall require
443 only a single public hearing before the governing board, which
444 shall be an adoption hearing as described in s. 163. 318 4 ( 4) ( e) .
445 Any further proceedings shall be governed bys. 163.3184(5)
446 (13).
447 (10) The processing of approvals of development orders or
448 development perm.its, as defined ins. 163.3164, for innovative
449 comm.unity workforce housing projects shall be expedited.
450 J...2.l-f-1-±+ The corporation shall award loans w i t h ~
451 interest rates set at 1 to 3 percent interest rate for a term
452 that does not exceed 15 years, which m.ay be m.ade forgivable when
453 long term. affordability is provided and when at least 80 percent
454 of the units are set aside for worlcforce housing and at least 50
455 percent of the units are set aside for essential services
456 personnel.
457 (12) All eligible applications shall:
458 (a) For hom.e ownership, limit the sales price of a
459 detached unit, townhom.e, or condominium. unit to not m.ore than 90
4 60 percent of the median sales price for that type of unit in that
4 61 county, or the statewide median sales price for that type of
462 unit, whichever is higher, and require that all eligible
463 purchasers of hom.e ownership units occupy the hem.es as their
464 primary residence.
465 (b) For rental units, restrict rents for all workforce
466 housing serving those with incomes at or below 120 percent of
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467 area median income at the appropriate income level using the
468 restricted rents for the federal low income housing tax credit
469 program and, for workforce housing units serving those with
470 incomes above 120 percent of area median income, restrict rents
471 to those established by the corporation, not to eJcceed 30
472 percent of the maJcimum household income adjusted to unit size.
473 (c) Demonstrate that the applicant is a public private
474 partnership in an agreement, contract, partnership agreement,
475 memorandum of understanding, or other written instrument signed
476 by all the project partners.
477 (d) Have grants, donations of land, or contributions from
478 the public private partnership or other sources collectively
479 totaling at least 10 percent of the total development cost or $2
480 million, whichever is less. Such grants, donations of land, or
481 contributions must be evidenced by a letter of commitment,
482 agreement, contract, deed, memorandum of understanding, or other
483 written instrument at the time of application. Grants, donations
484 of land, or contributions in encess of 10 percent of the
485 development cost shall increase the application score.
486 (e) Demonstrate how the applicant will use the regulatory
487 incentives and financial strategies outlined in subsection (8)
488 from the local jurisdiction in which the proposed project is to
489 be located. The corporation may consult with the Department of
490 Economic Opportunity in evaluating the use of regulatory
491 incentives by applicants.
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4 92 (f) Demonstrate that the applicant possesses title to or
493 site control of land and evidences availability of required
4 94 infrastructure.
495 (g) Demonstrate the applicant's affordable housing
496 development and management e1cperience.
4 97 (h) Provide any research or facts available supporting the
498 demand and need for rental or home ownership worlcforce housing
499 for eligible persons in the market in which the project is
500 proposed.
501 (13) Projects may include manufactured housing constructed
502 after June 1994 and installed in accordance with mobile home
503 installation standards of the Department of Highway Safety and
504 Motor Vehicles.
505 J...Ql-B-4+ The corporation may adopt rules pursuant toss.
506 120.536(1) and 120.54 to implement this section.
507 ( 15) The corporation may use a ma1cimum of 2 percent of the
508 annual program appropriation for administration and compliance
509 monitoring.
510 (16) The corporation shall review the success of the Community
511 Worlcforce Housing Innovation Pilot Program to ascertain whether
512 the projects financed by the program are useful in meeting the
513 housing needs of eligible areas and shall include its findings
514 in the annual report required under s. 420.511(3).
515 Section 13. Section 420.531, Florida Statutes, is amended
516 to read:
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517 420.531 Affordable Housing Catalyst Program.-
518 (1) The corporation shall operate the Affordable Housing
519 Catalyst Program for the purpose of securing the expertise
520 necessary to provide specialized technical support to local
521 governments and community-based organizations to implement the
522 HOME Investment Partnership Program, State Apartment Incentive
523 Loan Program, State Housing Initiatives Partnership Program, and
524 other affordable housing programs. To the maximum extent
525 feasible, the entity to provide the necessary expertise must be
526 recognized by the Internal Revenue Service as a nonprofit tax-
527 exempt organization. It must have as its primary mission the
528 provision of affordable housing training and technical
529 assistance, an ability to provide training and technical
530 assistance statewide, and a proven track record of successfully
531 providing training and technical assistance under the Affordable
532 Housing Catalyst Program. The technical support shall, at a
533 minimum, include training relating to the following key elements
534 of the partnership programs:
535 ~+±+ Formation of local and regional housing
536 partnerships as a means of bringing together resources to
537 provide affordable housing.
538 JEl_-f-2+ Implementation of regulatory reforms to reduce the
539 risk and cost of developing affordable housing.
540 ~-f-3+ Implementation of affordable housing programs
541 included in local government comprehensive plans.
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542 (d)-f-4+ Compliance with requirements of federally funded
543 housing programs.
544 (2) In consultation with the corporation, the entity
545 providing statewide training and technical assistance shall
546 convene and administer biannual regional workshops for the
547 locally elected officials serving on affordable housing advisory
548 committees as provided ins. 420.9076. The regional workshops
549 may be conducted through teleconferencing or other technological
550 means and must include processes and programming that facilitate
551 peer-to-peer identification and sharing of best affordable
552 housing practices among the locally elected officials. Annually,
553 the entity providing statewide training and technical assistance
554 must compile calendar year reports summarizing the
555 deliberations, actions, and recommendations of each region, as
556 well as the attendance records of locally elected officials, and
557 must submit such reports to the President of the Senate, the
558 Speaker of the House of Representatives, and the corporation by
559 March 31 of the following year.
560 Section 14. Subsection (2) of section 420.9071, Florida
561 Statutes, is amended to read:
562 420.9071 Definitions.-As used in ss. 420.907-420.9079, the
563 term:
564 (2) "Affordable" means that monthly rents or monthly
565 mortgage payments including taxes and insurance do not exceed 30
566 percent of that amount which represents the percentage of the
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Amendment No. 1
567 median annual gross income for the households as indicated in
568 subsection (19), subsection (20), or subsection (28). However,
569 it is not the intent to limit an individual household's ability
570 to devote more than 30 percent of its income for housing, and
571 housing for which a household devotes more than 30 percent of
572 its income shall be deemed affordable if the first institutional
573 mortgage lender is satisfied that the household can afford
574 mortgage payments in excess of the 30 percent benchmark. The
575 term also includes housing provided by a not-for-profit
576 corporation that derives at least 75 percent of its annual
577 revenues from contracts or services provided to a state or
578 federal agency, for low-income persons and low-income households
579 that provides treatment for persons who suffer from mental
580 health, substance abuse, or domestic violence; and that provides
581 on-premises social and community support services including, job
582 training, life skills training, alcohol and substance abuse
583 disorder treatment, child care, and client case management
584 services.
585 Section 15. Subsection (7) of section 420.9073, Florida
586 Statutes, is renumbered as subsection (8), and a new subsection
587 (7) is added to that section to read:
588 420.9073 Local housing distributions.-
589 (7) Notwithstanding subsections (1)-(4), the corporation
590 may withhold up to 5 percent of the total amount distributed
591 each fiscal year from the Local Government Housing Trust Fund to
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592 provide additional funding to counties and eligible
593 municipalities for the construction of transitional housing for
594 persons aging out of foster care. Funds may not be used for the
595 design or planning of transitional housing and the housing must
596 be constructed on campus that provides housing for persons in
597 foster care or persons aging out of foster care pursuant to s.
598 409.1451. The corporation must consult with the Department of
599 Children and Families to create minimum criteria for such
600 housing. Any portion of the withheld funds not distributed or
601 committed by the end of the fiscal year shall be distributed as
602 provided in subsections (1) and (2).
603 Section 16. Paragraph (a) of subsection (4) of section
604 420.9075, Florida Statutes, is amended, and paragraph (j) is
605 added to subsection (10) of that section, to read:
606 420.9075 Local housing assistance plans; partnerships.-
607 (4) Each local housing assistance plan is governed by the
608 following criteria and administrative procedures:
609 (a) Each county, eligible municipality, or entity formed
610 through interlocal agreement to participate in the State Housing
611 Initiatives Partnership Program must develop a qualification
612 system and selection criteria for applications for awards by
613 eligible sponsors, adopt criteria for the selection of eligible
614 persons, and adopt a maximum award schedule or system of amounts
615 consistent with the intent and budget of its local housing
616 assistance plan, with ss. 420.907-420.9079, and with corporation
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617 rule. The selection criteria must provide priority to applicants
618 who need less assistance so as to maximize the total number of
619 applicants who may receive an award under the program.
620 (10) Each county or eligible municipality shall submit to
621 the corporation by September 15 of each year a report of its
622 affordable housing programs and accomplishments through June 30
623 immediately preceding submittal of the report. The report shall
624 be certified as accurate and complete by the local government's
625 chief elected official or his or her designee. Transmittal of
626 the annual report by a county's or eligible municipality's chief
627 elected official, or his or her designee, certifies that the
628 local housing incentive strategies, or, if applicable, the local
629 housing incentive plan, have been implemented or are in the
630 process of being implemented pursuant to the adopted schedule
631 for implementation. The report must include, but is not limited
632 to:
633 (j} The number of affordable housing applications that
634 were submitted, the number of such applications that were
635 approved, and the number of such applications that were denied.
636 Section 17. Subsections (2) and (4) of section 420.9076,
637 Florida Statutes, are amended, and subsection (10) is added to
638 that section, to read:
639 420.9076 Adoption of affordable housing incentive
640 strategies; committees.-
641 (2) The governing board of a county or municipality shall
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Amendment No. 1
642 appoint the members of the affordable housing advisory
643 committee. Pursuant to the terms of any interlocal agreement, a
644 county and municipality may create and jointly appoint an
645 advisory committee. The local action adopted pursuant to s.
646 420.9072 which creates the advisory committee and appoints the
647 advisory committee members must name at least 8 but not more
648 than 11 committee members and specify their terms. Effective
64 9 October 1, 2020, the committee must consist of one locally
650 elected official from each county or municipality participating
651 in the State Housing Initiatives Partnership Program and one
652 representative from at least six of the categories below:
653 (a) A citizen who is actively engaged in the residential
654 home building industry in connection with affordable housing.
655 (b) A citizen who is actively engaged in the banking or
656 mortgage banking industry in connection with affordable housing.
657 (c) A citizen who is a representative of those areas of
658 labor actively engaged in home building in connection with
659 affordable housing.
660 (d) A citizen who is actively engaged as an advocate for
661 low-income persons in connection with affordable housing.
662 ( e) A citizen who is actively engaged as a for-profit
663 provider of affordable housing.
664 (f) A citizen who is actively engaged as a not-for-profit
665 provider of affordable housing.
666 ( g) A citizen who is actively engaged as a real estate
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Amendment No. 1
667 professional in connection with affordable housing.
668 (h) A citizen who actively serves on the local planning
669 agency pursuant to s. 163.3174. If the local planning agency is
670 comprised of the governing board of the county or municipality,
671 the governing board may appoint a designee who is knowledgeable
672 in the local planning process.
673 (i) A citizen who resides within the jurisdiction of the
674 local governing body making the appointments.
675 (j) A citizen who represents employers within the
676 jurisdiction.
677 (k) A citizen who represents essential services personnel,
678 as defined in the local housing assistance plan.
679 (4) Annually Triennially, the advisory committee shall
680 review the established policies and procedures, ordinances, land
681 development regulations, and adopted local government
682 comprehensive plan of the appointing local government and shall
683 recommend specific actions or initiatives to encourage or
684 facilitate affordable housing while protecting the ability of
685 the property to appreciate in value. The recommendations may
686 include the modification or repeal of existing policies,
687 procedures, ordinances, regulations, or plan provisions; the
688 creation of exceptions applicable to affordable housing; or the
689 adoption of new policies, procedures, regulations, ordinances,
690 or plan provisions, including recommendations to amend the local
691 government comprehensive plan and corresponding regulations,
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Amendment No. 1
692 ordinances, and other policies. At a minimum, each advisory
693 committee shall submit an annual a report to the local governing
694 body and to the entity providing statewide training and
695 technical assistance for the Affordable Housing Catalyst Program
696 which -Hta-t- includes recommendations on, and triennially
697 thereafter evaluates the implementation ofT affordable housing
698 incentives in the following areas:
699 (a) The processing of approvals of development orders or
700 permits for affordable housing projects is expedited to a
701 greater degree than other projects, as provided ins.
702 163.3177(6) (f)3.
703 (b) All allowable fee waivers provided The modification of
704 impact fee requirements, including reduction or waiver of fees
705 and alternative methods of fee payment for the development or
706 construction of affordable housing.
707 (c) The allowance of flexibility in densities for
708 affordable housing.
709 (d) The reservation of infrastructure capacity for housing
710 for very-low-income persons, low-income persons, and moderate-
711 income persons.
712 (e) The allowance of Affordable accessory residential
713 units in residential zoning districts.
714 (f) The reduction of parking and setback requirements for
715 affordable housing.
716 (g) The allowance of flexible lot configurations,
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717 including zero-lot-line configurations for affordable housing.
718 (h) The modification of street requirements for affordable
719 housing.
720 (i) The establishment of a process by which a local
721 government considers, before adoption, policies, procedures,
722 ordinances, regulations, or plan provisions that increase the
723 cost of housing.
724 (j) The preparation of a printed inventory of locally
725 owned public lands suitable for affordable housing.
726 (k) The support of development near transportation hubs
727 and major employment centers and mixed-use developments.
728
729 The advisory committee recommendations may also include other
730 affordable housing incentives identified by the advisory
731 committee. Local governments that receive the minimum allocation
732 under the State Housing Initiatives Partnership Program shall
733 perform a n ~ initial review but may elect to not perform the
734 annual triennial review.
735 (10) The locally elected official serving on an advisory
736 committee, or a locally elected designee, must attend biannual
737 regional workshops convened and administered under the
738 Affordable Housing Catalyst Program as provided ins.
739 420.531(2). If the locally elected official or locally elected
740 designee fails to attend three consecutive regional workshops,
741 the corporation may withhold funds pending the person's
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Amendment No. 1
742 attendance at the next regularly scheduled biannual meeting.
743 Section 18. Subsection (18) of section 553.791, Florida
744 Statutes, is amended to read:
745 553.791 Alternative plans review and inspection.-
746 (18) Each local building code enforcement agency may audit
747 the performance of building code inspection services by private
748 providers operating within the local jurisdiction. However, a
749 building or structure the same private provider may not be
750 audited more than four times in a calendar year unless the local
751 building official determines a condition of the a building or
752 structure constitutes an immediate threat to public safety and
753 welfare. Work on a building or structure may proceed after
754 inspection and approval by a private provider if the provider
755 has given notice of the inspection pursuant to subsection (9)
756 and, subsequent to such inspection and approval, the work shall
757 not be delayed for completion of an inspection audit by the
758 local building code enforcement agency.
759 Section 19. Subsection (4) of section 723.011, Florida
760 Statutes, is amended to read:
761 723.011 Disclosure prior to rental of a mobile home lot;
762 prospectus, filing, approval.-
763 (4) With regard to a tenancy in existence on the effective
764 date of this chapter, the prospectus or offering circular
765 offered by the mobile home park owner must shall contain the
766 same terms and conditions as rental agreements offered to all
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Amendment No. 1
767 other mobile home owners residing in the park on the effective
768 date of this act, excepting only rent variations based upon lot
769 location and size, and may shall not require any mobile home
770 owner to install any permanent improvements, except that the
771 mobile home owner may be required to install permanent
772 improvements to the mobile home as disclosed in the prospectus.
773 Section 20. Subsection (5) of section 723.012, Florida
774 Statutes, is amended to read:
775 723.012 Prospectus or offering circular.-The prospectus or
776 offering circular, which is required to be provided bys.
777 723.011, must contain the following information:
778 (5) A description of the recreational and other common
779 facilities, if any, that will be used by the mobile home owners,
780 including, but not limited to:
781 (a) The number of buildings and each room thereof and its
782 intended purposes, location, approximate floor area, and
783 capacity in numbers of people.
784 (b) Each swimming pool, as to its general location,
785 approximate size and depths, and approximate deck size and
786 capacity and whether heated.
787 (c) All other facilities and permanent improvements that
788 which will serve the mobile home owners.
789 (d) A general description of the items of personal
790 property available for use by the mobile home owners.
791 (e) A general description of the days and hours that
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792 facilities will be available for use.
793 (f) A statement as to whether all improvements are
794 complete and, if not, their estimated completion dates.
795
796 If a mobile home park owner intends to include additional
797 property and mobile home lots and to increase the number of lots
798 that will use the shared facilities of the park, the mobile home
799 park owner must amend the prospectus to disclose such additions.
800 If the number of mobile home lots in the park increases by more
801 than 15 percent of the total number of lots in the original
802 prospectus, the mobile home park owner must reasonably offset
803 the impact of the additional lots by increasing the shared
804 facilities. The amendment to the prospectus must include a
805 reasonable timeframe for providing the required additional
806 shared facilities. The costs and expenses necessary to increase
807 the shared facilities may not be passed on or passed through to
808 the existing mobile home owners.
809 Section 21. Section 723.023, Florida Statutes, is amended
810 to read:
811 723.023 Mobile home owner's general obligations.-A mobile
812 home owner shall at all times:
813 (1) At all times comply with all obligations imposed on
814 mobile home owners by applicable provisions of building,
815 housing, and health codes, including compliance with all
816 building permits and construction requirements for construction
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Amendment No. 1
817 on the mobile home and lot. The home owner is responsible for
818 all fines imposed by the local government for noncompliance with
819 any local codes.
820 (2) At all times keep the mobile home lot that which he or
821 she occupies clean, neat, and sanitary, and maintained in
822 compliance with all local codes.
823 (3) At all times comply with properly promulgated park
824 rules and regulations and require other persons on the premises
825 with his or her consent to comply with such rules and to conduct
826 themselves, and other persons on the premises with his or her
827 consent, in a manner that does not unreasonably disturb other
828 residents of the park or constitute a breach of the peace.
829 (4) Receive written approval from the mobile home park
830 owner before making any exterior modification or addition to the
831 home.
832 (5) When vacating the premises, remove any debris and
833 other property of any kind which is left on the mobile home lot.
834 Section 22. Subsection (5) of section 723.031, Florida
835 Statutes, is amended to read:
836 723.031 Mobile home lot rental agreements.-
837 (5) The rental agreement must shall contain the lot rental
838 amount and services included. An increase in lot rental amount
839 upon expiration of the term of the lot rental agreement must
840 shall be in accordance with ss. 723.033 and 723.037 ors.
841 723.059(4), whichever is applicable~7 provided that, pursuant to
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Amendment No. 1
842 s. 723.059(4), the amount of the lot rental increase is
843 disclosed and agreed to by the purchaser, in writing. An
844 increase in lot rental amount shall not be arbitrary or
845 discriminatory between similarly situated tenants in the park. A
846 lot rental amount may not be increased during the term of the
847 lot rental agreement, except:
848 (a) When the manner of the increase is disclosed in a lot
849 rental agreement with a term exceeding 12 months and which
850 provides for such increases not more frequently than annually.
851 (b) For pass-through charges as defined ins. 723.003.
852 (c) That a charge may not be collected which results in
853 payment of money for sums previously collected as part of the
854 lot rental amount. The provisions hereof notwithstanding, the
855 mobile home park owner may pass on, at any time during the term
856 of the lot rental agreement, ad valorem property taxes, non-ad
857 valorem assessments, and utility charges, or increases of
858 either, provided that the ad valorem property taxes, non-ad
859 valorem assessments, and utility charges are not otherwise being
860 collected in the remainder of the lot rental amount and provided
861 further that the passing on of such ad valorem taxes, non-ad
862 valorem assessments, or utility charges, or increases of either,
863 was disclosed prior to tenancy, was being passed on as a matter
864 of custom between the mobile home park owner and the mobile home
865 owner, or such passing on was authorized by law. A park owner is
866 deemed to have disclosed the passing on of ad valorem property
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Amendment No. 1
867 taxes and non-ad valorem assessments if ad valorem property
868 taxes or non-ad valorem assessments were disclosed as a separate
869 charge or a factor for increasing the lot rental amount in the
870 prospectus or rental agreement. Such ad valorem taxes, non-ad
871 valorem assessments, and utility charges shall be a part of the
872 lot rental amount as defined by this chapter. The term "non-ad
873 valorem assessments" has the same meaning as provided ins.
874 197.3632(1) (d). Other provisions of this chapter
875 notwithstanding, pass-on charges may be passed on only within 1
876 year of the date a mobile home park owner remits payment of the
877 charge. A mobile home park owner is prohibited from passing on
878 any fine, interest, fee, or increase in a charge resulting from
879 a park owner's payment of the charge after the date such charges
880 become delinquent. A mobile home park owner is prohibited from
881 charging or collecting from the mobile home owners any sum for
882 ad valorem taxes or non-ad valorem tax charges in an amount in
883 excess of the sums remitted by the park owner to the tax
884 collector. Nothing herein shall prohibit a park owner and a
885 homeowner from mutually agreeing to an alternative manner of
886 payment to the park owner of the charges.
887 (d) If a notice of increase in lot rental amount is not
888 given 90 days before the renewal date of the rental agreement,
889 the rental agreement must remain under the same terms until a
890 90-day notice of increase in lot rental amount is given. The
891 notice may provide for a rental term shorter than 1 year in
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Amendment No. 1
892 order to maintain the same renewal date.
893 Section 23. Subsection (1) and paragraph (a) of subsection
894 (4) of section 723.037, Florida Statutes, are amended to read:
895 723.037 Lot rental increases; reduction in services or
896 utilities; change in rules and regulations; mediation.-
897 (1) A park owner shall give written notice to each
898 affected mobile home owner and the board of directors of the
899 homeowners' association, if one has been formed, at least 90
900 days before any increase in lot rental amount or reduction in
901 services or utilities provided by the park owner or change in
902 rules and regulations. The park owner may give notice of all
903 increases in lot rental amount for multiple anniversary dates in
904 the same 90-day notice. The notice must shall identify all other
905 affected homeowners, which may be by lot number, name, group, or
906 phase. If the affected homeowners are not identified by name,
907 the park owner shall make the names and addresses available upon
908 request. However, this requirement does not authorize the
909 release of the names, addresses, or other private information
910 about the homeowners to the association or any other person for
911 any other purpose. The home owner's right to the 90-day notice
912 may not be waived or precluded by a home owner, or the
913 homeowners' committee, in an agreement with the park owner.
914 Rules adopted as a result of restrictions imposed by
915 governmental entities and required to protect the public health,
916 safety, and welfare may be enforced prior to the expiration of
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Amendment No. 1
917 the 90-day period but are not otherwise exempt from the
918 requirements of this chapter. Pass-through charges must be
919 separately listed as to the amount of the charge, the name of
920 the governmental entity mandating the capital improvement, and
921 the nature or type of the pass-through charge being levied.
922 Notices of increase in the lot rental amount due to a pass-
923 through charge must shall state the additional payment and
924 starting and ending dates of each pass-through charge. The
925 homeowners' association shall have no standing to challenge the
926 increase in lot rental amount, reduction in services or
927 utilities, or change of rules and regulations unless a majority
928 of the affected homeowners agree, in writing, to such
929 representation.
930 (4) (a) A committee, not to exceed five in number,
931 designated by a majority of the affected mobile home owners or
932 by the board of directors of the homeowners' association, if
933 applicable, and the park owner shall meet, at a mutually
934 convenient time and place no later than 60 days before the
935 effective date of the change to discuss the reasons for the
936 increase in lot rental amount, reduction in services or
937 utilities, or change in rules and regulations. The negotiating
938 committee shall make a written request for a meeting with the
939 park owner or subdivision developer to discuss those matters
940 addressed in the 90-day notice, and may include in the request a
941 listing of any other issue, with supporting documentation, that
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Amendment No. 1
942 the committee intends to raise and discuss at the meeting. The
943 committee shall address all lot rental amount increases that are
944 specified in the notice of lot rental amount increase,
945 regardless of the effective date of the increase.
946
947 This subsection is not intended to be enforced by civil or
948 administrative action. Rather, the meetings and discussions are
949 intended to be in the nature of settlement discussions prior to
950 the parties proceeding to mediation of any dispute.
951 Section 24. Subsections (5) and (6) are added to section
952 723.041, Florida Statutes, to read:
953 723.041 Entrance fees; refunds; exit fees prohibited;
954 replacement homes.-
955 (5) A mobile home park that is damaged or destroyed due to
956 wind, water, or other natural force may be rebuilt on the same
957 site with the same density as was approved, permitted, and built
958 before the park was damaged or destroyed.
959 (6) This section does not limit the regulation of the
960 uniform firesafety standards established under s. 633.206, but
961 supersedes any other density, separation, setback, or lot size
962 regulation adopted after initial permitting and construction of
963 the mobile home park.
964 Section 25. Section 723.042, Florida Statutes, is amended
965 to read:
966 723.042 Provision of improvements.-~ Ne person may not
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967 shall be required by a mobile home park owner or developer, as a
968 condition of residence in the mobile home park, to provide any
969 improvement unless the requirement is disclosed pursuant to s.
970 723.012(7) s. 723.011 prior to occupancy in the mobile home
971 park.
972 Section 26. Subsections (3) and (4) of section 723.059,
973 Florida Statutes, are amended to read:
974 723.059 Rights of Purchaser of a mobile home within a
975 mobile home park.-
976 (3) The purchaser of a mobile home who intends to become
977 becomes a resident of the mobile home park in accordance with
978 this section has the right to assume the remainder of the term
979 of any rental agreement then in effect between the mobile home
980 park owner and the seller and may assume the seller's
981 prospectus. However, nothing herein shall prohibit a mobile home
982 park owner from offering the purchaser of a mobile home any
983 approved prospectus shall be entitled to rely on the terms and
984 conditions of the prospectus or offering circular as delivered
985 to the initial recipient.
986 (4) However, nothing herein shall be construed to prohibit
987 a mobile home park owner from increasing the rental amount to be
988 paid by the purchaser upon the expiration of the assumed rental
989 agreement in an amount deemed appropriate by the mobile home
990 park owner, so long as such increase is disclosed to the
991 purchaser prior to his or her occupancy and is imposed in a
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992 manner consistent with the purchaser's initial offering circular
993 e-r prospectus and this act.
994 Section 27. Paragraph (d) of subsection (1) of section
995 723.061, Florida Statutes, is amended, and subsection (5) is
996 added to that section, to read:
997 723.061 Eviction; grounds, proceedings.-
998 (1) A mobile home park owner may evict a mobile home
999 owner, a mobile home tenant, a mobile home occupant, or a mobile
1000 home only on one or more of the following grounds:
1001 (d) Change in use of the land comprising the mobile home
1002 park, or the portion thereof from which mobile homes are to be
1003 evicted, from mobile home lot rentals to some other use, if:
1004 1. The park owner gives written notice to the homeowners'
1005 association formed and operating under ss. 723.075-723.079 of
1006 its right to purchase the mobile home park, if the land
1007 comprising the mobile home park is changing use from mobile home
1008 lot rentals to a different use, at the price and under the terms
1009 and conditions set forth in the written notice.
1010 a. The notice shall be delivered to the officers of the
1011 homeowners' association by United States mail. Within 45 days
1012 after the date of mailing of the notice, the homeowners'
1013 association may execute and deliver a contract to the park owner
1014 to purchase the mobile home park at the price and under the
1015 terms and conditions set forth in the notice. If the contract
1016 between the park owner and the homeowners' association is not
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1017 executed and delivered to the park owner within the 45-day
1018 period, the park owner is under no further obligation to the
1019 homeowners' association except as provided in sub-subparagraph
1020 b.
1021 b. If the park owner elects to offer or sell the mobile
1022 home park at a price lower than the price specified in her or
1023 his initial notice to the officers of the homeowners'
1024 association, the homeowners' association has an additional 10
1025 days to meet the revised price, terms, and conditions of the
1026 park owner by executing and delivering a revised contract to the
1027 park owner.
1028 c. The park owner is not obligated under this subparagraph
1029 ors. 723.071 to give any other notice to, or to further
1030 negotiate with, the homeowners' association for the sale of the
1031 mobile home park to the homeowners' association after 6 months
1032 after the date of the mailing of the initial notice under sub-
1033 subparagraph a.
1034 2. The park owner gives the affected mobile home owners
1035 and tenants at least 6 months' notice of the eviction due to the
1036 projected change in use and of their need to secure other
1037 accommodations. Within 20 days after giving an eviction notice
1038 to a mobile home owner, the park owner must provide the division
1039 with a copy of the notice. The division must provide the
1040 executive director of the Florida Mobile Home Relocation
1041 Corporation with a copy of the notice.
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1042 a. The notice of eviction due to a change in use of the
1043 land must include in a font no smaller than the body of the
1044 notice the following statement:
1045
1046 YOU MAY BE ENTITLED TO COMPENSATION FROM THE FLORIDA MOBILE HOME
1047 RELOCATION TRUST FUND, ADMINISTERED BY THE FLORIDA MOBILE HOME
1048 RELOCATION CORPORATION (FMHRC). FMHRC CONTACT INFORMATION IS
1049 AVAILABLE FROM THE FLORIDA DEPARTMENT OF BUSINESS AND
1050 PROFESSIONAL REGULATION.
1051
1052 b. The park owner may not give a notice of increase in lot
1053 rental amount within 90 days before giving notice of a change in
1054 use.
1055 (5) A park owner who accepts payment of any portion of the
1056 lot rental amount with actual knowledge of noncompliance after
1057 notice and termination of the rental agreement due to a
1058 violation under paragraph (1) (b), paragraph (1) (c), or paragraph
1059 (1) (e) does not waive the right to terminate the rental
1060 agreement or the right to bring a civil action for the
1061 noncompliance, but not for any subsequent or continuing
1062 noncompliance. Any rent so received must be accounted for at the
1063 final hearing.
1064 Section 28. Subsection (1) of section 723.076, Florida
1065 Statutes, is amended to read:
1066 723.076 Incorporation; notification of park owner.-
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1067 (1) Upon receipt of its certificate of incorporation, the
1068 homeowners' association shall notify the park owner in writing
1069 of such incorporation and shall advise the park owner of the
1070 names and addresses of the officers of the homeowners'
1071 association by personal delivery upon the park owner's
1072 representative as designated in the prospectus or by certified
1073 mail, return receipt requested. Thereafter, the homeowners'
1074 association shall notify the park owner in writing by certified
1075 mail, return receipt requested, of any change of names and
1076 addresses of its president or registered agent. Upon election or
1077 appointment of new officers or board members, the homeowners'
1078 association shall notify the park owner in writing by certified
1079 mail, return receipt requested, of the names and addresses of
1080 the new officers or board members.
1081 Section 29. Paragraphs (b) through (e) of subsection (2)
1082 of section 723.078, Florida Statutes, are amended, and paragraph
1083 (i) of that subsection is reenacted, to read:
1084 723.078 Bylaws of homeowners' associations.-
1085 (2) The bylaws shall provide and, if they do not, shall be
1086 deemed to include, the following provisions:
1087 (b) Quorum; voting requirements; proxies.-
1088 1. Unless otherwise provided in the bylaws, 30 percent of
1089 the total membership is required to constitute a quorum.
1090 Decisions shall be made by a majority of members represented at
1091 a meeting at which a quorum is present.
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1092 2.a. A member may not vote by general proxy but may vote
1093 by limited proxies substantially conforming to a limited proxy
1094 form adopted by the division. Limited proxies and general
1095 proxies may be used to establish a quorum. Limited proxies may
1096 be used for votes taken to amend the articles of incorporation
1097 or bylaws pursuant to this section, and any other matters for
1098 which this chapter requires or permits a vote of members~T
1099 except that no proxy, limited or general, may not be used in the
1100 election of board members in general elections or elections to
1101 fill vacancies caused by recall, resignation, or otherwise.
1102 Board members must be elected by written ballot or by voting in
1103 person. If a mobile home or subdivision lot is owned jointly,
1104 the owners of the mobile home or subdivision lot must be counted
1105 as one for the purpose of determining the number of votes
1106 required for a majority. Only one vote per mobile home or
1107 subdivision lot shall be counted. Any number greater than 50
1108 percent of the total number of votes constitutes a majority.
1109 Notwithstanding this section, members may vote in person at
1110 member meetings or by secret ballot, including absentee ballots,
1111 as defined by the division.
1112 b. Elections shall be decided by a plurality of the
1113 ballots cast. There is no quorum requirement; however, at least
1114 20 percent of the eligible voters must cast a ballot in order to
1115 have a valid election. A member may not allow any other person
1116 to cast his or her ballot, and any ballots improperly cast are
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1117 invalid. An election is not required unless there are more
1118 candidates nominated than vacancies that exist on the board.
1119 c. Each member or other eligible person who desires to be
1120 a candidate for the board of directors shall appear on the
1121 ballot in alphabetical order by surname. A ballot may not
1122 indicate if any of the candidates are incumbent on the board.
1123 All ballots must be uniform in appearance. Write-in candidates
1124 and more than one vote per candidate per ballot are not allowed.
1125 A ballot may not provide a space for the signature of, or any
1126 other means of identifying, a voter. If a ballot contains more
1127 votes than vacancies or fewer votes than vacancies, the ballot
1128 is invalid unless otherwise stated in the bylaws.
1129 d. An impartial committee shall be responsible for
1130 overseeing the election process and complying with all ballot
1131 requirements. For purposes of this section, the term "impartial
1132 committee" means a committee whose members do not include any of
1133 the following people or their spouses:
1134 (I) Current board members.
1135 (II) Current association officers.
1136 (III) Candidates for the association or board.
1137 e. The association bylaws shall provide a method for
1138 determining the winner of an election in which two or more
1139 candidates for the same position receive the same number of
1140 votes.
1141 f. The division shall adopt procedural rules to govern
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1142 elections, including, but not limited to, rules for providing
1143 notice by electronic transmission and rules for maintaining the
1144 secrecy of ballots.
1145 3. A proxy is effective only for the specific meeting for
1146 which originally given and any lawfully adjourned meetings
1147 thereof. In no event shall any proxy be valid for a period
1148 longer than 90 days after the date of the first meeting for
1149 which it was given. Every proxy shall be revocable at any time
1150 at the pleasure of the member executing it.
1151 4. A member of the board of directors or a committee may
1152 submit in writing his or her agreement or disagreement with any
1153 action taken at a meeting that the member did not attend. This
1154 agreement or disagreement may not be used as a vote for or
1155 against the action taken and may not be used for the purposes of
1156 creating a quorum.
1157 (c) Board of directors' and committee meetings.-
1158 1. Meetings of the board of directors and meetings of its
1159 committees at which a quorum is present shall be open to all
1160 members. Notwithstanding any other provision of law, the
1161 requirement that board meetings and committee meetings be open
1162 to the members does not apply to meetings between the park owner
1163 and the board of directors or any of the board's committees,
1164 board or committee meetings held for the purpose of discussing
1165 personnel matters~ or meetings between the board or a committee
1166 and the association's attorney, with respect to potential or
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1167 pending litigation, when where the meeting is held for the
1168 purpose of seeking or rendering legal advice, and when where the
1169 contents of the discussion would otherwise be governed by the
1170 attorney-client privilege. Notice of all meetings open to
1171 members shall be posted in a conspicuous place upon the park
1172 property at least 48 hours in advance, except in an emergency.
1173 Notice of any meeting in which dues assessments against members
1174 are to be considered for any reason shall specifically contain a
1175 statement that dues assessments will be considered and the
1176 nature of such dues assessments.
1177 2. A board or committee member's participation in a
1178 meeting via telephone, real-time videoconferencing, or similar
1179 real-time telephonic, electronic, or video communication counts
1180 toward a quorum, and such member may vote as if physically
1181 present. A speaker shall be used so that the conversation of
1182 those board or committee members attending by telephone may be
1183 heard by the board or committee members attending in person, as
1184 well as by members present at a meeting.
1185 3. Members of the board of directors may use e-mail as a
1186 means of communication but may not cast a vote on an association
1187 matter via e-mail.
1188 4. The right to attend meetings of the board of directors
1189 and its committees includes the right to speak at such meetings
1190 with reference to all designated agenda items. The association
1191 may adopt reasonable written rules governing the frequency,
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1192 duration, and manner of members' statements. Any item not
1193 included on the notice may be taken up on an emergency basis by
1194 at least a majority plus one of the members of the board. Such
1195 emergency action shall be noticed and ratified at the next
1196 regular meeting of the board. Any member may tape record or
1197 videotape meetings of the board of directors and its committees,
1198 except meetings between the board of directors or its appointed
1199 homeowners' committee and the park owner. The division shall
1200 adopt reasonable rules governing the tape recording and
1201 videotaping of the meeting.
1202 5. Except as provided in paragraph (i), a vacancy
1203 occurring on the board of directors may be filled by the
1204 affirmative vote of the majority of the remaining directors,
1205 even though the remaining directors constitute less than a
1206 quorum; by the sole remaining director; if the vacancy is not so
1207 filled or if no director remains, by the members; or, on the
1208 application of any person, by the circuit court of the county in
1209 which the registered office of the corporation is located.
1210 6. The term of a director elected or appointed to fill a
1211 vacancy expires at the next annual meeting at which directors
1212 are elected. A directorship to be filled by reason of an
1213 increase in the number of directors may be filled by the board
1214 of directors, but only for the term of office continuing until
1215 the next election of directors by the members.
1216 7. A vacancy that will occur at a specific later date, by
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Amendment No. 1
1217 reason of a resignation effective at a later date, may be filled
1218 before the vacancy occurs. However, the new director may not
1219 take office until the vacancy occurs.
1220 8.a. The officers and directors of the association have a
1221 fiduciary relationship to the members.
1222 b. A director and committee member shall discharge his or
1223 her duties in good faith, with the care an ordinarily prudent
1224 person in a like position would exercise under similar
1225 circumstances, and in a manner he or she reasonably believes to
1226 be in the best interests of the corporation.
1227 9. In discharging his or her duties, a director may rely
1228 on information, opinions, reports, or statements, including
1229 financial statements and other financial data, if prepared or
1230 presented by:
1231 a. One or more officers or employees of the corporation
1232 who the director reasonably believes to be reliable and
1233 competent in the matters presented;
1234 b. Legal counsel, public accountants, or other persons as
1235 to matters the director reasonably believes are within the
1236 persons' professional or expert competence; or
1237 c. A committee of the board of directors of which he or
1238 she is not a member if the director reasonably believes the
1239 committee merits confidence.
1240 10. A director is not acting in good faith if he or she
1241 has knowledge concerning the matter in question that makes
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1242 reliance otherwise permitted by subparagraph 9. unwarranted.
1243 11. A director is not liable for any action taken as a
1244 director, or any failure to take any action, if he or she
1245 performed the duties of his or her office in compliance with
1246 this section.
1247 (d) Member meetings.-Members shall meet at least once each
1248 calendar year, and the meeting shall be the annual meeting. All
1249 members of the board of directors shall be elected at the annual
1250 meeting unless the bylaws provide for staggered election terms
1251 or for their election at another meeting. The bylaws shall not
1252 restrict any member desiring to be a candidate for board
1253 membership from being nominated from the floor. All nominations
1254 from the floor must be made at a duly noticed meeting of the
1255 members held at least 27 3-& days before the annual meeting. The
1256 bylaws shall provide the method for calling the meetings of the
1257 members, including annual meetings. The method shall provide at
1258 least 14 days' written notice to each member in advance of the
1259 meeting and require the posting in a conspicuous place on the
1260 park property of a notice of the meeting at least 14 days prior
1261 to the meeting. The right to receive written notice of
1262 membership meetings may be waived in writing by a member. Unless
1263 waived, the notice of the annual meeting shall be mailed, hand
1264 delivered, or electronically transmitted to each member, and
1265 shall constitute notice. Unless otherwise stated in the bylaws,
1266 an officer of the association shall provide an affidavit
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1267 affirming that the notices were mailed~ e-r hand delivered~
1268 provided by electronic transmission in accordance with tl=re
1269 provisions of this section to each member at the address last
1270 furnished to the corporation. These meeting requirements do not
1271 prevent members from waiving notice of meetings or from acting
1272 by written agreement without meetings, if allowed by the bylaws.
1273 (e) Minutes of meetings.-
1274 1. Notwithstanding any other provision of law, the minutes
1275 of board or committee meetings that are closed to members are
1276 privileged and confidential and are not available for inspection
1277 or photocopying.
1278 2. Minutes of all meetings of members of an association
1279 and meetings open to members ofT the board of directorsT and a
1280 committee of the board must be maintained in written form and
1281 approved by the members, board, or committee, as applicable. A
1282 vote or abstention from voting on each matter voted upon for
1283 each director present at a board meeting must be recorded in the
1284 minutes.
1285 3.-&-;- All approved minutes of open meetings of members,
1286 committees, and the board of directors shall be kept in a
1287 businesslike manner and shall be available for inspection by
1288 members, or their authorized representatives, and board members
1289 at reasonable times. The association shall retain these minutes
1290 within this state for a period of at least~+ years.
1291 (i) Recall of board members.-Any member of the board of
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1292 directors may be recalled and removed from office with or
1293 without cause by the vote of or agreement in writing by a
1294 majority of all members. A special meeting of the members to
1295 recall a member or members of the board of directors may be
1296 called by 10 percent of the members giving notice of the meeting
1297 as required for a meeting of members, and the notice shall state
1298 the purpose of the meeting. Electronic transmission may not be
1299 used as a method of giving notice of a meeting called in whole
1300 or in part for this purpose.
1301 1. If the recall is approved by a majority of all members
1302 by a vote at a meeting, the recall is effective as provided in
1303 this paragraph. The board shall duly notice and hold a board
1304 meeting within 5 full business days after the adjournment of the
1305 member meeting to recall one or more board members. At the
1306 meeting, the board shall either certify the recall, in which
1307 case such member or members shall be recalled effective
1308 immediately and shall turn over to the board within 5 full
1309 business days any and all records and property of the
1310 association in their possession, or shall proceed under
1311 subparagraph 3.
1312 2. If the proposed recall is by an agreement in writing by
1313 a majority of all members, the agreement in writing or a copy
1314 thereof shall be served on the association by certified mail or
1315 by personal service in the manner authorized by chapter 48 and
1316 the Florida Rules of Civil Procedure. The board of directors
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1317 shall duly notice and hold a meeting of the board within 5 full
1318 business days after receipt of the agreement in writing. At the
1319 meeting, the board shall either certify the written agreement to
1320 recall members of the board, in which case such members shall be
1321 recalled effective immediately and shall turn over to the board,
1322 within 5 full business days, any and all records and property of
1323 the association in their possession, or shall proceed as
1324 described in subparagraph 3.
1325 3. If the board determines not to certify the written
1326 agreement to recall members of the board, or does not certify
1327 the recall by a vote at a meeting, the board shall, within 5
1328 full business days after the board meeting, file with the
1329 division a petition for binding arbitration pursuant to the
1330 procedures of s. 723.1255. For purposes of this paragraph, the
1331 members who voted at the meeting or who executed the agreement
1332 in writing shall constitute one party under the petition for
1333 arbitration. If the arbitrator certifies the recall of a member
1334 of the board, the recall shall be effective upon mailing of the
1335 final order of arbitration to the association. If the
1336 association fails to comply with the order of the arbitrator,
1337 the division may take action under s. 723.006. A member so
1338 recalled shall deliver to the board any and all records and
1339 property of the association in the member's possession within 5
1340 full business days after the effective date of the recall.
1341 4. If the board fails to duly notice and hold a board
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1342 meeting within 5 full business days after service of an
1343 agreement in writing or within 5 full business days after the
1344 adjournment of the members' recall meeting, the recall shall be
1345 deemed effective and the board members so recalled shall
1346 immediately turn over to the board all records and property of
1347 the association.
1348 5. If the board fails to duly notice and hold the required
1349 meeting or fails to file the required petition, the member's
1350 representative may file a petition pursuant to s. 723.1255
1351 challenging the board's failure to act. The petition must be
1352 filed within 60 days after expiration of the applicable 5-full-
1353 business-day period. The review of a petition under this
1354 subparagraph is limited to the sufficiency of service on the
1355 board and the facial validity of the written agreement or
1356 ballots filed.
1357 6. If a vacancy occurs on the board as a result of a
1358 recall and less than a majority of the board members are
1359 removed, the vacancy may be filled by the affirmative vote of a
1360 majority of the remaining directors, notwithstanding any other
1361 provision of this chapter. If vacancies occur on the board as a
1362 result of a recall and a majority or more of the board members
1363 are removed, the vacancies shall be filled in accordance with
1364 procedural rules to be adopted by the division, which rules need
1365 not be consistent with this chapter. The rules must provide
1366 procedures governing the conduct of the recall election as well
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1367 as the operation of the association during the period after a
1368 recall but before the recall election.
1369 7. A board member who has been recalled may file a
1370 petition pursuant to s. 723.1255 challenging the validity of the
1371 recall. The petition must be filed within 60 days after the
1372 recall is deemed certified. The association and the member's
1373 representative shall be named as the respondents.
1374 8. The division may not accept for filing a recall
1375 petition, whether or not filed pursuant to this subsection, and
1376 regardless of whether the recall was certified, when there are
1377 60 or fewer days until the scheduled reelection of the board
1378 member sought to be recalled or when 60 or fewer days have not
1379 elapsed since the election of the board member sought to be
1380 recalled.
1381 Section 30. Paragraphs (d) and (f) through (i) of
1382 subsection (4) and subsection (5) of section 723.079, Florida
1383 Statutes, are amended to read:
1384 723.079 Powers and duties of homeowners' association.-
1385 (4) The association shall maintain the following items,
1386 when applicable, which constitute the official records of the
1387 association:
1388 (d) The approved minutes of all meetings of the members of
1389 an association and meetings open for members of, the board of
1390 directors, and committees of the board, which minutes must be
1391 retained within this 'HT€- state for at least 5 ~ years.
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1392 (f) All of the association's insurance policies or copies
1393 thereof, which must be retained within this state for at least 5
1394 + years after the expiration date of the policy.
1395 (g) A copy of all contracts or agreements to which the
1396 association is a party, including, without limitation, any
1397 written agreements with the park owner, lease, or other
1398 agreements or contracts under which the association or its
1399 members has any obligation or responsibility, which must be
1400 retained within this state for at least~+ years after the
1401 expiration date of the contract or agreement.
1402 (h) The financial and accounting records of the
1403 association, kept according to good accounting practices. All
1404 financial and accounting records must be maintained within this
1405 state for a period of at least 5 + years. The financial and
1406 accounting records must include:
1407 1. Accurate, itemized, and detailed records of all
1408 receipts and expenditures.
1409 2. A current account and a periodic statement of the
1410 account for each member, designating the name and current
1411 address of each member who is obligated to pay dues or
1412 assessments, the due date and amount of each assessment or other
1413 charge against the member, the date and amount of each payment
1414 on the account, and the balance due.
1415 3. All tax returns, financial statements, and financial
1416 reports of the association.
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1417 4. Any other records that identify, measure, record, or
1418 communicate financial information.
1419 (i) All other written records of the association not
1420 specifically included in the foregoing which are related to the
1421 operation of the association must be retained within this state
1422 for at least 5 years or at least 5 years after the expiration
1423 date, as applicable.
1424 (5) The official records shall be maintained within the
1425 state for at least 7 years and shall be made available to a
1426 member for inspection or photocopying within 20 ±G- business days
1427 after receipt by the board or its designee of a written request
1428 submitted by certified mail, return receipt requested. The
1429 requirements of this subsection are satisfied by having a copy
1430 of the official records available for inspection or copying in
1431 the park or, at the option of the association, by making the
1432 records available to a member electronically via the Internet or
1433 by allowing the records to be viewed in electronic format on a
1434 computer screen and printed upon request. If the association has
1435 a photocopy machine available where the records are maintained,
1436 it must provide a member with copies on request during the
1437 inspection if the entire request is no more than 25 pages. An
1438 association shall allow a member or his or her authorized
1439 representative to use a portable device, including a smartphone,
1440 tablet, portable scanner, or any other technology capable of
1441 scanning or taking photographs, to make an electronic copy of
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Amendment No. 1
1442 the official records in lieu of the association's providing the
1443 member or his or her authorized representative with a copy of
1444 such records. The association may not charge a fee to a member
1445 or his or her authorized representative for the use of a
1446 portable device.
1447 (a) The failure of an association to provide access to the
1448 records within 20 ±G- business days after receipt of a written
1449 request submitted by certified mail, return receipt requested,
1450 creates a rebuttable presumption that the association willfully
1451 failed to comply with this subsection.
1452 (b) A member who is denied access to official records is
1453 entitled to the actual damages or minimum damages for the
1454 association's willful failure to comply with this subsection in
1455 the amount of. The minimum damages are to be $10 per calendar
1456 day up to 10 days, not to exceed $100. The calculation for
1457 damages begins to begin on the 21st -l-±-t-fi business day after
1458 receipt of the written request, submitted by certified mail,
1459 return receipt requested.
1460 (c) A dispute between a member and an association
1461 regarding inspecting or photocopying official records must be
1462 submitted to mandatory binding arbitration with the division,
1463 and the arbitration must be conducted pursuant to s. 723.1255
1464 and procedural rules adopted by the division.
1465 (d) The association may adopt reasonable written rules
1466 governing the frequency, time, location, notice, records to be
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1467 inspected, and manner of inspections, but may not require a
1468 member to demonstrate a proper purpose for the inspection, state
1469 a reason for the inspection, or limit a member's right to
1470 inspect records to less than 1 business day per month. The
1471 association may impose fees to cover the costs of providing
1472 copies of the official records, including the costs of copying
1473 and for personnel to retrieve and copy the records if the time
1474 spent retrieving and copying the records exceeds 30 minutes and
1475 if the personnel costs do not exceed $20 per hour. Personnel
1476 costs may not be charged for records requests that result in the
1477 copying of 25 or fewer pages. The association may charge up to
1478 25 cents per page for copies made on the association's
1479 photocopier. If the association does not have a photocopy
1480 machine available where the records are kept, or if the records
1481 requested to be copied exceed 25 pages in length, the
1482 association may have copies made by an outside duplicating
1483 service and may charge the actual cost of copying, as supported
1484 by the vendor invoice. The association shall maintain an
1485 adequate number of copies of the recorded governing documents,
1486 to ensure their availability to members and prospective members.
1487 Notwithstanding this paragraph, the following records are not
1488 accessible to members or home owners:
1489 1. A record protected by the lawyer-client privilege as
1490 described ins. 90.502 and a record protected by the work-
1491 product privilege, including, but not limited to, a record
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Amendment No. 1
1492 prepared by an association attorney or prepared at the
1493 attorney's express direction which reflects a mental impression,
1494 conclusion, litigation strategy, or legal theory of the attorney
1495 or the association and which was prepared exclusively for civil
1496 or criminal litigation, for adversarial administrative
1497 proceedings, or in anticipation of such litigation or
1498 proceedings until the conclusion of the litigation or
1499 proceedings.
1500 2. E-mail addresses, telephone numbers, facsimile numbers,
1501 emergency contact information, any addresses for a home owner
1502 other than as provided for association notice requirements, and
1503 other personal identifying information of any person, excluding
1504 the person's name, lot designation, mailing address, and
1505 property address. Notwithstanding the restrictions in this
1506 subparagraph, an association may print and distribute to home
1507 owners a directory containing the name, park address, and
1508 telephone number of each home owner. However, a home owner may
1509 exclude his or her telephone number from the directory by so
1510 requesting in writing to the association. The association is not
1511 liable for the disclosure of information that is protected under
1512 this subparagraph if the information is included in an official
1513 record of the association and is voluntarily provided by a home
1514 owner and not requested by the association.
1515 3. An electronic security measure that is used by the
1516 association to safeguard data, including passwords.
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Amendment No. 1
1517 4. The software and operating system used by the
1518 association which allows the manipulation of data, even if the
1519 home owner owns a copy of the same software used by the
1520 association. The data is part of the official records of the
1521 association.
1522 Section 31. Section 723.1255, Florida Statutes, is amended
1523 to read:
1524 723.1255 Alternative resolution of recall, election, and
1525 inspection and photocopying of official records disputes.-
1526 (1) A dispute between a mobile home owner and a
1527 homeowners' association regarding the election and recall of
1528 officers or directors under s. 723.078(2) (b) or regarding the
1529 inspection and photocopying of official records under s.
1530 723.079(5) must be submitted to mandatory binding arbitration
1531 with the division. The arbitration shall be conducted in
1532 accordance with this section and the procedural rules adopted by
1533 the division.
1534 (2) Each party shall be responsible for paying its own
1535 attorney fees, expert and investigator fees, and associated
1536 costs. The cost of the arbitrators shall be divided equally
1537 between the parties regardless of the outcome.
1538 (3) The division shall adopt procedural rules to govern
1539 mandatory binding arbitration proceedings The Division of
1540 Florida Condominiums, Timeshares, and Hobile Homes of the
1541 Department of Business and Professional Regulation shall adopt
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Amendment No. 1
1542 rules of procedure to govern binding recall arbitration
1543 proceedings.
1544 Section 32. For the purpose of incorporating the amendment
1545 made by this act to section 420.5087, Florida Statutes, in a
1546 reference thereto, paragraph (i) of subsection (22) of section
1547 420.507, Florida Statutes, is reenacted to read:
1548 420.507 Powers of the corporation.-The corporation shall
1549 have all the powers necessary or convenient to carry out and
1550 effectuate the purposes and provisions of this part, including
1551 the following powers which are in addition to all other powers
1552 granted by other provisions of this part:
1553 (22) To develop and administer the State Apartment
1554 Incentive Loan Program. In developing and administering that
1555 program, the corporation may:
1556 (i) Establish, by rule, the procedure for competitively
1557 evaluating and selecting all applications for funding based on
1558 the criteria set forth ins. 420.5087(6) (c), determining actual
1559 loan amounts, making and servicing loans, and exercising the
1560 powers authorized in this subsection.
1561 Section 33. For the purpose of incorporating the amendment
1562 made by this act to section 420.5095, Florida Statutes, in a
1563 reference thereto, subsection (2) of section 193.018, Florida
1564 Statutes, is reenacted to read:
1565 193.018 Land owned by a community land trust used to
1566 provide affordable housing; assessment; structural improvements,
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Amendment No. 1
1567 condominium parcels, and cooperative parcels.-
1568 (2) A community land trust may convey structural
1569 improvements, condominium parcels, or cooperative parcels, that
1570 are located on specific parcels of land that are identified by a
1571 legal description contained in and subject to a ground lease
1572 having a term of at least 99 years, for the purpose of providing
1573 affordable housing to natural persons or families who meet the
1574 extremely-low-income, very-low-income, low-income, or moderate-
1575 income limits specified ins. 420.0004, or the income limits for
1576 workforce housing, as defined ins. 420.5095(3). A community
1577 land trust shall retain a preemptive option to purchase any
1578 structural improvements, condominium parcels, or cooperative
1579 parcels on the land at a price determined by a formula specified
1580 in the ground lease which is designed to ensure that the
1581 structural improvements, condominium parcels, or cooperative
1582 parcels remain affordable.
1583 Section 34. This act shall take effect July 1, 2020.
1584
1585
1586
1587 TITLE AMENDMENT
1588 Remove everything before the enacting clause and insert:
1589 An act relating to community development and housing;
1590 amending s. 125.01055, F.S.; authorizing a board of
1591 county commissioners to approve development of
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Bill No. CS/CS/HB 1339 (2020)
Amendment No. 1
1592 affordable housing on any parcel zoned for
1593 residential, commercial, or industrial use; amending
1594 s. 163.01, F.S.; amending the Florida Interlocal
1595 Cooperation Act; amending s. 163.31771, F.S.; revising
1596 legislative findings; requiring local governments to
1597 adopt ordinances that allow accessory dwelling units
1598 in any area zoned for single-family residential use;
1599 providing an exception; amending s. 163.31801, F.S.;
1600 requiring counties, municipalities, and special
1601 districts to include certain data relating to impact
1602 fees in their annual financial reports; amending s.
1603 166.04151, F.S.; authorizing governing bodies of
1604 municipalities to approve the development of
1605 affordable housing on any parcel zoned for
1606 residential, commercial, or industrial use; amending
1607 s. 320.77, F.S.; revising a certification requirement
1608 for mobile home dealer applicants relating to the
1609 applicant's business location; amending s. 320.771,
1610 F.S.; exempting certain recreational vehicle dealer
1611 applicants from a garage liability insurance
1612 requirement; amending s. 320.822, F.S.; revising the
1613 definition of the term "code''; amending s. 320.8232,
1614 F.S.; revising applicable standards for the repair and
1615 remodeling of mobile and manufactured homes; amending
1616 s. 367.022, F.S.; exempting certain mobile home park
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Amendment No. 1
1617 owners and mobile home subdivision owners from
1618 regulation by the Florida Public Service Commission
1619 relating to water and wastewater service; amending s.
1620 420.5087, F.S.; revising the criteria used by a review
1621 committee when evaluating and selecting specified
1622 applications for state apartment incentive loans;
1623 amending s. 420.5095, F.S.; renaming the Community
1624 Workforce Housing Innovation Pilot Program as the
1625 Community Workforce Housing Loan Program; requiring
1626 the program to provide workforce housing; revising the
1627 definition of the term "workforce housing''; deleting
1628 the definition of the term "public-private
1629 partnership"; authorizing the Florida Housing Finance
1630 Corporation to provide loans under the program to
1631 applicants for construction of workforce housing;
1632 requiring the corporation to establish a certain loan
1633 application process; deleting provisions requiring the
1634 corporation to provide incentives for local
1635 governments to use certain funds; requiring projects
1636 to receive priority consideration for funding under
1637 certain circumstances; deleting a provision providing
1638 for the expedition of local government comprehensive
1639 plan amendments to implement a program project;
1640 requiring that the corporation award loans at a
1641 specified interest rate and for a limited term;
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Amendment No. 1
1642 conforming provisions to changes made by the act;
1643 amending s. 420.531, F.S.; specifying that technical
1644 support provided to local governments and community-
1645 based organizations includes implementation of the
1646 State Apartment Incentive Loan Program; requiring the
1647 entity providing training and technical assistance to
1648 convene and administer biannual regional workshops;
1649 requiring such entity to annually compile and submit
1650 certain information to the Legislature and the
1651 corporation by a specified date; amending s. 420.9073,
1652 F.S.; authorizing the corporation to withhold a
1653 certain portion of funds distributed from the Local
1654 Government Housing Trust Fund to be used for certain
1655 transitional housing; prohibiting such funds from
1656 being used for specified purposes; requiring the
1657 corporation to consult with the Department of Children
1658 and Families to create minimum criteria for such
1659 housing; providing for the distribution of withheld
1660 funds; amending s. 420.9071, F.S.; revising a
1661 definition; amending s. 420.9075, F.S.; requiring an
1662 optimization plan to be included in local housing
1663 assistance plan criteria; revising requirements for
1664 reports submitted by counties and certain
1665 municipalities to the corporation; amending s.
1666 420.9076, F.S.; revising the membership of local
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Amendment No. 1
1667 affordable housing advisory committees beginning on a
1668 specified date; requiring the committees to perform
1669 specified duties annually instead of triennially;
1670 requiring locally elected officials serving on
1671 advisory committees, or their designees, to attend
1672 biannual regional workshops; providing a penalty;
1673 amending s. 553.791, F.S.; amending alternative plans
1674 and inspections; amending s. 723.011, F.S.; providing
1675 construction relating to rental agreements and
1676 tenancies; providing that a mobile home owner may be
1677 required to install permanent improvements as
1678 disclosed in the mobile home park prospectus; amending
1679 s. 723.012, F.S.; authorizing mobile home park owners
1680 to make certain prospectus amendments; providing
1681 requirements for the amendment; prohibiting certain
1682 costs and expenses from being passed on to existing
1683 mobile home owners; amending s. 723.023, F.S.;
1684 revising general obligations for mobile home owners;
1685 amending s. 723.031, F.S.; specifying a requirement
1686 for disclosing and agreeing to a mobile home lot
1687 rental increase; revising construction relating to a
1688 park owner's disclosure of certain taxes and
1689 assessments; amending s. 723.037, F.S.; authorizing
1690 mobile home park owners to give notice of lot rental
1691 increases for multiple anniversary dates in one
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Amendment No. 1
1692 notice; providing construction; revising a requirement
1693 for a lot rental negotiation committee; amending s.
1694 723.041, F.S.; providing that a mobile home park
1695 damaged or destroyed due to natural forces may be
1696 rebuilt with the same density as previously approved,
1697 permitted, and built; providing construction; amending
1698 s. 723.042, F.S.; conforming a provision to changes
1699 made by the act; amending s. 723.059, F.S.;
1700 authorizing certain mobile home purchasers to assume
1701 the remainder of a seller's prospectus; authorizing a
1702 mobile home park owner to offer a purchaser any
1703 approved prospectus; amending s. 723.061, F.S.;
1704 specifying entities that must be provided with a copy
1705 of an eviction notice when received by a mobile home
1706 owner; specifying the waiver and nonwaiver of certain
1707 rights of a mobile home park owner under certain
1708 circumstances; requiring the accounting at final
1709 hearing of rents received; amending s. 723.076, F.S.;
1710 revising procedures related to the election or
1711 appointment of new officers in a homeowner's
1712 association; amending s. 723.078, F.S.; revising
1713 requirements for board elections and ballots;
1714 requiring an impartial committee to be responsible for
1715 overseeing the election process and complying with
1716 ballot requirements; defining the term "impartial
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Amendment No. 1
1717 committee"; requiring that association bylaws provide
1718 a method for determining the winner of an election
1719 under certain circumstances; requiring the Division of
1720 Florida Condominiums, Timeshares, and Mobile Homes to
1721 adopt procedural rules; revising the types of meetings
1722 that are not required to be open to members; providing
1723 an exception to a provision requiring an officer of an
1724 association to provide an affidavit affirming certain
1725 information; authorizing meeting notices to be
1726 provided by electronic means; providing that the
1727 minutes of certain board and committee meetings are
1728 privileged and confidential; conforming provisions to
1729 changes made by the act; amending s. 723.079, F.S.;
1730 revising homeowners' association recordkeeping
1731 requirements; revising the timeframes for which
1732 certain records are required to be retained and be
1733 made available for inspection or photocopying; capping
1734 the amount of damages for which an association is
1735 liable when a member is denied access to official
1736 records; requiring that certain disputes be submitted
1737 to mandatory binding arbitration with the division;
1738 amending s. 723.1255, F.S.; requiring that certain
1739 disputes be submitted to mandatory binding arbitration
1740 with the division; providing requirements for such
1741 arbitration and fees and costs; requiring the division
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Bill No. CS/CS/HB 1339 (2020)
Amendment No. 1
1742 to adopt rules; reenacting s. 420.507(22) (i), F.S.,
1743 relating to powers of the Florida Housing Finance
1744 Corporation, to incorporate the amendment made to s.
1745 420.5087, F.S., in a reference thereto; reenacting s.
1746 193.018(2), F.S., relating to land owned by a
1747 community land trust used to provide affordable
1748 housing, to incorporate the amendment made to s.
1749 420.5095, F.S., in a reference thereto; providing an
1750 effective date
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 7041 PCB CJS 20-01 Litigation Financing Consumer Protection
SPONSOR($}: Civil Justice Subcommittee, Leek
TIED BILLS: IDEN./SIM. BILLS: SB 1828
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Civil Justice Subcommittee 15 Y, 0 N Mawn Luczynski
1) Appropriations Committee 20 Y, 2 N Jones Pridgeon
2) Commerce Committee Hinshelwo
SUMMARY ANALYSIS
Consumer litigation financing is a non-recourse transaction in which a third party ("litigation financier'') provides
funds to a consumer in exchange for an assignment of the consumer's contingent right to receive an amount of
the potential proceeds of a civil action or claim. Unlike a traditional loan, where a lender might look at a
consumer's credit score, income, and other indicators of the consumer's ability to pay, a litigation financier
looks at the strength of the consumer's action or claim, the consumer's likelihood of prevailing, and the
potential damages a consumer could obtain. A litigation financier also assesses the consumer's other debts,
such as attorneys' fees or liens, which might take priority over the litigation financier's repayment.
Funds are paid directly to consumers and are used primarily for living expenses while the consumer waits for
resolution of the civil action or claim that is the subject of the litigation financing contract ("subject claim").
Because the contract obligation can only be collected out of the subject claim's proceeds, if the consumer
recovers nothing in the subject claim, he or she owes the litigation financier nothing, and there are no monthly
payments required while the subject claim is pending. However, because interest and fees for a litigation
financing contract can be extremely high, and litigation financing contract terms may be unclearly stated or
require complicated calculations, some argue that consumers may end up owing much more than they might
have anticipated at the contract's initiation, driving up litigation costs as they reject reasonable settlement
offers on the chance of winning more in court. Some also argue that consumers may reject reasonable
settlement offers at the direction of a litigation financier that hopes to ensure full payment of the contract
obligation. Florida courts have held that litigation financing is not a loan subject to the state's existing consumer
finance laws and caps on interest rates; thus, the product is unregulated in the state.
HB 7041 creates the Litigation Financing Consumer Protection Act ("Act"). Specifically, the bill:
• Requires a litigation financier to register with the Department of State and file a bond and allows
revocation of a registration for non-compliance.
• Requires all litigation financing contracts to be in writing, be completely filled in, and contain mandatory
terms (such as a right of rescission) and disclosures.
• Prohibits a litigation financier from engaging in specified conduct, including making settlement decisions.
• Sets a maximum interest rate of 30 percent simple interest and specifies how long interest can accrue.
• Caps fees and charges at $500 for any civil action or claim, regardless of the number of contracts a
litigation financier enters into with the consumer with respect to that civil action or claim.
• Specifies the priority of a litigation financier's lien on the potential proceeds of a civil action or claim.
• Requires disclosure of litigation financing contracts to other parties in a civil action.
• Protects the work-product and attorney-client privileges despite communication with a litigation financier.
• Provides that a violation of the Act is a violation of the Florida Deceptive and Unfair Trade Practices Act.
The bill will have an indeterminate impact on state government. See Fiscal Analysis and Economic Impact
Statement. The bill does not appear to impact local governments.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h7041b.COM.D0CX
DATE: 2/24/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Litigation Financing
Litigation financing is a non-recourse transaction 1 in which a third party ("litigation financier") provides
funds to a person bringing a civil action or claim in exchange for an assignment of the person's
contingent right to receive an amount of the civil action or claim's potential proceeds. 2 Litigation
financing is available to both the commercial and consumer sectors. 3 In the commercial sector, the
funds are provided to sophisticated litigants and used primarily for litigation costs in a commercial
dispute. 4 However, in the consumer sector ("consumer litigation financing"}, the funds are paid directly
to individuals and used primarily for living expenses while the consumer waits for resolution of the civil
action or claim that is the subject of the litigation financing contract ("subject action or claim"). 5 Industry
data suggests that more than half of such consumers have an annual family income of $50,000 or less
and lack a college degree, while less than half are homeowners, suggesting that lower-income
consumers with access to fewer resources are the primary market for litigation funding contracts. 6
A consumer can apply for litigation financing any time before resolution of his or her civil action or
claim. 7 Unlike a traditional loan, where a lender might look at a consumer's credit score, income, and
other indicators of the consumer's ability to pay, a litigation financier looks at the strength of the
consumer's civil action or claim, the consumer's likelihood of prevailing at trial or in settlement, and the
potential damages a consumer could obtain. 8 A litigation financier also assesses the consumer's
attorneys' fees and other debts, such as medical or child support liens, 9 which might take priority over
the litigation financier's repayment. 10
Benefits and Criticisms
Litigation financing proponents argue that the product provides a necessary funding source for
consumers suffering an unexpected economic loss connected to a pending legal action or claim, giving
consumers financial stability and helping them meet immediate personal needs, including rent, utilities,
and groceries. 11 Proponents also point out that, because litigation financing is a non-recourse
1
A non-recourse transaction is a financial transaction in which the borrower is not personally liable to the lender, so that the lender can
only pursue the collateral to collect what the borrower owes. In other words, the lender does not have a lien on and cannot seize the
borrower's assets to repay the debt. See United States Department of the Treasury, Internal Revenue Service, Recourse vs.
Nonrecourse Debt, https://apps.irs.gov/app/vita/contenU36/36 02 020.jsp (last visited Jan. 22, 2020).
2
See Ronen Avraham and Anthony Sebok, An Empirical Investigation of Third Party Consumer Litigation Funding, 104 Cornell L. Rev.
1133 (2019), https://www.law.gwu.edu/sites/g/files/zaxdzs2351 /f/downloads/Empirical-lnvestiqation-Sebok.pdf (last visited Jan. 22,
2020).
3 Id.
4 Id.
5
Paige Marta Skiba and Jean Xiao, Consumer Litigation Funding: Just Another Form of Payday Lending?, Law and Contemporary
Problems Vol. 80 No. 117 (Nov. 3, 2017), https://scholarship.law.duke.edu/cgi/viewcontent.cgi?article=4840&context=lcp (last visited
Jan. 22, 2020).
6
Eric Schuller, President, Alliance for Responsible Consumer Legal Funding, Consumer Legal Funding 101: Also Known
As .. .Everything You Wanted To Know About Consumer Legal Funding But Were Afraid to Ask, presented to the Florida House of
Representatives Civil Justice Subcommittee, Dec. 12, 2019,
https://www.myfloridahouse.govNideoPlayer.aspx?eventlD=2443575804 2019121124 (last visited Jan. 22, 2020).
7 See Skiba and Xiao, supra note 5.
8 Id.; see also Schuller, supra note 6.
9
A lien is a claim against property evidencing a debt, obligation, or duty. A lien can be created by judgment, equity, agreement, or
statute. Fla. Jur. 2d Liens§ 37:1.
10 See Skiba and Xiao, supra note 5.
11
The Alliance for Responsible Consumer Legal Funding (ARC), More than A Trade Association, http://arclegalfunding.org/ (last visited
Jan. 22, 2020).
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DATE: 2/24/2020
transaction, if the consumer loses the subject action or claim, he or she owes nothing under a litigation
financing contract, making litigation financing less risky than a traditional loan. 12 Additionally, because
the contract obligation is paid only out of the proceeds of a subject action or claim, there are no monthly
or upfront payments required before the subject action or claim resolves. 13
However, litigation financing opponents point out that in order to estimate the total amount owed under
a litigation financing contract, including interest14 and fees, a consumer must accurately predict the date
of the subject action or claim's resolution and the amount of any settlement or judgment that will result
in the consumer's favor. 15 Because contract terms may be unclearly stated or require complicated
calculations, opponents argue that consumers may end up owing much more than they might have
anticipated at the contract's initiation. 16 Additionally, the interest charged on a litigation financing
contract, even if clearly stated, can be extremely high. 17 A consumer who realizes he or she may owe
more than he or she may recover may drive up litigation costs by rejecting reasonable settlement offers
for a chance to win a larger verdict in court. 18
Further, uncertainty exists as to whether an attorney can discuss a litigation financing contract with a
litigation financier without waiving the attorney-client 19 or work product20 privileges. Such privileges are
typically waived or limited when protected information is shared with a third party, but attorney-financier
communication may be necessary for a litigation financier to evaluate a consumer's claim. 21 The
American Bar Association urges attorneys discussing a litigation financing contract with a litigation
financier to safeguard against waiving privilege, warning that infringing a client's rights requires the
client's informed consent after full, candid disclosure of all associated risks and benefits. 22
To address these issues, the Alliance for Responsible Consumer Funding ("ARC"), a national coalition
of litigation financiers, requires its members to provide certain consumer protections in their litigation
financing contracts. 23 These protections include clearly-defined contract terms, which a consumer's
attorney must review, and no hidden fees or complicated calculations. 24 However, ARC membership is
not mandatory for litigation financiers, leaving each state the responsibility for regulating litigation
financing within its borders. To that end, ARC advocates for state regulation creating litigation financing
consumer protections while preserving a consumer's access to litigation financing. 25
12 See Schuller, supra note 6; see also ARC, What is Consumer Legal Funding?, http://arclegalfunding.org/consumer-legal-funding/
(last visited Jan. 22, 2020).
13
See Schuller, supra note 6; see also ARC, What is Consumer Legal Funding?, http://arclegalfunding.org/consumer-legal-funding/
(last visited Jan. 22, 2020).
14
Interest is the cost of borrowing money, expressed as a percentage of the borrowed amount. See Anya Martin, The Interest Rate v.
the Annual Percentage Rate, The Wall Street Journal, May 21, 2015, https://www.wsj.com/articles/the-interest-rate-vs-the-annual-
percentage-rate-1432215724 (last visited Jan. 22, 2020).
15 See Skiba and Xiao, supra note 5.
16 Id.
17 A plaintiff suing a litigation financing company for violating Florida's usury laws, alleging that his litigation financing contract charged
interest at a rate of 3.5 percent compounded monthly, which, if the subject civil action or claim did not quickly resolve, could result in an
effective 51 percent interest rate. See Taylorv. Certified Legal Funding, Inc., No. 8:18CV00027, (M.D. Fla. 2018).
18 See Skiba and Xiao, supra note 5.
19 Under the attorney-client privilege, communication between an attorney and his or her client is typically confidential if such persons
do not intend to disclose it to a third party. This protects the giving of information to an attorney so that the attorney can give sound and
informed legal advice. S. 9.502(1)(c), F.S.; Upjohn Co. v. United States, 101 S.Ct. 677 (1981).
20 Work product means "documents and other tangible things ... prepared in anticipation of litigation or for trial." Work product is almost
absolutely protected under Florida common law if it contains mental impressions, conclusions, opinions and legal theories about
litigation. Fla. R. Civ. P. 1.280(b)(3); State v. Rabin, 495 So. 2d 257(Fla. 3d DCA 1986).
21 See ARC, supra note 11.
22 American Bar Association, Commission on Ethics 20/20, Informational Report to the House of Delegates,
https://www.law.columbia.edu/sites/defaulUfiles/microsites/clwa/CIAA/keynote third party funding.pdf (last visited Jan. 22, 2020).
23 See Schuller, supra note 6; see also ARC, What is Consumer Legal Funding?, http://arclegalfunding.org/consumer-legal-funding/
(last visited Jan. 22, 2020).
24 See ARC, What is Consumer Legal Funding?, http://arclegalfunding.org/consumer-legal-funding/ (last visited Jan. 22, 2020).
25 Id.
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Litigation Financing - Florida
Florida regulates consumer loans and financing, usury, 26 and interest. 27 However, Florida courts have
specifically found that litigation financing is not a loan subject to existing law, leaving litigation financing
'
and associated interest charges unregulated in the state. 28 Given the lack of regulation, the Florida
Bar29 generally "discourages the use of [litigation financing] companies," allowing an attorney to inform
a client about litigation financing only if the attorney feels it is in the client's best interests. 30
Litigation Financing Regulation - Other States
Since 2007, 11 states have passed legislation regulating litigation financing. Of these, most require a
litigation financier to register with the state prior to engaging in litigation financing and cap the interest
or fees chargeable on a litigation financing contract. Two states require litigation financing contract
disclosure in civil actions or claims, and four protect privileged communications.
State Year Registration Interest Fee Disclosure Privilege
(Statute) Passed Required Caps Caps Required Protected
Arkansas (§ 4-57-109) 2015 X
Indiana t6 24-12) 2016 X X X X
Maine (§ 9A-12) 2007 X
Nebraska 2010 X X X
(§§ 25-3301 to 3309)
Nevada (§ 604C) 2019 X X X
Ohio (§ 1349.55) 200a X
Oklahoma 2013 X
(§§ 14A-3-801 to 817)
Tennessee(§ 47-16) 201.f .·. X X X
Vermont 2016 X X
(§74-2251 to 2260)
West Virginia 2019 X X X X
($46A-6N)
Wisconsin 2018 X
(§801.01 (2)(bg))
New York and South Carolina took a different approach, regulating litigation financing through
administrative action. Specifically, New York's Attorney General requires litigation financing contracts to
provide certain consumer protections, 31 while South Carolina's Department of Consumer Affairs
declared the product a loan subject to the state's consumer protection code. 32 Courts in Colorado,
Kentucky, and North Carolina have also deemed litigation financing a loan subject to state usury laws. 33
Uniquely, Pennsylvania courts have invalidated litigation financing contracts under a common law
26 "Usury" means loaning money at an exorbitant or illegally high interest rate. States set their own maximum interest rates. Florida
declares interest higher than 18 percent per year for loans up to $500,000 and higher than 25 percent for loans over $500,000 usurious
unless otherwise allowed by law. Legal Information Institute, Usury, https://www.law.cornell.edu/wex/usury (last visited Jan. 22, 2020);
Ss. 687.02(1) and 687.071(2) and (3), F.S.
27
See generally chs. 516 and 687, F.S.
28
Fausone v. U.S. Claims, Inc., 915 So. 2d 626 (Fla. 2nd DCA 2005); see also Taylor, No. 8:18CV00027.
29 Article V, s. 15 of the Florida Constitution gives the Florida Supreme Court exclusive and ultimate regulatory authority over persons
admitted to practice law in Florida. The Court performs this function through the Florida Bar, an investigative and prosecutorial authority
charged with ensuring that all attorneys meet the minimum standards of conduct set out in the Rules Regulating the Florida Bar.
30
00-3 Fla. Ethics Op. Fla. Bar (Mar. 15, 2002), https://www.floridabar.org/etopinions/etopinion-00-3/ (last visited Jan. 22, 2020).
31 See Julia H. McLaughlin, Litigation Funding: Charting a Legal and Ethical Course, 31 Vt. L. Rev. 615 (2007),
https://lawreview.vermontlaw.edu/wp-content/uploads/2012/02/mclaughlin.pdf (last visited Jan. 22, 2020).
32
U.S. Chamber Institute for Legal Reform, Lawsuit Lending: South Carolina Calls it Like It Is,
https://www.instituteforlegalreform.com/resource/lawsuit-lending-south-carolina-calls-it-like-it-is (last visited Jan. 22, 2020).
33 Oasis Legal Fin. Grp., LLC v. Coffman, 361 P. 3d 400 (Co. S.Ct. 2015); Boling v. Prospect Funding Holdings, LLC, 2017 WL
1193064, (Yv.D. Ky. 2017); Odell v. Legal Bucks, LLC, 192 N.C.App. 298 (N.C. Ct. of Appeals 2008).
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champerty doctrine, 34 and Alabama courts have held that litigation financing contracts are a form of
gambling, or speculating, in litigation and thus void as against public policy. 35
Effect of Proposed Changes
The bill creates the Litigation Financing Consumer Protection Act, regulating litigation financing to
protect Florida consumers.
The bill defines litigation financing as a non-recourse transaction in which a litigation financier gives a
consumer funds in exchange for an assignment of the consumer's contingent right to receive an
amount of a civil action or claim's potential proceeds. 36 This term specifically excludes, and thus the bill
does not apply to:
• Legal services provided by an attorney on a contingency fee 37 basis;
• A commercial tort claim; 38
• A Workers' Compensation claim; 39
• Lending or financial arrangements between an attorney or law firm and a lending institution to
fund litigation costs in the ordinary course of business; and
• A consumer finance loan. 40
Florida regulates these excluded products, practices, and claims under other existing laws and rules.
Registration and Revocation
The bill requires a litigation financier to register as a litigation financier with the Department of State
("Department") before offering litigation financing and to file with the Department a $250,000 bond:
• Issued by a surety company authorized to do business in the state;
• Payable to the Department for the payment of damages awarded to a consumer in an action
under the Florida Deceptive and Unfair Trade Practices Act ("FDUTPA"); and
• Effective so long as the Department's records designate a litigation financier as such or a
litigation financing contract with the litigation financier is effective.
Corporate, Limited Liability Company, and Partnership Registration
Florida law already requires a corporation, limited liability company ("LLC"), or partnership to register
with the Department by filing an organizational document4 1 or certificate of authority application42 and
meeting other requirements. The bill supplements existing registration requirements for such
34
The champerty doctrine prohibits selling legal judgment or settlement proceeds before such judgement or settlement to a
disinterested party. See Paul Bond, Making Champerty Worlc An Invitation to State Action, 150 U. Penn. L. Rev. 1297 (2002),
https://scholarship.law.upenn.edu/cgi/viewcontent.cqi?article=3271&context=penn law review (last visited Jan. 22, 2020); WFIC, LLC
V. LaBarre, 2016 WL 4769436 (Pa. 1st J.D. 2016).
35 Wilson v. Harris, 688 So. 2d 265 (Ala. Civ. App. 1996).
36 The bill expressly provides that a consumer may assign his or her contingent right to receive an amount of the potential proceeds of a
civil action or claim.
37 In certain lawsuits, such as a personal injury lawsuit, an attorney may agree to accept a portion of the money a client recovers from
his or her civil action or claim as the fee for the attorney's service. Such agreements must be in writing and entered into at the outset of
the representation. See The Florida Bar, Consumer Pamphlet: Attorney's Fees,
https://www.floridabar.org/public/consumer/pamphlet003/ (last visited Jan. 22, 2020).
38 A "commercial tort claim" is a claim arising in tort with respect to which the claimant is an organization or the claimant is an individual
and the claim arose in the course of the claimant's business or profession and does not include damages arising out of personal injury
to or the death of an individual. S. 679.1021 (1 )(m), F .S.
39 A "workers' compensation claim" is a claim for disability and medical benefits made by an injured worker. Such benefits are paid at
the employer's expense. See Ch. 440, F.S.
40
A "consumer finance loan" is a loan of money, credit, or goods in an mount or to a value of $25,000 or less for which the lender
charges, contracts for, collects, or receives interest at a rate greater than 18 percent per annum. S. 516.01 (2), F .S.
41
Organizational documents include articles of organization or incorporation and a certificate of limited partnership.
42
A certificate of authority allows a foreign corporation or limited liability company to do business in the state.
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businesses wishing to engage in litigation financing by providing that a corporation, LLC, or partnership
is registered as a litigation financier if it:
• Meets the bond requirements;
• Has a status of active and in good standing in Department records; and
• Indicated in its organizational document, or certificate of authority application, that it is a
litigation financier.
A litigation financier that is a corporation, LLC, or partnership must amend its registration within 30 days
after the information contained in the registration changes or becomes inaccurate by updating its
organizational document or certificate of authority application in the manner already prescribed by the
Department for updating such documents.
Sole Proprietorship Registration
Florida law does not require sole proprietorships to register with the Department, and thus the bill
creates a unique registration process for sole proprietorships wishing to engage in litigation financing.
Under the bill, a sole proprietorship is registered as a litigation financier in the state if it:
• Meets the bond requirements; and
• Files a litigation financier registration application with the Department containing:
o The applicant's full legal name and fictitious name, if any;
o The applicant's physical and mailing addresses and telephone number;
o A statement that the applicant is a litigation financier; and
o Any other information the Department requires.
A litigation financier that is a sole proprietorship must amend its registration within 30 days after the
information contained in the registration changes or becomes inaccurate by filing an amendment on a
form prescribed by the Department.
Registration Revocation
The bill gives the Department the authority to revoke a litigation financier's registration for non-
compliance with the registration, registration amendment, and bond requirements. Specifically, if the
Department determines that a litigation financier violated any of these requirements, the Department
must serve the litigation financier notice of its intent to revoke the litigation financier's registration. Such
notice must specifically list all revocation grounds and may be sent by electronic mail if the litigation
financier gave the Department an electronic mail address. A litigation financier has 60 days from the
date the Department sends such notice to correct each revocation ground or to show there were no
such violations. Otherwise, the Department must revoke the litigation financier's registration, after
which the litigation financier may not continue to offer litigation financing in the state.
Contract Terms and Disclosures
The bill requires that all litigation financing contracts be in writing and completely filled in when offered
or presented to a consumer. The bill also provides mandatory contract terms and disclosures designed
to inform consumers of their financial obligations under the contract.
Mandatory Terms
The bill requires that a litigation financing contract contain a right of rescission allowing the consumer to
cancel the contract without penalty if the consumer gives written rescission notice and returns any
funds already provided under the contract to the litigation financier within five business days after
contract execution or receipt of the funds. This prevents a litigation financier from assessing interest,
fees, or charges to a consumer who timely and correctly cancels a litigation financing contract.
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The bill also requires that a litigation financing contract include:
• The consumer's written acknowledgement of whether he or she has an attorney; and
• A statement indicating that, if the subject action or claim's proceeds are paid into a settlement
fund or trust, the litigation financier must notify the fund or trust administrator of any outstanding
financial obligations under the contract.
Mandatory Disclosures
The bill requires that a litigation financing contract disclose that a litigation financier may not, and will
not, make any decisions about the subject action or claim or try to influence its direction. Further, the
PCB requires a litigation financing contract to contain specifically worded disclosures pertaining to a
consumer's contract rescission rights and warning that a consumer should not sign the contract without
completely reading it or if any part of the contract is incomplete or blank.
The bill also requires a litigation financing contract to include notice that, if the net proceeds43 of the
subject action or claim are insufficient to fully repay the litigation financier, the litigation financier will
accept a reduced sum as full payment of what is owed under the contract, which sum cannot exceed
the net proceeds less proceeds specifically awarded for medical expenses. If the consumer recovers
nothing in the subject action claim, the consumer owes the litigation financier nothing.
Additionally, the bill requires a litigation financing contract to specifically state:
• The total funded amount;
• An itemized list of all fees and charges;
• The interest rate; and
• The total amount the consumer owes in six-month intervals for three years.
Prohibited Conduct
The bill prohibits a litigation financier from engaging in conduct harmful to consumers. Specifically, the
bill prohibits a litigation financier from:
• Paying, offering to pay, or accepting a commission, referral fee or other consideration.
• Advertising false or misleading information about its products or services.
• Referring a consumer to a specific attorney or health care practitioner. 44
• Failing to promptly give a consumer a copy of any complete litigation financing contract.
• Trying to obtain a waiver of a consumer's remedy in the subject action or claim.
• Trying to effect arbitration or waiver of a consumer's jury trial right in the subject action or claim.
• Offering or giving a consumer legal advice about the litigation financing contract or the subject
action or claim.
• Assigning a litigation financing contract in whole or in part.
• Reporting to a consumer credit agency if there are not enough funds left from the net proceeds
of the subject action or claim to repay the litigation financier.
• Directing, or making, any decisions about, the subject action or claim.
• Entering into a litigation financing contract with a consumer incorporating the consumer's
obligations to the litigation financier under an existing contract.
• Knowingly entering into a litigation financing contract with a consumer who already has a
contract with another litigation financier without first paying off the amount owed under that
contract, unless the consumer consents to multiple contracts in writing.
43
"Net proceeds" means the portion of the proceeds of a civil action or claim remaining after satisfaction of all liens with a higher priority
than that of the litigation financier as specified in s. 501.1006(2), F .S.
44 "Health care practitioner'' has the same meaning as ins. 456.001(4), F.S.
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Interest. Fees, Charges, and Penalties
The bill limits the amount and duration of interest, fees, charges, and penalties a litigation financier may
assess a consumer, preventing exorbitant assessments and enabling a consumer to determine at the
time of contract execution the maximum amount owed under the contract.
Interest
The bill prohibits a litigation financier from assessing an interest45 rate greater than 30 percent of the
funded amount46 and requires that, in determining this rate, the computations used are simple
interest. 47 Interest can only accrue on the funded amount, not on any fees, charges, or interest
assessed.
The bill also specifies that interest only accrues until a court enters a final order or a settlement
agreement is executed in the subject action or claim, whichever is earlier, but provides that in no case
can interest accrue for more than three years from the date the consumer receives the funds. Further,
the bill prohibits a litigation financier from assessing interest on a rescinded contract. This means that a
consumer will not pay more than three years' worth of interest on the funded amount regardless of how
long the subject action or claim's resolution takes, and will owe no interest if he or she properly rescinds
the contract.
Fees, Charges, and Penalties
The bill caps fees a litigation financier may charge at $500 with regard to any civil action or claim. This
means that if a consumer enters into multiple litigation financing contracts with a litigation financier in
exchange for assigning to the litigation financier his or her contingent right to proceeds from a single
action or claim, the consumer will not owe more than $500 in charges and fees. Additionally, the bill
prohibits a litigation financier from assessing any fee, charge, or penalty for contract rescission, so that
a consumer properly rescinding the contract will owe nothing.
Lien Priority
A litigation financier's lien on the potential proceeds of a civil action or claim has priority over liens that
attach to such proceeds subsequent to the attachment of the litigation financier's lien, except for:
• Attorney, insurance carrier, or healthcare practitioner liens or liens based upon subrogation
interests or reimbursement rights related to the subject civil action or claim; and
• Child support, Medicare, tax, or any other statutory or governmental lien.
Privilege and Discovery
Privilege
The bill specifies that communication between an attorney and a litigation financier about a litigation
financing contract does not limit, waive, or abrogate any statutory or common-law privilege, including
the attorney-client privilege and the work product doctrine. This means that an attorney may discuss a
litigation financing contract with a litigation financier within the bounds of any applicable Florida Bar
rules without waiving these privileges.
45
"Interest" means the cost of obtaining litigation financing and includes any profit or advantage of any kind whatsoever that a litigation
financier may charge, contract for, collect, receive, or in any way obtain as a condition for a litigation financing contract. Charges and
fees specifically authorized by the Act are not interest.
46
The "funded amount" means the funds actually received and retained by a consumer under a litigation financing contract.
47
"Simple interest" is interest paid on the amount lent, at a certain rate, which does not become part of the base on which future interest
is calculated. Black's Law Dictionary 561 (6th ed. 1991).
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Discovery
The bill requires a party to a civil action or claim to provide the other parties any litigation financing
contract relating to such action or claim without waiting for a discovery request, except as otherwise
ordered by the court. This gives a defendant notice of a plaintiff's obligation to a litigation financier.
Violations and Enforcement Under FDUTPA
The bill specifies that a violation of the Act is actionable under FDUTPA. 48 Such violations occurring in
or affecting a single judicial circuit are enforced by the office of the state attorney ("OSA") for the
affected circuit, or the Department of Legal Affairs ("DLA") if the state attorney defers to DLA in writing
or fails to act within 90 days after a written complaint is filed. 49 DLA also enforces violations occurring in
or affecting more than one judicial circuit. 50
Enforcement Actions
The FDUTPA enforcing authority has numerous enforcement remedies, which may be brought after the
enforcement authority reviews the matter and determines that such an action serves the public
interest. 51 These remedies include bringing an action:
• For a declaratory judgment stating that an act or practice violates FDUTPA. 52
• To enjoin a litigation financier violating FDUTPA. 53
• On behalf of a consumer or governmental entity for the actual damages caused by an act or
practice violating FDUTPA. 54
Any litigation financier who willfully 55 uses a deceptive or unfair trade act or practice faces a civil penalty
of up to $10,000 per violation, and a civil penalty of up to $15,000 per violation if the victim was a senior
citizen, 56 disabled person, 57 or military service member. 58 Further, the litigation financier could be
ordered to pay the enforcing authority's attorneys' fees and costs if the enforcing authority prevails. 59
Cease and Desist Orders
If DLA believes a litigation financier is violating FDUTPA, and that a cease and desist order ("order'')
would serve the public interest, DLA must serve the litigation financier with a complaint and order
stating its charges. 60 Such complaint must contain a notice setting a hearing for a date and time at least
30 days after service, which hearing must comply with the Administrative Procedures Act. 61 An order,
appealable to the circuit court of appeals, takes effect ten days after all administrative action concludes
or, if appealed, when the appellate court enters a final order in favor of DLA. 62 A litigation financier
violating such an order faces a civil penalty of up to $5,000 per violation. 63
48 FDUTPA is set forth in ch. 501, F.S., part II.
49 S. 501.203(2), F.S.
50 Id.
51
S. 501.207(2), F.S.
52 S. 501.207(1)(a), F.S.
53 S. 501.207(1)(b), F.S.
54 S. 501.207(1)(c), F.S.
55 A willful violation occurs when a person knew or should have known his or her conduct was unfair or deceptive and prohibited. S.
501.2075, F.S.
56
As used here, "senior citizen" means a person 60 years of age or older. S. 501.2077(1)(e), F.S.
57
As used here, "disabled person" means a person who has a mental or educational impairment that substantially limits one or more
major life activities. S. 501.2077(1 )(d), F.S.
58
Ss. 501.2075 and s. 501.2077(2) and (3), F.S.
59 S. 501.2105, F.S.
60
S. 501.208(1), F.S.
61 Id.
62 S. 501.208(4), F.S.
63 S. 501.208(7), F.S.
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Declaratory Judgment Actions
A consumer harmed by a litigation financier's FDUTPA violation may bring an action for a declaratory
judgment that a litigation financier's act or practice violates FDUTPA and to enjoin the litigation financier
from committing such an act or practice. 64 A consumer bringing a declaratory judgment action may
recover his or her actual damages, plus attorneys' fees and costs, from the litigation financier, and
damages may be paid from the bond held by the Department. 65
B. SECTION DIRECTORY:
Section 1: Provides that this Act may be cited as the Litigation Financing Consumer Protection Act.
Section 2: Creates s. 501.1001, F.S., relating to definitions.
Section 3: Creates s. 501.1002, F.S., relating to litigation financier registration; registration revocation.
Section 4: Creates s. 501.1003, F.S., relating to litigation financing contracts; terms.
Section 5: Creates s. 501.1004, F.S., relating to prohibited conduct.
Section 6: Creates s. 501.1005, F.S., relating to required disclosures.
Section 7: Creates s. 501.1006, F.S., relating to contingent right to proceeds assignable; priority of lien
or right to proceeds.
Section 8: Creates s. 501.1007, F.S., relating to interest, fees, charges, and penalties.
Section 9: Creates s. 501.1008, F.S., relating to litigation financing contracts; discovery.
Section 10: Creates s. 501.1009, F.S., relating to effect of communication on privilege.
Section 11: Creates s. 501.1010, F.S., relating to violation; enforcement.
Section 12: Provides an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The state may collect a civil penalty from a litigation financier that has violated FDUTPA. A litigation
financier who willfully uses a deceptive or unfair trade act or practice may face a civil penalty of up
to $10,000 per violation, or $15,000 per violation if such victim was a senior citizen, disabled
person, or military service member.
2. Expenditures:
The bill may have an indeterminate negative impact on the Department, as it requires the
Department to process a new type of registration, revoke such registration for specified violations
after notice and opportunity to cure, and to hold bonds. However, these costs could possibly be
absorbed in the Department's operating budget as the Department currently serves a similar
registration function for corporations, limited liability companies, and partnerships.
Additionally, because the bill creates a FDUTPA violation, the bill may cause an indeterminate, but
likely insignificant, workload increase on the DLA and the OSA for each judicial circuit, as both are
currently charged with prosecuting such violations. However, these costs may be absorbed in such
entities' respective operating budgets.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
64
S. 501.211 (1), F.S.
65 S. 501.211 (2), F.S.
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2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may positively impact a consumer entering a litigation financing contract by capping allowable
interest, fees, and charges to the consumer, and providing greater transparency regarding the total
amount due from the consumer when he or she enters the contract.
The bill may negatively impact litigation financiers who will be subject to additional requirements and
prohibitions under the bill, including state registration requirements and maximum allowable interest,
fees, and charges to consumers. A litigation financier who willfully uses a deceptive or unfair trade act
or practice may face a civil penalty of up to $10,000 per violation, or $15,000 per violation if the victim
was a senior citizen, disabled person, or military service member.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill gives the Department the authority to promulgate rules necessary to implement the bill's
registration, bond, and revocation requirements.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On January 22, 2020, the Civil Justice Subcommittee adopted one amendment and reported the PCB
favorably as amended. The amendment changed the definition of "consumer'' from a "natural person" located
in the state to an "individual" without regard to location.
This analysis is drafted to the PCB as amended by the Civil Justice Subcommittee.
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
HB 7041 2020
1 A bill to be entitled
2 An act relating to litigation financing consumer
3 protection; creating part VIII of ch. 501, F.S.,
4 entitled "Litigation Financing Consumer Protection
5 Act"; creating s. 501.1001, F.S.; providing
6 definitions; creating s. 501.1002, F.S.; requiring
7 litigation financiers to register with the Department
8 of State before engaging in litigation financing;
9 providing registration requirements; requiring
10 litigation financiers to file a surety bond meeting
11 specified requirements; requiring the department serve
12 notice to such financiers and to revoke such
13 registrations for certain noncompliance; authorizing
14 the department to adopt rules; creating s. 501.1003,
15 F.S.; providing requirements for litigation financing
16 contracts; creating s. 501.1004, F.S.; prohibiting
17 litigation financiers from engaging in specified
18 conduct; creating s. 501.1005, F.S.; providing
19 disclosure requirements for litigation financing
20 contracts; creating s. 501.1006, F.S.; providing for
21 the assignment of contingent rights to civil action or
22 claim proceeds; specifying the priority of liens
23 against or rights to civil action or claim proceeds;
24 creating s. 501.1007, F.S.; authorizing litigation
25 financiers to assess specified interest, fees, and
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7041 2020
26 charges; providing requirements for such interest,
27 fees, and charges; prohibiting a litigation financier
28 from assessing specified fees or charges; creating s.
29 501.1008, F.S.; requiring the disclosure of litigation
30 financing contracts under specified circumstances;
31 creating s. 501.1009, F.S.; providing that specified
32 communications between attorneys and litigation
33 financiers do not effect statutory or common-law
34 privilege; creating s. 501.1011, F.S.; providing that
35 violations of the act are deceptive and unfair trade
36 practices; providing construction; providing an
37 effective date.
38
39 Be It Enacted by the Legislature of the State of Florida:
40
41 Section 1. Part VIII of chapter 501, Florida Statutes,
42 consisting of sections 501.1001, 501.1002, 501.1003, 501.1004,
43 501.1005, 501.1006, 501.1007, 501.1008, 501.1009, and 501.1011,
44 is created and entitled "Litigation Financing Consumer
45 Protection Act."
46 Section 2. Section 501.1001, Florida Statutes, is created
47 to read:
48 501.1001 Definitions.-As used in this part, the term:
49 ( 1) "Consumer" means any individual.
50 (2) "Department" means the Department of State.
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HB 7041 2020
51 (3) "Enforcing authority" has the same meaning as ins.
52 501.203.
53 (4) "Funded amount" means the funds actually received and
54 retained by a consumer under a litigation financing contract.
55 (5) "Health care practitioner" has the same meaning as in
56 s. 456.001 (4).
57 (6) "Interest" means the cost of obtaining litigation
58 financing and includes any profit or advantage of any kind
59 whatsoever that a litigation financier may charge, contract for,
60 collect, receive, or in any way obtain as a condition for a
61 litigation financing contract. Charges and fees specifically
62 authorized by this part are not interest.
63 (7) "Litigation financier" means a person engaged in the
64 business of litigation financing.
65 (8) "Litigation financing" means a nonrecourse transaction
66 in which a litigation financier provides funds to a consumer in
67 exchange for an assignment of the consumer's contingent right to
68 receive an amount of the potential proceeds of the consumer's
69 civil action or claim. The term does not include:
70 (a) Legal services provided to a consumer on a contingency
71 fee basis, or advanced legal costs, where such services or costs
72 are provided by an attorney representing the consumer in
73 accordance with the Florida Rules of Professional Conduct;
74 (b) A commercial tort claim as defined ins.
75 679.1021(1) (m);
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76 (c) A worker's compensation claim under chapter 440;
77 (d) Lending or financing arrangements between an attorney
78 or law firm and a lending institution to fund litigation costs
79 in the ordinary course of business; or
80 (e) A consumer finance loan, as defined ins. 516.01(2).
81 (9) "Net proceeds" means the portion of the proceeds of a
82 civil action or claim remaining after satisfaction of all liens
83 with a higher priority than that of the litigation financier as
84 specified ins. 501.1006(2).
85 Section 3. Section 501.1002, Florida Statutes, is created
86 to read:
87 501.1002 Litigation financier registration; registration
88 revocation.-
89 (1) A litigation financier may not engage in litigation
90 financing in this state before registering as a litigation
91 financier under this section.
92 (a) A litigation financier that is a corporation, limited
93 liability company, or partnership is registered under this
94 section if it has:
95 1. Met the bond requirements of subsection (2);
96 2. A status of active and in good standing as reflected in
97 department records; and
98 3. Filed articles of organization or incorporation, a
99 certificate of limited partnership, or another organizational
100 document, or, if a foreign entity, an application for a
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101 certificate of authority with the department stating therein
102 that it is a litigation financier.
103 (b) A litigation financier who is not a corporation,
104 limited liability company, or partnership is registered under
105 this section if he or she has:
106 1. Met the bond requirements of subsection (2); and
107 2. Filed a litigation financier registration application
108 with the department on a form prescribed by the department
109 containing, at a minimum:
110 a. The applicant's full legal name and fictitious name, if
111
112 b. The applicant's physical address, mailing address, and
113 telephone number;
114 c. A statement that the applicant is a litigation
115 financier; and
116 d. Any other information the department deems necessary.
117 (2) Each litigation financier must file with the
118 department a $250,000 surety bond, which bond must be:
119 (a) Issued by a surety company authorized to do business
120 in this state.
121 (b) Payable to the department for the payment of damages
122 awarded to a consumer under part II of this chapter.
123 (c) Effective so long as the department's records
124 designate a litigation financier as such or a litigation
125 financing contract with the litigation financier is effective.
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126 (3) A litigation financier must amend its registration
127 within 30 days after the date the information contained therein
128 changes or becomes inaccurate in any respect. A litigation
129 financier who is not a corporation, limited liability company,
130 or partnership may amend his or her registration by filing with
131 the department an amendment on a form prescribed by the
132 department.
133 (4) If the department determines that a litigation
134 financier has not complied with the requirements of this
135 section, the department shall serve the litigation financier
136 notice in a record of its intent to revoke the litigation
137 financier's registration. Such notice:
138 (a) Must specifically state all grounds for revocation;
139 and
140 (b) May be sent by electronic mail to a litigation
141 financier that provided the department with an electronic mail
142 address.
143 (5) A litigation financier has 60 days from the date the
144 department sends the notice required by subsection (4) to
145 correct the grounds for revocation or demonstrate to the
146 reasonable satisfaction of the department that each ground
147 determined by the department does not exist. The department
148 shall revoke the litigation financier registration of any
149 litigation financier who fails to comply with the requirements
150 of this section.
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151 (6) The department has the authority reasonably necessary
152 to enable it to administer this section efficiently, to perform
153 duties imposed upon it, and to adopt rules to implement this
154 section.
155 Section 4. Section 501.1003, Florida Statutes, is created
156 to read:
157 501.1003 Litigation financing contracts; terms.-The
158 litigation financing terms must be set forth in a written
159 contract containing:
160 (1) A right of rescission allowing the consumer to cancel
161 the contract without penalty, interest, fees, or charges, or
162 further obligation if, within 5 business days after execution of
163 a contract or receipt of funds by the consumer, whichever is
164 later, the consumer provides written rescission notice and
165 returns any funds already provided under the contract to the
166 litigation financier;
167 (2) The consumer's written acknowledgement of whether an
168 attorney represents him or her in the civil action or claim that
169 is the subject of the contract; and
170 (3) A statement indicating that, in the event the proceeds
171 of the subject civil action or claim are paid into a settlement
172 fund or trust, the litigation financier must notify the fund or
173 trust administrator of any outstanding financial obligations
174 arising from the contract.
175 Section 5. Section 501.1004, Florida Statutes, is created
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176 to read:
177 501.1004 Prohibited conduct.-A litigation financier may
178 not:
179 ( 1) Pay or offer to pay a commission, referral fee or
180 other consideration to any person, including an attorney, law
181 firm, or health care practitioner, for referring a consumer to a
182 litigation financier;
183 (2) Accept a commission, referral fee, rebate, or other
184 consideration from any person, including an attorney, law firm,
185 or health care practitioner;
186 (3) Advertise false or misleading information about its
187 products or services;
188 (4) Refer a consumer to a specific attorney, law firm, or
189 health care practitioner, except that, if a consumer lacks legal
190 representation, the litigation financier may refer the consumer
191 to an attorney referral service operated by a county or state
192 bar association;
193 (5) Fail to promptly supply a copy of any complete
194 litigation financing contract to the consumer;
195 (6) Attempt to obtain a waiver of any remedy, including,
196 but not limited to, compensatory, statutory, or punitive
197 damages, that the consumer might otherwise have in the subject
198 civil action or claim;
199 (7) Attempt to effect arbitration or waiver of a
200 consumer's right to a jury trial in the subject civil action or
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201 claim;
202 (8) Offer or provide legal advice to the consumer
203 regarding the litigation financing contract or the subject civil
204 action or claim;
205 (9) Assign a litigation financing contract in whole or in
206 part;
207 (10) Report to a consumer credit reporting agency if
208 insufficient funds remain from the net proceeds of the subject
209 civil action or claim to repay the litigation financier;
210 ( 11) Direct, or make any decisions with respect to, the
211 course of the subject civil action or claim or any settlement
212 thereof;
213 (12) Enter into a litigation financing contract with a
214 consumer incorporating the consumer's obligations to the
215 litigation financier under an existing litigation financing
216 contract; or
217 (13) Knowingly enter into a litigation financing contract
218 with a consumer already under a litigation financing contract
219 with another litigation financier without first paying the
220 entire funded amount and all fees and charges owed under the
221 existing contract, unless the consumer consents to a
222 contemporaneous financing arrangement in writing.
223 Section 6. Section 501.1005, Florida Statutes, is created
224 to read:
225 501.1005 Required disclosures.-
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226 (1) A litigation financing contract must contain the
227 following disclosures on the front page of the contract in at
228 least 12-point boldfaced type:
229 (a) Notice of the consumer's right to a completely filled
230 in contract;
231 (b) A statement that the litigation financier does not
232 have the right to, and may not make any decisions or attempt to,
233 influence the consumer or his or her attorney about the conduct
234 of the civil action or claim that is the subject of the contract
235 and that the right to make such decisions remains solely with
236 the consumer;
237 (c) The total funded amount provided to the consumer;
238 (d) An itemized list of all fees and charges payable by
239 the consumer;
240 (e) The interest rate;
241 (f) The total amount due from the consumer in 6-month
242 intervals for 3 years, including all interest, fees, and
243 charges;
244 (g) A statement that the consumer will owe no fees or
245 charges other than those described in the disclosures;
246 (h) The cumulative amount due from the consumer for all
247 litigation financing contracts if the consumer seeks multiple
248 contracts and makes repayment any time after contract execution;
249 (i) Notice that if the consumer recovers nothing from the
250 subject civil action or claim, he or she will owe the litigation
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251 financier nothing; and
252 (j) Notice that if the net proceeds of the subject civil
253 action or claim are insufficient to fully repay the litigation
254 financier, the litigation financier will accept a reduced sum as
255 full payment of the funded amount and all fees and charges owed,
256 which sum may not exceed the net proceeds less proceeds
257 specifically awarded for future medical expenses.
258 (2) A litigation financing contract must also contain the
259 following disclosure on the front page of the contract in at
260 least 18-point uppercase and boldfaced type:
261
262 CONSUMER'S RIGHT TO CANCELLATION: YOU MAY CANCEL THIS CONTRACT
263 WITHOUT PENALTY, INTEREST, FEES, CHARGES, OR FURTHER OBLIGATION
264 WITHIN 5 BUSINESS DAYS FROM THE DATE OF CONTRACT EXECUTION OR
265 RECEIPT OF FUNDS FROM [INSERT NAME OF THE LITIGATION FINANCIER],
266 WHICHEVER IS LATER, BY GIVING WRITTEN NOTICE OF THE CANCELLATION
267 AND BY RETURNING THE FUNDS TO [INSERT NAME OF THE LITIGATION
268 FINANCIER]. FOR PURPOSES OF THE DEADLINE, THE POSTMARK DATE ON
269 FUNDS RETURNED BY REGULAR U.S. MAIL, OR THE DATE OF THE RETURN
270 RECEIPT REQUESTED IF MAILED BY CERTIFIED MAIL, WILL BE
271 CONSIDERED THE DATE OF RETURN OF THE FUNDS.
272
273 (3) A litigation financing contract must contain the
274 following disclosure immediately above the consumer's signature
275 line in 18-point uppercase and boldfaced type:
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276
277 DO NOT SIGN THIS CONTRACT BEFORE READING IT COMPLETELY OR IF THE
278 CONTRACT CONTAINS ANY INCOMPLETE OR BLANK SECTIONS. BEFORE YOU
279 SIGN THIS CONTRACT, YOU SHOULD CONSULT AN ATTORNEY. YOU MAY ALSO
280 WANT TO CONSULT A TAX ADVISOR, A FINANCIAL PROFESSIONAL, OR AN
281 ACCOUNTANT.
282 Section 7. Section 501.1006, Florida Statutes, is created
283 to read:
284 501.1006 Contingent right to proceeds assignable; priority
285 of lien or right to proceeds.-
286 (1) A consumer may assign his or her contingent right to
287 receive an amount of the potential proceeds of a civil action or
288 claim.
289 (2) A litigation financier's lien on the potential
290 proceeds of a civil action or claim has priority over liens that
291 attach to such proceeds subsequent to the attachment of the
292 litigation financier's lien, except for:
293 (a) Attorney, insurance carrier, or healthcare
294 practitioner liens or liens based upon subrogation interests or
295 reimbursement rights related to the subject civil action or
296 claim; and
297 (b) Child support, Medicare, tax, or any other statutory
298 or governmental lien.
299 Section 8. Section 501.1007, Florida Statutes, is created
300 to read:
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301 501.1007 Interest, fees, charges, and penalties.-
302 (1) A litigation financier may not directly or indirectly
303 charge, contract for, or receive an interest rate of greater
304 than 30 percent of the funded amount per annum. In determining
305 compliance with the statutory maximum interest rate, the
306 computations used must be simple interest and not add-on
307 interest or any other computations.
308 (2) The maximum interest rate that may be contracted for
309 and received by a litigation financier is 12 times the maximum
310 monthly rate, and the maximum monthly rate must be computed on
311 the basis of one-twelfth of the annual rate for each full month.
312 The maximum daily rate must be computed on the basis of the
313 maximum monthly rate divided by the number of days in the month.
314 (3) Interest may only accrue until a court enters a final
315 order or a settlement agreement is executed in the civil action
316 or claim that is the subject of the litigation financing
317 contract, whichever is earlier, but interest may not accrue for
318 a period exceeding three years from the date the consumer
319 receives the funds from the litigation financier. The total
320 interest assessed must be calculated based on the actual number
321 of days for which interest accrued.
322 (4) A litigation financier may not directly or indirectly
323 charge, contract for, or receive any fees or charges the
324 combined total of which exceeds $500 with regard to a single
325 civil action or claim, regardless of the number of litigation
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326 financing contracts the consumer enters into with the litigation
327 financier with respect to the civil action or claim.
328 (5) A litigation financier may not directly or indirectly
329 charge, contract for, or receive any interest, fees, or charges,
330 for rescission or cancellation of a litigation financing
331 contract under s. 501.1003(1).
332 Section 9. Section 501.1008, Florida Statutes, is created
333 to read:
334 501.1008 Litigation financing contracts; discovery.-Except
335 as otherwise ordered by the court, a party to any civil action
336 or claim must, without awaiting a discovery request, provide to
337 the other parties any contract under which a litigation
338 financier has a contingent right to receive compensation sourced
339 from potential proceeds of the civil action or claim.
340 Section 10. Section 501.1009, Florida Statutes, is created
341 to read:
342 501.1009 Effect of communication on privilege.-
343 Communication between a consumer's attorney and a litigation
344 financier regarding a litigation financing contract does not
345 limit, waive, or abrogate the scope or nature of any statutory
346 or common-law privilege, including the work-product doctrine and
347 the attorney-client privilege.
348 Section 11. Section 501.1011, Florida Statutes, is created
349 to read:
350 501.1011 Violation; enforcement.-
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351 (1) A violation of this part is an unfair and deceptive
352 trade practice actionable under part II of this chapter.
353 (2) This section does not limit the:
354 (a) Enforcing authority's exercise of powers or
355 performance of duties which the enforcing authority is otherwise
356 legally authorized or required to exercise or perform; or
357 (b) Rights and remedies available to the state or a person
358 under any other law.
359 Section 12. This act shall take effect July 1, 2020.
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COMMERCE COMMITTEE
HB 7041 by Rep. Leek
Litigation Financing Consumer Protection
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Leek (line 41 ): The amendment moves the Litigation Financing
Consumer Protection Act from ch. 501, F.S., to ch. 559, F.S., and makes conforming changes.
Amendment 2 by Rep. Leek (line 66): The amendment limits the application of the Litigation
Financing Consumer Protection Act to litigation financing in which the funded amount is
$500,000 or less.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Leek offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 41-45 and insert:
6 Section 1. Part XIII of chapter 559, Florida Statutes,
7 consisting of sections 559.952, 559.953, 559.954, 559.955,
8 559.956, 559.957, 559.958, 559.959, 559.961, and 559.962, is
9 created and entitled "Litigation Financing Consumer Protection
10 Act."
11
12 Remove lines 46-48 and insert:
13 Section 2. Section 559.952, Florida Statutes, is created
14 to read:
15 559.952 Definitions.-As used in this part, the term:
16
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Page 1 of 5
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 1
17 Remove lines 84-87 and insert:
18 specified ins. 559.957(2).
19 Section 3. Section 559.953, Florida Statutes, is created
20 to read:
21 559.953 Litigation financier registration; registration
22
23 Remove line 122 and insert:
24 awarded to a consumer under part II of chapter 501.
25
26 Remove lines 155-157 and insert:
27 Section 4. Section 559.954, Florida Statutes, is created
28 to read:
29 559.954 Litigation financing contracts; terms.-The
30
31 Remove lines 175-177 and insert:
32 Section 5. Section 559.955, Florida Statutes, is created
33 to read:
34 559.955 Prohibited conduct.-A litigation financier may
35
36 Remove lines 223-225 and insert:
37 Section 6. Section 559.956, Florida Statutes, is created
38 to read:
39 559.956 Required disclosures.-
40
41
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 1
42 Remove lines 282-284 and insert:
43 Section 7. Section 559.957, Florida Statutes, is created
44 to read:
45 559.957 Contingent right to proceeds assignable; priority
46
47 Remove lines 299-301 and insert:
48 Section 8. Section 559.958, Florida Statutes, is created
49 to read:
50 559.958 Interest, fees, charges, and penalties.-
51
52 Remove lines 331-334 and insert:
53 contract under s. 559.954(1).
54 Section 9. Section 559.959, Florida Statutes, is created
55 to read:
56 559.959 Litigation financing contracts; discovery.-Except
57
58 Remove lines 340-342 and insert:
59 Section 10. Section 559.961, Florida Statutes, is created
60 to read:
61 559.961 Effect of communication on privilege.-
62
63 Remove lines 348-350 and insert:
64 Section 11. Section 559.962, Florida Statutes, is created
65 to read:
66 559.962 Violation; enforcement.-
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 1
67 Remove line 352 and insert:
68 trade practice actionable under part II of chapter 501.
69
70
71 T I T L E A ME N D ME N T
72 Remove lines 3-34 and insert:
73 protection; creating part XIII of ch. 559, F.S.,
74 entitled "Litigation Financing Consumer Protection
75 Act"; creating s. 559.952, F.S.; providing
76 definitions; creating s. 559.953, F.S.; requiring
77 litigation financiers to register with the Department
78 of State before engaging in litigation financing;
79 providing registration requirements; requiring
80 litigation financiers to file a surety bond meeting
81 specified requirements; requiring the department serve
82 notice to such financiers and to revoke such
83 registrations for certain noncompliance; authorizing
84 the department to adopt rules; creating s. 559.954,
85 F.S.; providing requirements for litigation financing
86 contracts; creating s. 559.955, F.S.; prohibiting
87 litigation financiers from engaging in specified
88 conduct; creating s. 559.956, F.S.; providing
89 disclosure requirements for litigation financing
90 contracts; creating s. 559.957, F.S.; providing for
91 the assignment of contingent rights to civil action or
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 1
92 claim proceeds; specifying the priority of liens
93 against or rights to civil action or claim proceeds;
94 creating s. 559.958, F.S.; authorizing litigation
95 financiers to assess specified interest, fees, and
96 charges; providing requirements for such interest,
97 fees, and charges; prohibiting a litigation financier
98 from assessing specified fees or charges; creating s.
99 559.959, F.S.; requiring the disclosure of litigation
100 financing contracts under specified circumstances;
101 creating s. 559.961, F.S.; providing that specified
102 communications between attorneys and litigation
103 financiers do not affect statutory or common-law
104 privilege; creating s. 559.962, F.S.; providing that
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Page 5 of 5
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 7041 (2020)
Amendment No. 2
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Leek offered the following:
3
4 Amendment
5 Remove lines 66-67 and insert:
6 in which a litigation financier provides to a consumer a funded
7 amount of $500,000 or less in exchange for an assignment of the
8 consumer's contingent right to
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Page 1 of 1
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: HB 7099 PCB SAC 20-06 Essential State Infrastructure
SPONSOR(S): State Affairs Committee; lngoglia
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: State Affairs Committee 18 Y, 2 N Johnson Williamson
1) Commerce Committee Keating
SUMMARY ANALYSIS
The bill addresses planning for and locating various types of infrastructure within the state.
Permitting for Use of Public Rights-of-Way by Utilities
Each local government with jurisdiction and control of a public road or publicly owned rail corridor is
authorized to prescribe and enforce reasonable rules or regulations related to placing and maintaining
utility facilities across, on, or within the right-of-way (ROW) limits of a road or publicly owned rail corridor
under its jurisdiction.
The bill provides that all permit applications required by a county or municipality for use of the public ROW
for any type of utility must be processed within specified timeframes. Under this process, a completed
permit application is deemed approved if the authority fails to approve or deny the application within 60
days of receipt, unless the review period is extended by mutual agreement.
Electric Vehicle Charging Station Infrastructure
Due to their efficiency, low operating costs, and low emissions profiles, interest in electric vehicles (EVs) is
increasing. However, the commercial success of EVs has been restricted in part due to their relatively high
up-front cost and limited range as compared to conventional gasoline-powered vehicles. Successful
adoption of EVs is dependent on the accessibility of charging stations.
The bill requires DOT, in coordination with other entities, to develop and adopt a master plan for EV
charging stations on the state highway system by July 1, 2021. The bill provides goals and objectives for
the master plan and requires DOT to update its master plan annually.
Conservation Easements
Current law defines a conservation easement as a right or interest in real property which is appropriate for
retaining land or water areas predominantly in their natural, scenic, open, agricultural, or wooded condition;
retaining such areas as suitable habitat for fish, plants, or wildlife; retaining the structural integrity or
physical appearance of sites or properties of historical, architectural, archaeological, or cultural
significance; or maintaining existing land uses.
The bill specifies that, for any land used for agriculture and subject to a conservation easement, the owner
of the land is not prohibited from voluntarily negotiating the use of the land for any public or private linear
facility, right of access, and related appurtenances.
The bill includes a finding that it fulfills an important state interest.
The bill has a fiscal impact on state government and may have a fiscal impact on local governments. See
Fiscal Analysis.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h7099.COM.D0CX
DATE: 2/25/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Permitting for Use of Public Rights-of-Way by Utilities
Present Situation
Pursuant to s. 337.401, F.S., the Department of Transportation (DOT) and each local government that
has jurisdiction and control of public roads or publicly owned rail corridors is authorized to prescribe and
enforce reasonable rules or regulations related to placing and maintaining utility facilities across, on, or
within the right-of-way (ROW) limits of any road or publicly owned rail corridors under its jurisdiction.
Each of these types of entities is individually referred to as an "authority" when acting in this capacity.
Each authority may authorize any person who is a resident of this state, or any corporation which is
organized under the laws of this state or licensed to do business within this state, to use a public ROW
for a utility 1 in accordance with the authority's rules or regulations. A utility may not be installed,
located, or relocated within a public ROW unless authorized by a written permit.
In 2017, the Legislature established an expedited permitting process for small wireless facilities 2 (SWF)
that a wireless provider3 seeks to place in the public ROW. 4 Under this process, a completed permit
application for a SWF is deemed approved if the authority fails to approve or deny the application within
60 days of receipt. This review period may be extended by mutual agreement. If an application is
denied, the applicant may cure the deficiencies and submit a revised application within 30 days after
denial. The revised application is deemed approved if the authority does not approve or deny it within
30 days of receipt. If the authority provides for administrative review of its denial of an application, the
authority must complete its review and issue a written decision within 45 days of a written request for
review.
In 2019, the Legislature expanded the application of this expedited permitting process to include all
communications facilities that a provider of communications services5 seeks to place in the public
1
S. 337.40l(l)(a), F.S., refers to "any electric transmission, telephone, telegraph, or other communications services lines; pole lines;
poles; railways; ditches; sewers; water, heat, or gas mains; pipelines; fences; gasoline tanks and pumps; or other structures referred to
in this section and in ss. 337.402, 337.403, and 337.404" as a "utility."
2
"Small wireless facility," s. 337.401(7)(b)IO., F.S., means a wireless facility that meets the following qualifications:
• Each antenna associated with the facility is located inside an enclosure ofno more than 6 cubic feet in volume or, in the case
of antennas that have exposed elements, each antenna and all of its exposed elements could fit within an enclosure ofno more
than 6 cubic feet in volume; and
• All other wireless equipment associated with the facility is cumulatively no more than 28 cubic feet in volume. The following
types of associated ancillary equipment are not included in the calculation of equipment volume: electric meters, concealment
elements, telecommunications demarcation boxes, ground-based enclosures, grounding equipment, power transfer switches,
cutoff switches, vertical cable runs for the connection of power and other services, and utility poles or other support
structures. S. 337.401(7)(b)10., F.S.
3
"Wireless provider" means wireless infrastructure provider or a wireless services provider. S. 337.401(7)(b)l4., F.S.
4
Ch. 2017-136, L.O.F., codified in pertinent part at s. 337.401(7)(d)7.-9., F.S.
5
"Communications services" means "the transmission, conveyance, or routing of voice, data, audio, video, or any other information or
signals, including video services, to a point, or between or among points, by or through any electronic, radio, satellite, cable, optical,
microwave, or other medium or method now in existence or hereafter devised, regardless of the protocol used for such transmission or
conveyance. The term includes such transmission, conveyance, or routing in which computer processing applications are used to act
on the form, code, or protocol of the content for purposes of transmission, conveyance, or routing without regard to whether such
service is referred to as voice-over-Internet-protocol services or is classified by the Federal Communications Commission as enhanced
or value-added." The term does not include: information services; installation or maintenance of wiring or equipment on a customer's
premises; the sale or rental of tangible personal property; the sale of advertising, including, but not limited to, directory advertising;
bad check charges; late payment charges; billing and collection services; or Internet access service, electronic mail service, electronic
bulletin board service, or similar online computer services. Ss. 337.401(5) and 202.11(1), F.S.
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DATE: 2/25/2020
ROW. 6 No timeframes are specified in current law for processing permit applications to use the public
ROW for any other type of utility.
Effect of Proposed Changes
The bill provides that all permit applications required by a county or municipality for use of the public
ROW for any type of utility7 must be processed within the expedited timeframe that currently applies
only to permit applications submitted for communications facilities. Thus, the bill expands application of
the expedited permitting process to include public ROW permits for, among other things, electric,
natural gas, water, and sewer facilities.
Electric Vehicle Charging Station Infrastructure
Present Situation
Due to their efficiency, low operating costs, and low emissions profiles, 8 interest in electric vehicles
(EVs) is increasing. However, the commercial success of EVs has been restricted in part due to their
relatively high up-front cost and limited range as compared to conventional gasoline-powered vehicles. 9
While advancements in EV-related technology are continuing, EV manufacturing is rising, and EV
prices are dropping, representatives in both the government and the private sectors acknowledge that
successful adoption of EVs is dependent on the accessibility of charging stations. 10
EV charging equipment is generally classified based on the rate at which the equipment charges the
EV batteries. Charging times vary depending on the depletion level of the battery, how much energy
the battery holds, the type of battery, and the type of supply equipment. According to the Alternative
Fuels Data Center (AFDC}, charging times can range from less than 20 minutes to 20 hours or more.
Potential driving distance ranges from:
• Two to five miles of range per one hour of charging for AC Level 1 supply equipment;
• Ten to 20 miles per one hour of charging for AC Level 2 supply equipment; and
• Sixty to 80 miles per 20 minutes of charging for DC fast charging supply equipment. 11
According to AFDC, EV charging for most drivers occurs at home or at fleet facilities. 12
Level 1 (home) charging cords come as standard equipment on new EVs, require only a standard 120-
volt outlet, and can add about 50 miles of range in an overnight charge. Level 1 charging is sufficient
for low- and medium-range EV drivers with relatively low daily driving. 13
Level 2 (home and public) charging commonly requires a 240-volt circuit, with the charging rate
dependent on the rate at which a vehicle can accept a charge and the maximum current available. An
eight-hour charge adds about 180 miles of range with a typical 30-amp circuit. This method may
require the purchase of a home charging unit and modifications to a home electric system, but charges
6
Ch. 2019-131, L.O.F.
7 Supra note 96.
8
See U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, Electric Vehicle Benefits,
https://www.energy.gov/eere/electricvehicles/electric-vehicle-benefits (last visited Feb, 24, 2020).
9
See the Federal Highway Administration's FHWA NHTS Brief Electric Vehicle Feasibility, July 2016, pp. 1-2, available at
https://nhts.oml.gov/briefs/EVFeasibility2016070 l .pdf (last visited Feb. 24, 2020).
10
Id. at p. 2. See also CBS Chicago, Electric Vehicle Sales on the Rise, But More Charging Stations Needed To Keep the Trend
Going, September 19, 2019, available at https://chicago.cbslocal.com/2019/09/19/electric-vehicles-super-fast-charging-stations/ (last
visited Feb. 24, 2020).
11
See Alternative Fuels Data Center (AFDC), Developing Infrastructure to Charge Plug-In Electric Vehicles,
https://afdc.energy.gov/fuels/electricity_infrastructure.html (last visited Feb. 24, 2020).
12 Id.
13
Union of Concerned Scientists, Electric Vehicle Charging (March 2018) available at https://www.ucsusa.org/resources/electric-
vehicle-charging-types-time-cost-and-savings (last visited Feb. 24, 2020).
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DATE: 2/25/2020
from two to eight times faster than a Level 1, depending on the amperage and the vehicle. These
chargers are most commonly found at public charging places like offices, grocery stores, and parking
garages. 14
DC Fast Chargers (public charging) can typically add 50 to 90 miles of range in 30 minutes, depending
on the charging station's power capacity and the make of the EV. These chargers are best used for
longer travel distances; vehicles used the major portion of a day, such as taxis; and for vehicles whose
drivers have limited access to home charging. 15
Under Florida law, the provision of EV charging to the public by a nonutility is not considered the retail
sale of electricity. 16 Thus, EV charging providers are not subject to regulation by the Public Service
Commission (PSC) as public utilities. To provide consistency for consumers and industry, the
Department of Agriculture and Consumer Services (DACS) is required to adopt rules establishing
definitions, methods of sale, labeling requirements, and price-posting requirements for EV charging
stations.17
Through the state Office of Energy, DACS maintains a database of public EV charging station locations
in Florida, listed by county on its website. The website identifies 930 charging station locations by
specific address. 18 In addition, the Office of Energy is currently working on an EV Roadmap with the
goals of:
• Identifying EV charging infrastructure impacts on the electric grid;
• Identifying solutions for any negative impacts;
• Locating areas that lack EV charging infrastructure;
• Identifying best practices for siting EV charging stations; and
• Identifying technical or regulatory barriers to expansion of EV charging infrastructure. 19
Established in 1993 as part of the U.S. Department of Energy's Vehicle Technologies Office, Clean
Cities coalitions have funded hundreds of transportation projects nationwide in furtherance of their
mission to foster the nation's economic, environmental, and energy security by working locally to
advance affordable, domestic transportation fuels, energy efficient mobility systems, and other fuel-
°
saving technologies and practices. 2 Clean Cities coalitions are comprised of businesses, fuel
providers, vehicle fleets, state and local government agencies, and community organizations. Each
coalition is led by a coordinator who tailors projects and activities to capitalize on the unique
opportunities within their communities. The U.S. Department of Energy has designated four Clean
Cities coalitions in Florida: North Florida, Central Florida, Tampa, and Southeast Florida. 21
Effect of Proposed Changes
The bill requires DOT, in coordination with the state Office of Energy and the designated Clean Cities
coalitions in Florida, or other appropriate public or private entities, to develop and adopt a master plan
14 Id.
1s Id.
16
S. 366.94(1), F.S.
17
S. 366.94(2), F.S. DACS has incorporated into its rules, by reference, various sections of the National Institute of Standards and
Technology (NIST), Handbook 130, Uniform Laws and Regulations in the Areas of Legal Metro logy and Engine Fuel Quality, 2017
Edition, regarding the sale of various fuels. See Rule 51-22.003, F.A.C.
18
Florida Department of Agriculture and Consumer Services, Office of Energy, Transportation,
https://www.fdacs.gov/Energy/Florida-Energy-Clearinghouse/Transportation (last visited Feb. 24, 2020); s. 377.815, F.S., authorizes
DACS to post information on its website relating to alternative fueling stations, including EV charging stations, available for public
use.
19
DACS, Agency Analysis of2020 Senate Bill 452, p.2. (Oct. 9, 2019).
20
U.S. Department of Energy, Office of Energy Efficiency & Renewable Energy, Clean Cities Coalition Network,
https://cleancities.energy.gov/ (last visited Feb. 24, 2020).
21 Id.
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DATE: 2/25/2020
for EV charging stations on the state highway system (SHS) by July 1, 2021, and to update it annually
by July 1.
The master plan's goals and objectives include, but are not limited to:
• Identifying optimal locations on the SHS for the development of EV charging stations to facilitate
EV short-range and long-range travel and adequately serving evacuation routes;
• Identifying locations that would serve existing EVs or encourage the expansion of EV use;
• Evaluating and comparing the types of EV charging stations available at present and in the
future, including the technology and infrastructure incorporated in such stations, for the purpose
of identifying any advantages to developing a particular type of station;
• Evaluating the economic potential for EV charging stations and considering strategies to
develop that potential, including methods for building partnerships with local governments, other
state and federal entities, electric utilities, the business community, and the public in support of
EV charging stations; and
• Identifying specific projects that will accomplish these goals and objectives.
Conservation Easements
Present Situation
Current law defines a conservation easement as a right or interest in real property, which is appropriate
for:
• Retaining land or water areas predominantly in their natural, scenic, open, agricultural, or
wooded condition;
• Retaining such areas as suitable habitat for fish, plants, or wildlife;
• Retaining the structural integrity or physical appearance of sites or properties of historical,
architectural, archaeological, or cultural significance; or
• Maintaining existing land uses. 22
A conservation easement must prohibit or limit any or all of the following:
• Construction or placing of buildings, roads, signs, billboards or other advertising, utilities, or
other structures on or above the ground;
• Dumping or placing of soil or other substance or material as landfill or dumping or placing of
trash, waste, or unsightly or offensive materials;
• Removal or destruction of trees, shrubs, or other vegetation;
• Excavation, dredging, or removal of loam, peat, gravel, soil, rock, or other material substance in
such manner as to affect the surface;
• Surface use except for purposes that permit the land or water area to remain predominantly in
its natural condition;
• Activities detrimental to drainage, flood control, water conservation, erosion control, soil
conservation, or fish and wildlife habitat preservation;
• Acts or uses detrimental to such retention of land or water areas; or
• Acts or uses detrimental to the preservation of the structural integrity or physical appearance of
sites or properties of historical, architectural, archaeological, or cultural significance. 23
Notwithstanding the restrictions imposed by conservation easements, the owner of the land, or the
owner of the conservation easement over the land, may voluntarily negotiate the sale or utilization of
such lands or easement for the construction and operation of linear facilities (e.g., public transportation
corridors and electric, telecommunication, or pipeline transmission lines and distribution facilities). 24
22
S. 704.06(1), F.S.
23 Id.
24
S. 704.06(11), F.S.
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DATE: 2/25/2020
Conservation easements are acquired in the same manner as other property interests, with the
exception of condemnation or eminent domain proceedings. 25 Conservation easements may be
acquired by any governmental body or agency or by a charitable corporation or trust whose purposes
include protecting natural, scenic, or open space values of real property; assuring its availability for
agricultural, forest, recreational, or open space use; protecting natural resources; maintaining or
enhancing air or water quality; or preserving sites or properties of historical, architectural,
archaeological, or cultural significance. 26
Conservation easements are perpetual, undivided interests in property that are created or stated in a
restriction, easement, covenant, or condition in any deed, will, or other instrument executed by or on
behalf of the property owner, or in any order of taking. 27 They must be recorded and indexed in the
same manner as any other instrument affecting the title to real property. 28
DACS, on behalf of the Board of Trustees of the Internal Improvement Trust Fund, may allocate money
to enter into agreements in order to promote and improve wildlife habitat; protect and enhance water
bodies, aquifer recharge areas, wetlands, and watersheds; perpetuate open space on lands with
significant natural areas; and protect agricultural 29 lands threatened by conversion to other uses. 30 To
achieve these purposes, DACS may accept applications for project proposals that purchase
conservation easements. 31
Effect of Proposed Changes
The bill specifies that, for any land that has traditionally been used for agriculture and is subject to a
conservation easement, the conservation easement laws do not limit the owner of the land from
voluntarily negotiating the use of the land for any public or private linear facility, right of access, and
related appurtenances.
The bill specifies that the only remedy to the owner of the conservation easement for the construction
and operation of any public or private linear facilities and related access and appurtenances is
reasonable compensation based on diminution of value of its interest in the conservation easement.
The bill specifies that it does not preclude the applicability of any environmental permitting
requirements applicable to a linear facility under state law or agency rules.
B. SECTION DIRECTORY:
Section 1. Amends s. 337.401, F.S., relating to the use of right-of-way for utilities.
Section 2. Creates s. 339.287, F.S., relating to EV charging station master plan requirements.
Section 3. Amends s. 704.06, F.S., relating to conservation easements.
Section 4. Provides a statement of important state interest.
Section 5. Provides an effective date of July 1, 2020.
25 S. 704.06(2), F.S.
26 S. 704.06(3), F.S.
27
S. 704.06(2), F.S.
28
S. 704.06(5), F.S.
29
S. 570.02(1), F.S., defines the term "agriculture" as the production of plants and animals useful to humans, including aquaculture,
horticulture, floriculture, viticulture, forestry, dairy, livestock, poultry, bees, and any and all forms of farm products and farm
production.
30
S. 570.71(1), F.S.
31
S. 570.71(2)(a), F.S.
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DATE: 2/25/2020
11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill does not appear to have an impact on state revenues.
2. Expenditures:
The bill has an indeterminate negative fiscal impact to DOT associated with the development of the
master plan. DACS may incur a negative fiscal impact associated with assisting DOT in preparing
the master plan. The departments should be able to absorb the impacts within existing resources.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill does not appear to have an impact on local government revenues.
2. Expenditures:
Counties and municipalities may incur expenditures associated with complying with the specified
timeframes to approve permits for utilities within their rights-of-way. However, the expenditures
may be insignificant.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Requiring specified timeframes for local governments to process utility ROW permits may reduce
permit processing times in some cases for companies wishing to place utilities in the public ROW. The
bill allows an owner of land that has traditionally been used for agriculture and is subject to a
conservation easement to voluntarily negotiate the use of the land for any public or private linear
facility, right of access, and related appurtenances. This provision may result in a positive fiscal impact
to the private sector for those individuals who negotiate for the additional use of such easements.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, s. 18 of the Florida Constitution may apply
because the bill requires counties and municipalities to act on applications for permits relating to the
use of rights-of-way for utilities within a specified timeframe. However, an exemption may apply if the
provisions are found to have an insignificant fiscal impact. In addition, an exception may apply if the
bill is approved by a two-thirds vote of the membership of each house because the bill includes a
finding that it fulfills an important state interest.
2. Other:
None.
8. RULE-MAKING AUTHORITY:
The bill does not provide a grant of rulemaking authority, nor does it require rulemaking.
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DATE: 2/25/2020
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
None.
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DATE: 2/25/2020
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
1 A bill to be entitled
2 An act relating to essential state infrastructure;
3 amending s. 337.401, F.S.; specifying permit
4 application timeframes required for the installation,
5 location, or relocation of utilities within rights-of-
6 way; creating s. 339.287, F.S.; defining the term
7 "master plan for electric vehicle charging stations"
8 or "master plan"; requiring the Department of
9 Transportation, in coordination with the Office of
10 Energy within the Department of Agriculture and
11 Consumer Services and the Florida Clean Cities
12 Coalitions, or other appropriate entities, to develop
13 and adopt by a specified date a master plan for
14 electric vehicle charging stations on the state
15 highway system; specifying goals and objectives of the
16 master plan; requiring the master plan to be updated
17 annually by a specified date; amending s. 704.06,
18 F.S.; providing construction relating to the rights of
19 an owner of land that has been traditionally used for
20 agriculture and is subject to a conservation easement;
21 providing construction relating to applicability of
22 certain permit requirements; providing a declaration
23 of important state interest; providing an effective
24 date.
25
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hb7099-00
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
26 Be It Enacted by the Legislature of the State of Florida:
27
28 Section 1. Subsection (2) of section 337.401, Florida
29 Statutes, is amended to read:
30 337.401 Use of right-of-way for utilities subject to
31 regulation; permit; fees.-
32 (2) The authority may grant to any person who is a
33 resident of this state, or to any corporation that which is
34 organized under the laws of this state or licensed to do
35 business within this state, the use of a right-of-way for the
36 utility in accordance with such rules or regulations as the
37 authority may adopt.~ Ne utility may not shall be installed,
38 located, or relocated unless authorized by a written permit
39 issued by the authority. However, for public roads or publicly
40 owned rail corridors under the jurisdiction of the department, a
41 utility relocation schedule and relocation agreement may be
42 executed in lieu of a written permit. The permit must shall
43 require the permitholder to be responsible for any damage
44 resulting from the issuance of such permit. The authority may
45 initiate injunctive proceedings as provided ins. 120.69 to
46 enforce provisions of this subsection or any rule or order
47 issued or entered into pursuant thereto. A permit application
48 required under this subsection by a county or municipality
49 having jurisdiction and control of the right-of-way of any
50 public road must be processed and acted upon in accordance with
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hb7099-00
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
51 the timeframes provided in subparagraphs (7) (d)7., 8., and 9.
52 Section 2. Section 339.287, Florida Statutes, is created
53 to read:
54 339.287 Electric vehicle charging stations; master plan
55 requirements.-
56 ( 1) As used in this section, the term "master plan for
57 electric vehicle charging stations" or "master plan" means a
58 comprehensive plan of the department which describes current and
59 future plans for the development of electric vehicle charging
60 stations on the state highway system.
61 (2) The department, in coordination with the Office of
62 Energy within the Department of Agriculture and Consumer
63 Services and the Florida Clean Cities Coalitions designated by
64 the United States Department of Energy, or other appropriate
65 public or private entities, shall develop and adopt a master
66 plan for electric vehicle charging stations on the state highway
67 system by July 1, 2021.
68 (3) The goals and objectives of the master plan include,
69 but are not limited to, all of the following:
70 (a) Identifying optimal locations on the state highway
71 system for the development of electric vehicle charging stations
72 as a means of facilitating electric vehicle short-range and
73 long-range travel and adequately serving evacuation routes in
74 this state.
75 (b) Identifying locations that would serve existing
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hb7099-00
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
76 electric vehicles or encourage the expansion of electric vehicle
77 use in this state.
78 (c) Evaluating and comparing the types of electric vehicle
79 charging stations available at present and in the future,
80 including the technology and infrastructure incorporated in such
81 stations, for the purpose of identifying any advantages to
82 developing a particular type of station.
83 (d) Evaluating the economic potential for electric vehicle
84 charging stations in this state and considering strategies to
85 develop that potential, including, but not limited to, methods
86 of building partnerships with local governments, other state and
87 federal entities, electric utilities, the business community,
88 and the public in support of electric vehicle charging stations.
89 (e) Identifying specific projects that will accomplish the
90 goals and objectives of this section.
91 (4) After its adoption, the master plan shall be updated
92 annually by July 1.
93 Section 3. Subsection (11) of section 704.06, Florida
94 Statutes, is amended to read:
95 704.06 Conservation easements; creation; acquisition;
96 enforcement.-
97 (ll)J..tl Nothing in This section or other provisions of law
98 do not shall be eonstrued to prohibit or limit the owner of
99 land, or the owner of a conservation easement over land, to
100 voluntarily negotiate the sale or use utilization of such lands
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
101 or easement for the construction and operation of linear
102 facilities, including electric transmission and distribution
103 facilities, telecommunications transmission and distribution
104 facilities, pipeline transmission and distribution facilities,
105 public transportation corridors, and related appurtenances, nor
106 does shall this section prohibit the use of eminent domain for
107 said purposes as established by law. In any legal proceeding to
108 condemn land for the purpose of construction and operation of a
109 linear facility as described above, the court shall consider the
110 public benefit provided by the conservation easement and linear
111 facilities in determining which lands may be taken and the
112 compensation paid.
113 (b) For any land that has traditionally been used for
114 agriculture, as that term is defined ins. 570.02, and is
115 subject to a conservation easement entered into at any time
116 pursuant to s. 570.71, this section ors. 570.71 does not limit
117 the owner of the land to voluntarily negotiating the use of the
118 land for any public or private linear facility, right of access,
119 and related appurtenances, and reasonable compensation based on
120 diminution in value of its interest in the conservation easement
121 shall be the only remedy to the owner of the conservation
122 easement for the construction and operation of any public or
123 private linear facilities and related access and appurtenances.
124 (c) This section does not preclude the applicability of
125 any environmental permitting requirements applicable to a linear
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 7099 2020
126 facility pursuant to cha2ters 369-380 or chapter 403 or any
127 agency rules ado2ted 2ursuant to those cha2ters.
128 Section 4. The Legislature finds and declares that this
129 act fulfills an important state interest.
130 Section 5. This act shall take effect July 1, 2020.
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hb7099-00
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for CS/CS/HB 895 Insurance
SPONSOR(S): Commerce Committee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Commerce Committee Lloyd ... Hamon
SUMMARY ANALYSIS
The bill makes the following changes regarding insurance:
Civil Remedies against Insurers
Florida law imposes a duty of good faith on an insurer in negotiating the settlement of a claim with the insured
or a third party. This means the insurer must attempt in good faith to settle a claim when, under the
circumstances, it can settle if it acts fairly and honestly toward its insured and with due regard to his or her
interest. An insurer acting in bad faith may harm the insured party, by failing to settle a third party's claim
against the insured, exposing the insured to greater liability. It could also harm a third party to the insurance
contract by failing to settle its claim against the insured. Either an insured or a third party to the insurance
contract can sue the insurer for bad faith. A jury decides whether the insurer acted in bad faith and determines
the amount of damages.
• Claimant's Good Faith Requirement - The bill creates a statutory good faith obligation on the insured, claimant,
and the representative of the insured or claimant. In an action alleging insurer bad faith, the jury (or judge, in a
bench trial) must consider whether the plaintiff and their representative acted in good faith and if they failed to
so act, make a reasonable reduction in the damages awarded, if any.
• Bar to Civil Remedy - The bill prohibits a third-party lawsuit for insurer bad faith in a liability claim, if there is a
single claimant and the insurer paid the lesser of the claimant's demand or policy limits or if there are multiple
claimants and the insurer submits the matter at policy limits to the court for resolution of the claimant's
percentage share of the policy limit amount either within 90 days following the second notice of claim or during
the 60-day cure period following receipt of the required pre-suit notice.
• Filing of Pre-Suit Notice and Tolling of Statute of Limitation - Florida law requires a pre-suit notice to the
Department of Financial Services (DFS) and the insurer 60 days prior to suing on a bad faith claim, but no
particular insurer address is specified. The bill requires the insurer to designate an email address for delivery of
the notice and mandates that DFS forward notices to that email. It starts the 60 days from the day the insurer
receives the forwarded notice. Also, it extends the statute of limitation for 60 days, if the property appraisal
process is invoked in the claim.
Motor Vehicle Personal Injury Protection
Florida's Motor Vehicle No-Fault Law requires motorists to carry no-fault insurance known as personal injury
protection (PIP) coverage. In exchange for a limited exemption from tort liability, drivers receive $10,000 in
emergency medical and disability benefits ($2,500 for non-emergency medical conditions) and certain other
benefits. Medical benefit payments are overdue if not paid within 30 days. Medical providers may sue insurers for
overdue payments only after filing a written pre-suit notice known as a PIP demand letter. The law specifies the
minimum content of the demand letter.
• Pre-Suit Notice (Demand Letter) -The bill increases requirements governing the content of the demand letter,
including line item detailing of the amounts in dispute and proof of emergency medical condition, if applicable. It
requires the demand letter to substantially comply with statutory requirements. The bill bars a subsequent
lawsuit if the demand letter was not substantially compliant, the insurer fully paid the claim, or the charge was
not included on a demand letter.
The bill has no impact on state or local government revenues or expenditures. It may have a positive impact on
the private sector.
The bill is effective on July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: pcs0895.COM.D0CX
DATE: 2/26/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Obligations of Insurer to Insured
A liability insurer generally owes two major contractual duties to its insured in exchange for premium
payments-the duty to indemnify and the duty to defend. The duty to indemnify refers to the insurer's
obligation to issue payment either to the insured or a beneficiary on a valid claim. The duty to defend
refers to the insurer's duty to provide a defense for the insured in court against a third party with respect
to a claim within the scope of the insurance contract. 1 The Florida Supreme Court explained the
difference between indemnity policies and liability policies:
Under indemnity policies, the insured defended the claim and the insurance company
simply paid a claim against the insured after the claim was concluded. Under liability
policies, however, insurance companies took on the obligation of defending the insured,
which, in turn, made insureds dependent on the acts of the insurers; insurers had the
power to settle and foreclose an insured's exposure or to refuse to settle and leave the
insured exposed to liability in excess of policy limits. 2
Historically, damages in actions for breaches of insurance contracts were limited to those contemplated
by the parties when they entered into the contract. 3 As liability policies began to replace indemnity
policies as the standard insurance policy form, courts recognized that insurers owed a duty to act in
good faith towards their insureds. 4
Common Law and Statutory Bad Faith
Florida courts for many years have recognized an additional duty that does not arise directly from the
insurance contract, the common law duty of good faith on the part of an insurer to the insured in
negotiating settlements with third-party claimants. 5 The common law rule is that a third-party beneficiary
who is not a formal party to a contract may sue for damages sustained as the result of the acts of one
of the parties to the contract. 6 This is known as a third-party claim of bad faith.
At common law, the insured cannot raise a bad faith claim against the insurer outside of the third-party
claim context. 7 In 1982, the Legislature enacted s. 624.155, F.S. Section 624.155, F.S., recognizes a
claim for bad faith against an insurer not only in the instance of settlement negotiations with a third
party but also for an insured seeking payment from his or her own insurance company. This is known
as a first-party claim of bad faith.
Section 624.155, F.S., provides that any party may bring a bad faith civil action against an insurer, and
defines bad faith on the part of the insurer as:
• Not attempting in good faith to settle claims when, under all the circumstances, it could and should
have done so, had it acted fairly and honestly toward its insured with due regard for her or his
interests;
• Making claims payments to insureds or beneficiaries not accompanied by a statement setting forth
the coverage under which payments are being made; or
1 See 16 Williston on Contracts s. 49:103 (41h Ed.).
2
State Farm Mutual Automobile Insurance Company v. Laforet, 658 So.2d 55, 58 (Fla. 1995).
i Id.
4
Id.
5 Auto. Mut. lndem. Co. v. Shaw, 184 So. 852 (Fla. 1938).
6
Thompson v. Commercial Union Insurance Company, 250 So.2d 259 (Fla. 1971 ).
7
Laforet, 658 So.2d at 58-59.
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• Except as to liability coverages, failing to promptly settle claims, when the obligation to settle the
claim has become reasonably clear, under one portion of the insurance policy coverage in order to
influence settlements under other portions of the insurance policy coverage. 8
In order to bring a bad faith claim under the statute, a plaintiff must first give the insurer 60 days written
notice of the alleged violation. The insurer has 60 days after the required notice is filed to pay the
damages or correct the circumstances giving rise to the violation. 9 Because first-party claims are only
statutory, a first-party insurer bad faith cause of action does not exist until the 60-day cure period
provided in the statute expires without payment by the insurer. 10 Third-party claims, on the other hand,
exist both in statute and at common law, so the insurer cannot guarantee avoidance of a bad faith claim
by curing within the statutory period. 11
In interpreting what it means for an insurer to act fairly toward its insured, Florida courts have held that
when the insured's liability is clear and an excess judgment is likely due to the extent of the resulting
damage, the insurer has an affirmative duty to initiate settlement negotiations. 12 If a settlement is not
reached, the insurer has the burden of showing that there was no realistic possibility of settlement
within policy limits. 13 Failure to settle on its own, however, does not mean that an insurer acts in bad
faith. Negligent failure to settle does not rise to the level of bad faith. Negligence may be considered by
the jury because it is relevant to the question of bad faith but a cause of action based solely on
negligence is not allowed. 14
Third-Party Claims of Bad Faith
A third-party bad faith claim arises when an insurer fails in good faith to settle a third party's claim
against the insured within policy limits and exposes the insured to liability in excess of his or her
insurance coverage. 15 The Florida Supreme Court has described an insurer's duty to its insureds:
An insurer, in handling the defense of claims against its insured, has a duty to use the
same degree of care and diligence as a person of ordinary care and prudence should
exercise in the management of his own business. For when the insured has surrendered
to the insurer all control over the handling of the claim, including all decisions with regard
to litigation and settlement, then the insurer must assume a duty to exercise such control
and make such decisions in good faith and with due regard for the interests of the
insured. This good faith duty obligates the insurer to advise the insured of settlement
opportunities, to advise as to the probable outcome of the litigation, to warn of the
possibility of an excess judgment, and to advise the insured of any steps he might take
to avoid same. The insurer must investigate the facts, give fair consideration to a
settlement offer that is not unreasonable under the facts, and settle, if possible, where a
reasonably prudent person, faced with the prospect of paying the total recovery, would
do so. Because the duty of good faith involves diligence and care in the investigation
and evaluation of the claim against the insured, negligence is relevant to the question of
good faith. The question of failure to act in good faith with due regard for the interests of
the insured is for the jury. 16
8
S. 624.155(l)(b)l.-3., F.S.
9
S. 624.155(3)(d), F.S.
10
Talat Emterprises vv. Aetna Casualty and Surety Company, 753 So.2d 1278, 1284 (Fla. 2000).
11
Macola v. Government Employees Insurance Company, 953 So.2d 451 (Fla. 2006).
12
Powell v. Prudential Property and Casualty Insurance Company, 584 So.2d 12, 14 (Fla. 3d DCA 1991 ).
t3 Id.
14
Delaune v. Liberty Mutual Insurance Company, 314 So.2d 601,603 (Fla. 4th DCA 1975).
15
Opperman v. Nationwide Mutual Fire Insurance Company, 515 So.2d 263, 265 (Fla. 5th DCA 1987).
16
Boston Old Colony Insurance Company v. Gutierrez, 386 So.2d 783, 785 (Fla. l 980)(intemal citations omitted).
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In light of this heightened duty on the part of the insurer, Florida courts focus on the actions of the
insurer, not the claimant. 17 Whether an insurer acted in bad faith is determined by the totality of the
circumstances:
In Florida, the question of whether an insurer has acted in bad faith in handling claims
against the insured is determined under the totality of the circumstances standard. Each
case is determined on its own facts and ordinarily the question of failure to act in good
faith with due regard for the interests of the insured is for the jury. 18
The focus in a bad faith case is on the conduct of the insurer but the conduct of the claimant is relevant
to whether there was a realistic opportunity for settlement. 19 A court, for example, will look at the terms
of a demand for settlement to determine if the insurer was given a reasonable amount of time to
investigate the claim and make a decision whether settlement would be appropriate under the
circumstances. One court held that dismissal of a bad faith claim was proper where the settlement
demand in question gave a 10-day window, pointing out that "[i]n view of the short space of time
between the accident and institution of suit, the provision of the offer to settle limiting acceptance to 10
days made it virtually impossible to make an intelligent acceptance." 20 Although in this particular
circumstance the court found that 10 days was not enough, it is not clear exactly what time period or
other conditions for acceptance would be permissible, because courts look at the facts on a case-by-
case basis and the current statute is silent on this point.
In Berges v. Infinity Insurance Company, dissenting justices expressed concern that there "is a strategy
which consists of setting artificial deadlines for claims payments and the withdrawal of settlement offers
when the artificial deadline is not met." 21 It was argued that it is a "common practice for a party
contemplating litigation to submit a settlement offer that remains outstanding for only a finite period and
that a person injured by a policyholder may set any deadlines he desires-even an arbitrary or
unreasonable one." 22 Justice Wells concluded that set time periods in which all insurers must make
decisions on claims and issue payments are needed. 23
The majority in Berges held that courts must look to the totality of the circumstances. "The question of
bad faith in this case extends to [the insurer's] entire conduct in the handling of the claim, including the
acts or omissions [of the insurer] in failing to ensure payment of the policy limits within the time
demands." 24 Another court argued that setting a "minimum amount of time before any finding of bad
faith is possible runs counter to the analysis of ordinary care and prudent business practice ... Juries
are empaneled to apply the appropriate criteria to the particular facts of a given situation and to decide
whether the insurer acted prudently." 25
In Harvey v. Geico General Insurance Company, 26 the Florida Supreme Court explained that the critical
inquiry in a bad faith case is whether "the insurer diligently, and with the same haste and precision as if
it were in the insured's shoes, worked on the insured's behalf to avoid an excess judgment." 27 The court
said an insurer has an affirmative duty to initiate settlement negotiations in cases where liability is clear
and a judgment in excess of policy limits is likely. 28 The court said the lower court misapplied precedent
when it said an insurer could not be liable for bad faith when the insured's own actions were at least in
part responsible for the excess judgment. 29
17
Berges v. Infinity Insurance Company, 896 So.2d 665,677 (Fla. 2005)(explaining that "the focus in a bad faith case is not on the actions of the
claimant but rather on those of the insurer in fulfilling its obligations to the insured").
18
Berges, 896 So.2d at 680 (internal quotations and citations omitted).
19
Barry v. GEICO General Insurance Company, 938 So.2d 613,618 (Fla. 4th DCA 2006).
20
Delaune v. Liberty Mut. Ins. Co., 314 So.2d 601,603 (Fla. 4th DCA 1975).
21
Berges, 896 So.2d at 685 (Wells, J., dissenting).
22
Id. at 692 (Cantero, J., dissenting).
23
Id. at 686 (Wells, J ., dissenting).
24
Berges, 896 So.2d at 627.
25
Snowden ex. rel. Estate ofSnowden v. Lumbermans Mutual Casualty Company, 358 F.Supp.2d 1125, 1129 (N.D. Fla. 2003).
26
Harvey v. Geico General Insurance Company, 259 So.3d 1 (Fla. 2018).
27
Id. at 7.
28 Id.
29
Id. at 11.
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The Good Faith Duty in a Multiple Claimant Situation
In 2003, the Fourth District Court of Appeal considered how an insurer should carry out its duty of good
faith in a case with multiple claimants where the total damages far exceeded policy limits. 30 In that
case, the insured caused an automobile accident where five teens were killed and seven more were
seriously injured. The insurance company settled with three of the claimants and exhausted policy limits
on those settlements. Numerous claimants filed third-party bad faith claims against the insurer alleging
the insurer entered into settlements without due regard for the interests of the insured. 31
The court held that the same duties of good faith set forth in Boston Old Colony applied when there
were multiple claimants. The insurer must investigate all claims, keep the insured informed, and
minimize the amount of excess judgments by reasoned claim settlement. The insurer may still decide to
settle some claims and exclude others but the decision must be made "in keeping with its good faith
duty." 32
In Hernandez v. Travelers Insurance Co., 33 the court considered whether an insurance company, which
may be liable to several persons because of the negligence of its insured, could file an interpleader
action (an action where the court determines the distribution of the funds up to policy limits). The court
held that interpleader is not allowed under such circumstances. The court explained:
The plaintiff insurance company has only the derivative liability from its insured. One of
its liabilities is to defend its insured in the courts. It may not discharge that liability by
depositing a sum of money and saying to the courts, "divide it up." If the defendants
were all claiming the proceeds of a single fund and liability could exist as to only one of
the claimants, an interpleader would be appropriate. In the present cause, one action
cannot determine the entire controversy and liability may exist as to more than one
claimant. 34
Pre-Suit Notice and Tolling of the Statute of Limitation
In order to bring a bad faith claim under the statute, a plaintiff must first give the insurer and the
Department of Financial Services (DFS) 60 days' written notice of the alleged violation. 35 The 60-day
period begins on the date the notice is filed. While the notice is required to be provided to both DFS
and the insurer, 36 the statute is silent on what constitutes filing and whether the filing date is the date
the notice is received by DFS or the date it was received by the insurer. 37
The notice must include:
• The statutory provision which the insurer allegedly violated;
• The facts and circumstances giving rise to the violation;
• The name of any individual involved in the violation;
3
°Farinas v. Florida Farm Bureau General Ins. Co., 850 So.2d 555 (Fla. 4th DCA 2003).
31
Id. at 557-558.
32 Id. at 561.
33 356 So.2d 1342 (Fla. yct DCA 1978).
34
See Hernandez, 356 So.2d at 1344.
35
S. 624.155(3)(a), F.S.
36
Filing of the notice with the correct insurer has been held to be a condition precedent to maintaining a bad faith suit against the insurer. Lopez v.
GEICO Casualty Co., 968 F.Supp. 2d 1202, at 1209 (S.D. Fla. 2013). In Lopez, the plaintiff filed the notice with Government Employees Insurance
Company, a similarly named sister company instead of the actual insurer, GEICO Casualty Company. Because the statute of limitation had run out
following the flawed delivery of the notice, the Lopez case was dismissed with prejudice.
37 Filing of the notice with DFS has been held to establish the date that starts the 60-day cure period. Harper v. GEICO Gen. Ins. Co., 272 So. 3d 448
(Fla. 2nd DCA 2019). In Harper, the plaintiff filed the notice with DFS electronically on Dec. 19, 2013, and mailed the notice to GEICO with it
being received by GEICO on Dec. 26, 2013. When GEICO later paid the claim on Feb. 21, 2014, the payment was 65 days from the date DFS
received the notice, but 57 days from the date GEICO received the notice. The trial court held that GEICO paid the claim within the 60-day cure
period. On appeal, the Second DCA held that the 60-day cure period ran from the date DFS received the notice. The result allowed the plaintiff to
pursue a bad faith claim against GEICO for untimely payment of the claim.
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• Reference to specific policy language that is relevant to the violation, unless the person bringing the
civil action is a third party claimant; and
• A statement that the notice is given to perfect the right to pursue a civil remedy. 38
The statute of limitation for the filing of a lawsuit under s. 624.155, F.S., is tolled for 65 days following
the issuance of the notice described above. This extends the claimant's right to sue the insurer until
after the conclusion of the 60-day period following the notice within which the insurer may respond to
the notice by addressing the alleged violation.
Effect of the bill
Claimant's Good Faith Requirement
The bill creates a statutory good faith obligation on the insured, claimant, and the representative of the
insured or claimant. They must act in good faith in providing claim information, their demands against
the insurer, including setting deadlines that the insurer is expected to abide by, and in negotiating
settlement opportunities.
In any action claiming insurer bad faith under s. 624.155(1 )(b)1., F.S., the jury (or the judge, in the case
of a bench trial) must consider whether the insured or claimant, as applicable, or their representative
made good faith efforts to cooperate with the insurer's claim investigation. If the jury or judge, as
applicable, determines that they failed to act in good faith, then the jury or judge must make a
reasonable reduction in the damages awarded.
Bar to Civil Remedy against Insurers
In a third-party action for insurer bad faith regarding a liability claim, the action is barred, if:
• There is a single claimant and the insurer pays the claimant's demand or offers the policy limits,
whichever is less, during the pendency of the claim through the end of the 60-day cure period
following receipt of the required pre-suit notice.
• There are two or more claimants related to a single event whose combined claims exceed policy
limits and the insurer submits the matter to the court to allow the court to determine the each
claimant's relative share of the policy limits. Submission of the matter to the court must occur within
90 days of the second claimant filing a notice of claim or during the 60-day cure period that follows
insurer receipt of the required pre-suit notice. Nonetheless, the insurer remains obligated to defend
the insured.
Filing of the Pre-Suit Notice and Tolling of the Statute of Limitation
The bill provides that DFS must forward the required pre-suit notice via email to the insurer. It also
requires the insurer to designate an email address for the purposes of receiving such notices forwarded
by DFS. Additionally, the bill clarifies that the 60-day cure period runs from the date the insurer receives
the notice from DFS at the designated email address, rather than following "filing," which is not
currently defined. Since the notices will no longer be mailed and emailing them is a nearly
instantaneous process, the bill changes the statute of limitation tolling period from 65 days to 60 days,
thus removing the 5 days allotted for physical mailing through the postal service.
Motor Vehicle Personal Injury Protection - Pre-Suit Notice (Demand Letter)
Florida's Motor Vehicle No-Fault Law (No-Fault Law) 39 requires motorists to carry no-fault insurance
known as personal injury protection (PIP) coverage. The purpose of PIP coverage under the No-Fault
Law is to provide for medical, surgical, funeral, and disability insurance benefits without regard to who
is responsible for a motor vehicle accident. In return for assuring payment of these benefits, the No-
3s S. 624.155(3)(b), F.S.
39
Ss. 627.730-627.7405, F.S.
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Fault Law provides limitations on the right to bring lawsuits arising from motor vehicle accidents. Florida
motorists are required to carry $10,000 of PIP coverage. 40 However, motorcycles are excluded from
this requirement.
PIP General Provisions
Required Coverage All owners or registrants of motor vehicles with four or more wheels,
except school buses, limos, and taxicabs, are required to carry PIP. 41
Individuals Covered The named insured, relatives living in the same household, persons
operating the vehicle, passengers in the vehicle, and persons struck
and injured while not occupying the vehicle.
Tort Limitation Limited exemption from tort liability; injured persons may pursue
certain tort claims as specified by the PIP law.
Benefits $10,000 in emergency medical and disability benefits (limited to
$2,500 in medical benefits for non-emergency medical conditions) and
$5,000 in death benefits. Coverage of 60 percent of lost income due
to disability, not to exceed the $10,000 overall benefit limitation.
Timely Treatment Medical benefits are paid only if initial treatment is received within 14
days of the accident.
Timely Payment Payments are overdue if not paid within 30 days of insurer receipt of
written notice.
Medical Reimbursement 80 percent of reasonable medical expenses paid to eligible medical
providers. 42
Excluded Treatment Massage and acupuncture are not PIP medical benefits. Services,
supplies, or care that is not reimbursable under Medicare or workers'
compensation is not required to be reimbursed by the insurer.
Attorney Fees Prevailing insureds and beneficiaries may receive a reasonable
attorney fees award.
Pre-Suit Notice (Demand Letter)
Before anyone can sue for benefits under PIP coverage, they must file a written pre-suit notice with
insurer. The pre-suit notice cannot be filed until the claim payment is overdue. The notice must include
the following:
• The phrase "demand letter under s. 627.736";
• The name of the insured;
• A copy of assignment of rights, if the matter is brought by a third-party;
• The claim number or policy number;
• And the following, if the circumstances apply:
o Name of the medical provider (for treatment, services, accommodations, or supplies);
o An itemized statement specifying: 43
• The exact amount;
40 S. 627.7275, F.S. Under Florida's Financial Responsibility Law (ch. 324, F.S.), motorists must also provide proofofability to pay monetary
damages for Bodily Injury and Property Damage liability at the time of motor vehicle accidents or when serious traffic violations occur. The
Financial Responsibility Law requires $10,000, per person, and $20,000, per incident, of Bodily Injury coverage, and $10,000 of Property Damage
liability coverage.
41
This includes non-resident owners who keep a vehicle in Florida for more than 90 days during the previous 365 day. S. 627.733(2), F.S.
42
Insurers may limit reimbursements to a fee schedule tied to the Medicare allowed amount. S. 627.736(5)(a) 1., F.S. For many services, 80 percent
of200 percent of the Medicare allowed amount is the standard reimbursement under this fee schedule.
43
A completed claim form [CMS 1500 form, UB-92 form (HICF A 1450), or form adopted by the Office of Insurance Regulation, as applicable] or
lost wage statement previously submitted to the insurer may be used as the itemized statement. S. 627.736(10)(b)3., F.S. The CMS 1500 form and
UB-92 form (HICF A 1450) are standardized medical billing forms.
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• Date of treatment, service, or accommodation; and
• The type of benefit due;
o If the demand letter is responding to a withdrawal of pre-payment for services:
• A copy of the insurer's notice of withdrawal; and
• An itemized statement of the type, frequency, and duration of future treatment claimed to be
reasonable and medically necessary.
The demand letter must be sent by certified or registered U.S. Mail, return receipt requested. 44 The
letter must be sent to the name and address designated by the insurer for receipt of PIP demand letters
pursuant to statute. 45
Civil actions on the claim detailed in the demand letter are barred if the insurer pays the overdue claim,
along with a 10 percent penalty and interest (not to exceed $250), within 30 days of receipt of the
letter. 46 The insurer is not liable for the claimant's attorney fees if they timely comply with these
requirements.
The filing of a demand letter tolls the applicable statute of limitations for 30 days.
Effect of the bill
The bill applies the demand letter requirements to any related relief (i.e., attorney fees}, in addition to
the PIP benefits sought by the claimant. It also adds the following requirements:
• The demand letter must also include:
o A copy of the signed assignment of rights, if the claimant is not the insured;
• The assignment must predate the treatment, service, or accommodation, as applicable;
o Both the claim number and the policy number, rather than one or the other;
o The itemized statement must:
• Identify each treatment, service, or accommodation provided to the insured;
• Specify, using the previously billed line items, the:
• Date of each treatment, service, or accommodation;
• Amount charged; and
• Include the CMS 1500 form, UB-92 (HICFA 1450 form}, or OIR form, as applicable;
• Identify all billed line items in dispute;
• State:
• The factual or legal basis for the contention that the underpayment or non-payment is
incorrect;
• The amount that the claimant contends the insurer is required to pay, including
penalties, interest, and postage due.
If the claimant contends that the insured sustained an emergency medical condition, the demand letter
must include documentation of the emergency medical condition from a medical provider allowed under
the PIP law to determine such conditions. 47
The demand letter must substantially comply with the statutory requirements. If it does not substantially
comply:
• The penalty and interest due under the statute are waived; and
44
The postal costs may be recovered from the insurer, if they are requested in the demand letter. S. 627.736(10)(c), F.S.
45
"Each licensed insurer, whether domestic, foreign, or alien, shall file with the [Office of Insurance Regulation] the name and address of the
designated person to whom notices must be sent which the [Office of Insurance Regulation] shall make available on its Internet website. The name
and address on file with the [Office of Insurance Regulation] pursuant to s. 624.422 is deemed the authorized representative to accept notice pursuant
to this subsection ifno other designation has been made." S. 627.736(IO)(c), F.S.
46
In cases where the letter responded to a withdrawal of pre-payment of services, the action is barred if the insurer provides a written agreement
within 30 days to pay for such services and to pay a IO percent penalty (not to exceed $250) when the insurer pays for the future treatment. S.
627.736(10)(d), F.S.
47
Under PIP, non-emergency benefits are limited to $2,500, while emergency medical conditions may increase coverage to $IO,OOO.
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• The civil action is barred.
The civil action is also barred if the insurer timely issues full payment within the time allowed to respond
to the demand letter with payment, or if the civil action is for a claim for non-payment or underpayment
that was not identified on a demand letter.
B. SECTION DIRECTORY:
Section 1: Amends s. 624.155, F.S., relating to civil remedy.
Section 2: Amends s. 624.422, F.S., relating to service of process; appointment of Chief Financial
Officer as process agent.
Section 3:Amends s. 627.736, F.S., relating to required personal injury protection benefits; exclusions;
priority; claims.
Section 4. Providing an effective date of July 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
If litigation rates and costs are reduced, consumers may experience lower insurance costs.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have to
raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
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B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires the adoption of rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R D A H O U S E 0 F REPRESENTATIVES
PCS for CS/CS/HB 895 ORIGINAL 2020
1 A bill to be entitled
2 An act relating to insurance; amending s. 624.155,
3 F.S.; revising requirements and procedures for the
4 civil remedy notice provided to insurers and the
5 Department of Financial Services; revising the
6 timeframe for an insurer to pay damages or for certain
7 circumstances to be corrected; revising the period the
8 statute of limitations is tolled; creating a duty of
9 good faith by persons claiming against an insurer;
10 providing that an insurer does not violate its good
11 faith duty to settle claims and is not liable for a
12 certain failure if it meets certain conditions;
13 providing a limitation on an insurer's liability to
14 third-party claimants, under certain circumstances;
15 requiring triers of fact, under certain circumstances,
16 to consider whether insureds, claimants, or their
17 representatives made good faith efforts to cooperate
18 with insurers' investigations; requiring a reduction
19 or elimination of damages awarded against an insurer
20 for bad faith where the insured or claimant has also
21 acted in bad faith; amending s. 624.422, F.S.,
22 requiring insurers to file with the department certain
23 contact information for service of process; amending
24 s. 627.736, F.S.; specifying information required as
25 part of a pre-suit notice in motor vehicle personal
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26 injury protection claims; requiring information
27 relating to treatment and services provided to
28 claimants; requiring the identification of payments in
29 dispute; requiring claimants to substantially comply
30 with notice requirements; prohibiting relief to
31 claimants in certain circumstances; providing an
32 effective date.
33
34 Be It Enacted by the Legislature of the State of Florida:
35
36 Section 1. Subsection (3) of section 624.155, Florida
37 Statutes, is amended to read:
38 624.155 Civil remedy.-
39 ( 3) (a) As a condition precedent to bringing an action
40 under this section, the department and the authorized insurer
41 must have been given 60 days' written notice of the violation.
42 Notice to the authorized insurer must be forwarded by the
43 department to the insurer at the e-mail address designated by
44 the insurer under s. 624.422.
45 (b) The notice shall be on a form provided by the
46 department and shall state with specificity the following
47 information, and such other information as the department may
48 require:
49 1. The statutory provision, including the specific
50 language of the statute, which the authorized insurer allegedly
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51 violated.
52 2. The facts and circumstances giving rise to the
53 violation.
54 3. The name of any individual involved in the violation.
55 4. Reference to specific policy language that is relevant
56 to the violation, if any. If the person bringing the civil
57 action is a third party claimant, she or he shall not be
58 required to reference the specific policy language if the
59 authorized insurer has not provided a copy of the policy to the
60 third party claimant pursuant to written request.
61 5. A statement that the notice is given in order to
62 perfect the right to pursue the civil remedy authorized by this
63 section.
64 (c)l..:_ No action shall lie if, within 60 days after the
65 insurer receives filing notice from the department in accordance
66 with this subsection, the damages are paid or the circumstances
67 giving rise to the violation are corrected.
68 2. A third-party claimant shall have no action under sub-
69 paragraph (1) (b) 1. if:
70 a. There is a single claimant in a liability claim and the
71 insurer offers the lesser of policy limits or the claimant's
72 demand prior to the end of the 60 days, including the period
73 prior to the 60 days; or
74 b. If there are two or more claimants in a liability claim
75 making claims arising out of a single occurrence which in total
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76 exceed the available policy limits of one or more of the insured
77 parties who may be liable to the claimants, an insurer is not
78 liable beyond the available policy limits for failure to pay all
79 or any portion of the available policy limits to one or more of
80 the claimants, if within 90 days after receiving notice of the
81 second claim or during the 60 days the insurer files an
82 interpleader action under the Florida Rules of Civil Procedure.
83 The claimants are entitled to a prorated share of the policy
84 limits as determined by the trier of fact. An insurer's
85 interpleader action does not alter or amend the insurer's
86 obligation to defend its insured.
87 (d) The authorized insurer that is the recipient of a
88 notice filed pursuant to this section shall report to the
89 department on the disposition of the alleged violation.
90 (e) The applicable statute of limitations for an action
91 under this section shall be tolled for a period of 60 -6-§. days
92 after the insurer receives from the department by the mailing of
93 the notice required by this subsection or the mailing of a
94 subsequent notice required by this subsection.
95 (f) A notice required under this subsection may not be
96 filed within 60 days after appraisal is invoked by any party in
97 a residential property insurance claim.
98 (10) (a) The insured, claimant, or representative of the
99 insured or claimant has a duty to act in good faith in
100 furnishing information regarding the claim, in making demands of
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101 the insurer, in setting deadlines, and in attempts to settle a
102 claim. This duty does not create a separate cause of action and
103 may only be used as a setoff against damages awarded pursuant to
104 this subsection.
105 (b) In any action pursuant to sub-paragraph ( 1) (b) 1. :
106 1. the trier of fact must consider whether the insured,
107 claimant, or representative of the insured or claimant made good
108 faith efforts to cooperate with the insurer in the investigation
109 of the claim.
110 2. If the trier of fact finds that the insured, claimant,
111 or representative of the insured or claimant did not act in good
112 faith, the trier of fact must reasonably reduce the damages
113 awarded against the insurer.
114 Section 2. Subsection (2) of section 624.422, Florida
115 Statutes, is amended to read:
116 624.422 Service of process; appointment of Chief Financial
117 Officer as process agent.-
118 (2) Prior to its authorization to transact insurance in
119 this state, each insurer shall file with the department
120 designation of the name and address of the person to whom
121 process against it served upon the Chief Financial Officer is to
122 be forwarded. Each insurer shall also file with the department
123 designation of the name and e-mail address of the person to whom
124 the department shall forward civil remedy notices filed under
125 624.155. The insurer may change~ tfie designation at any time by
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126 a new filing.
127 Section 3. Subsection (10) of section 627.736, Florida
128 Statutes, is amended to read:
129 627.736 Required personal injury protection benefits;
130 exclusions; priority; claims.-
131 (10) DEMAND LETTER.-
132 (a) As a condition precedent to filing any action for
133 benefits or related relief under this section, written notice
134 of an intent to initiate litigation must be provided to the
135 insurer. Such notice may not be sent until the claim is
136 overdue, including any additional time the insurer has to pay
137 the claim pursuant to paragraph ( 4) (b) .
138 (b) The notice must state that it is a "demand letter
139 under s. 627.736" and state the following with specificity:
140 1. The name of the insured on whose behalf upon which
141 such benefits are being sought and, if the claimant is not the
142 insured, the notice shall include, including a copy of the
143 assignment signed by the insured prior to the delivery of any
144 such treatment, service or accommodation, and giving rights to
145 the claimant to seek benefits if the claiffiant is not the
146 insured.
147 2. The claim number and e-r policy number upon which such
148 claim was originally submitted to the insurer by either the
149 claimant or the insured.
150 3. Where To the extent applicable, the name of any
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151 medical provider who rendered to an insured the treatment,
152 services, accommodations, or supplies that form the basis of
153 such claim against the insurer. The notice shall be
154 accompanied by; and an itemized statement identifying each
155 treatment, service or accommodation provided to the insured,
156 and shall specify for each such treatment, service or
157 accommodation on a line item basis as previously billed to the
158 insurer specifying each exact affiount, the date of each
159 treatment, service, or accommodation, and the amount charged
160 type of benefit claiffied to be due. A completed form satisfying
161 the requirements of paragraph ( 5) (d) or the lost-wage
162 statement previously submitted, as applicable, shall be
163 included with ffiay be uoed ao the itemized statement. To the
164 extent that the demand involves an insurer's withdrawal of
165 payment under paragraph (7) (a) for future treatment not yet
166 rendered, the claimant shall attach a copy of the insurer's
167 notice withdrawing such payment and an itemized statement of
168 the type, frequency, and duration of future treatment claimed
169 to be reasonable and medically necessary.
170 4. The identification of all line items that the
171 claimant contends to be in dispute because of an insurer's
172 non-payment or underpayment, the legal or factual basis for
173 the claimant's position that the insurer's underpayment
174 payment or non-payment is incorrect, and the amount that the
175 clamant contends that the insurer is required to pay to fully
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176 resolve the dispute, including the specific amount of the
177 statutory penalty, interest and postage to be paid pursuant to
178 paragraphs (d) and (e).
179 (c) If the claimant contends that the insured had an
180 emergency medical condition, the notice shall be accompanied
181 by documentation demonstrating that the insured to whom the
182 treatment, services or accommodation was provided sustained an
183 emergency medical condition. The documentation shall be from
184 a provider identified in sub-paragraphs (1) (a) (1) or
185 (1) (a) (2).
186 lsU_-f-et Each notice required by this subsection must
187 substantially comply with the requirements of paragraphs (b)
188 and (c) and must be delivered to the insurer by United States
189 certified or registered mail, return receipt requested. A
190 notice that does not substantially comply with the
191 requirements of paragraphs (b) and (c) shall not trigger an
192 insurer's obligations under (e). Such postal costs shall be
193 reimbursed by the insurer if requested by the claimant in the
194 notice, when the insurer pays the claim. Such notice must be
195 sent to the person and address specified by the insurer for
196 the purposes of receiving notices under this subsection. Each
197 licensed insurer, whether domestic, foreign, or alien, shall
198 file with the office the name and address of the designated
199 person to whom notices must be sent which the office shall
200 make available on its Internet website. The name and address
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201 on file with the office pursuant to s. 624.422 is deemed the
202 authorized representative to accept notice pursuant to this
203 subsection if no other designation has been made.
204 ~-+e-t If, within 30 days after receipt of notice by the
205 insurer, the overdue claim specified in~ 4:-fte notice that
206 substantially complies with paragraphs (b) and (c) is paid by
207 the insurer together with applicable interest and a penalty of
208 10 percent of the overdue amount paid by the insurer, subject
209 to a maximum penalty of $250, no action may be brought against
210 the insurer. If the demand involves an insurer's withdrawal of
211 payment under paragraph (7) (a) for future treatment not yet
212 rendered, no action may be brought against the insurer if,
213 within 30 days after its receipt of the notice, the insurer
214 mails to the person filing the notice a written state~ent of
215 the insurer's agreement to pay for such treatment in
216 accordance with the notice and to pay a penalty of 10 percent,
217 subject to a maximum penalty of $250, when it pays for such
218 future treatment in accordance with the requirements of this
219 section. To the extent the insurer determines not to pay any
220 amount demanded, the penalty is not payable in any subsequent
221 action. For purposes of this subsection, payment or the
222 insurer's agreement shall be treated as being made on the date
223 a draft or other valid instrument that is equivalent to
224 payment, or the insurer's written statement of agreement, is
225 placed in the United States mail in a properly addressed,
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226 postpaid envelope, or if not so posted, on the date of
227 delivery. The insurer is not obligated to pay any attorney
228 fees if the insurer pays the claim or mails its agreement to
229 pay for future treatment within the time prescribed by this
230 subsection.
231 J..!l-fet The applicable statute of limitation for an
232 action under this section shall be tolled for 30 business days
233 by the mailing of a -8're-notice required by this subsection.
234 (g) No action shall be filed or prosecuted by or on
235 behalf of a claimant seeking benefits or related relief
236 against an insurer:
237 1. if a substantially compliant notice is not sent to an
238 insurer;
239 2. the insurer issued full payment to the claimant in
240 response to a notice within the time frame prescribed by
241 paragraph (e); or
242 3. asserting a claim of non-payment or underpayment of
243 benefits not identified in the notice.
244 Section 4. This act shall take effect July 1, 2020.
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COMMERCE COMMITTEE
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Insurance
AMENDMENT SUMMARY
February 27, 2020
Amendment 1 by Rep. Santiago (Line 127): The amendment revises the maximum allowable
medical charges for Personal Injury Protection insurance medical coverage related to
emergency services and care provided in a hospital, for both the hospital and a physician's or
dentist's care and services provided in the hospital, from 75 percent of usual and customary
charges to 200 percent of Medicare.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/CS/HB 895 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Santiago offered the following:
3
4 .Amendment (with title amendment)
5 Remove lines 127-130 and insert:
6 Section 3. Paragraph (a) of subsection (5) and subsection
7 (10) of section 627.736, Florida Statutes, are amended to read:
8 627.736 Required personal injury protection benefits;
9 exclusions; priority; claims.-
10 (5) CHARGES FOR TREATMENT OF INJURED PERSONS.-
11 (a) A physician, hospital, clinic, or other person or
12 institution lawfully rendering treatment to an injured person
13 for a bodily injury covered by personal injury protection
14 insurance may charge the insurer and injured party only a
15 reasonable amount pursuant to this section for the services and
16 supplies rendered, and the insurer providing such coverage may
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/CS/HB 895 (2020)
Amendment No. 1
17 pay for such charges directly to such person or institution
18 lawfully rendering such treatment if the insured receiving such
19 treatment or his or her guardian has countersigned the properly
20 completed invoice, bill, or claim form approved by the office
21 upon which such charges are to be paid for as having actually
22 been rendered, to the best knowledge of the insured or his or
23 her guardian. However, such a charge may not exceed the amount
24 the person or institution customarily charges for like services
25 or supplies. In determining whether a charge for a particular
26 service, treatment, or otherwise is reasonable, consideration
27 may be given to evidence of usual and customary charges and
28 payments accepted by the provider involved in the dispute,
29 reimbursement levels in the community and various federal and
30 state medical fee schedules applicable to motor vehicle and
31 other insurance coverages, and other information relevant to the
32 reasonableness of the reimbursement for the service, treatment,
33 or supply.
34 1. The insurer may limit reimbursement to 80 percent of
35 the following schedule of maximum charges:
36 a. For emergency transport and treatment by providers
37 licensed under chapter 401, 200 percent of Medicare.
38 b. For emergency services and care provided by a hospital
39 licensed under chapter 395, 200 percent of Medicare 75 percent
40 of the hospital's usual and custoffiary charges.
41 c. For emergency services and care as defined bys.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/CS/HB 895 (2020)
Amendment No. 1
42 395.002 provided in a facility licensed under chapter 395
43 rendered by a physician or dentist, and related hospital
44 inpatient services rendered by a physician or dentist, 200
45 percent of Medicare the usual and customary charges in the
46 community.
47 d. For hospital inpatient services, other than emergency
48 services and care, 200 percent of the Medicare Part A
49 prospective payment applicable to the specific hospital
50 providing the inpatient services.
51 e. For hospital outpatient services, other than emergency
52 services and care, 200 percent of the Medicare Part A Ambulatory
53 Payment Classification for the specific hospital providing the
54 outpatient services.
55 f. For all other medical services, supplies, and care, 200
56 percent of the allowable amount under:
57 (I) The participating physicians fee schedule of Medicare
58 Part B, except as provided in sub-sub-subparagraphs (II) and
59 (III) .
60 (II) Medicare Part B, in the case of services, supplies,
61 and care provided by ambulatory surgical centers and clinical
62 laboratories.
63 (III) The Durable Medical Equipment Prosthetics/Orthotics
64 and Supplies fee schedule of Medicare Part B, in the case of
65 durable medical equipment.
66
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/CS/HB 895 (2020)
Amendment No. 1
67 However, if such services, supplies, or care is not reimbursable
68 under Medicare Part B, as provided in this sub-subparagraph, the
69 insurer may limit reimbursement to 80 percent of the maximum
70 reimbursable allowance under workers' compensation, as
71 determined under s. 440.13 and rules adopted thereunder which
72 are in effect at the time such services, supplies, or care is
73 provided. Services, supplies, or care that is not reimbursable
74 under Medicare or workers' compensation is not required to be
75 reimbursed by the insurer.
76 2. For purposes of subparagraph 1., the applicable fee
77 schedule or payment limitation under Medicare is the fee
78 schedule or payment limitation in effect on March 1 of the
79 service year in which the services, supplies, or care is
80 rendered and for the area in which such services, supplies, or
81 care is rendered, and the applicable fee schedule or payment
82 limitation applies to services, supplies, or care rendered
83 during that service year, notwithstanding any subsequent change
84 made to the fee schedule or payment limitation, except that it
85 may not be less than the allowable amount under the applicable
86 schedule of Medicare Part B for 2007 for medical services,
87 supplies, and care subject to Medicare Part B. For purposes of
88 this subparagraph, the term ''service year" means the period from
89 March 1 through the end of February of the following year.
90 3. Subparagraph 1. does not allow the insurer to apply any
91 limitation on the number of treatments or other utilization
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for CS/CS/HB 895 (2020)
Amendment No. 1
92 limits that apply under Medicare or workers' compensation. An
93 insurer that applies the allowable payment limitations of
94 subparagraph 1. must reimburse a provider who lawfully provided
95 care or treatment under the scope of his or her license,
96 regardless of whether such provider is entitled to reimbursement
97 under Medicare due to restrictions or limitations on the types
98 or discipline of health care providers who may be reimbursed for
99 particular procedures or procedure codes. However, subparagraph
100 1. does not prohibit an insurer from using the Medicare coding
101 policies and payment methodologies of the federal Centers for
102 Medicare and Medicaid Services, including applicable modifiers,
103 to determine the appropriate amount of reimbursement for medical
104 services, supplies, or care if the coding policy or payment
105 methodology does not constitute a utilization limit.
106 4. If an insurer limits payment as authorized by
107 subparagraph 1., the person providing such services, supplies,
108 or care may not bill or attempt to collect from the insured any
109 amount in excess of such limits, except for amounts that are not
110 covered by the insured's personal injury protection coverage due
111 to the coinsurance amount or maximum policy limits.
112 5. An insurer may limit payment as authorized by this
113 paragraph only if the insurance policy includes a notice at the
114 time of issuance or renewal that the insurer may limit payment
115 pursuant to the schedule of charges specified in this paragraph.
116 A policy form approved by the office satisfies this requirement.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
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117 If a provider submits a charge for an amount less than the
118 amount allowed under subparagraph 1., the insurer may pay the
119 amount of the charge submitted.
120
121
122
123 T I T L E A ME N D ME N T
124 Remove line 24 and insert:
125 s. 627.736, F.S.; revising allowable maximum medical charges;
126 specifying information required as
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PCS for HB 1165
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: PCS for HB 1165 Beverage Law
SPONSOR(S): Commerce Committee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Commerce Committee Willson fl.W Hamon
SUMMARY ANALYSIS
In Florida, the Beverage Law regulates the manufacture, distribution, and sale of wine, beer, and liquor by
manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco in the Department of
Business and Professional Regulation (DBPR) administers and enforces the Beverage Law.
Relating to alcoholic beverage container sizes, the bill:
• Repeals s. 564.05, F.S., relating to wine container size limitations.
• Repeals s. 564.055, F.S., relating to cider container size limitations.
• Amends s. 564.09, F.S., to clarify when an unfinished bottle of wine may be taken home by a restaurant patron.
Relating to craft distilleries, the bill:
• Clarifies that a craft distiller may blend their product with other distilled spirits.
• Increases the maximum production threshold for craft distilleries from 75,000 to 250,000 gallons.
• Authorizes the issuance of up to 3 vendor's licenses for the sale of alcoholic beverages at a craft distillery's
licensed premises.
• Specifies that a craft distillery must have a vendor's license to ship its product to consumers located in Florida.
• Allows a craft distillery to sell, from its souvenir gift shop, up to 75,000 gallons of branded product per year. The
craft distillery may not be licensed as a vendor, and such sales must be made in either a face-to-face
transaction from the gift shop or as a shipment to a consumer located outside the state.
• Allows a craft distillery to be licensed as a distributor or exporter if the distillery is open to the public for tours,
tastings, and sales at least 30 hours per week.
• Specifies that any alcoholic beverages not manufactured on-site by the distillery must be obtained through a
licensed distributor, broker, agent or importer.
• Allows a craft distillery to receive a permit to conduct tastings and sales of its liquor products at fairs, trade
shows, exhibitions, and festivals, subject to certain conditions.
• Authorizes a craft distillery to conduct liquor tastings anywhere that liquor may be sold.
The bill amends the Tied House Evil Law allowing certain vendors and manufacturers to enter into brand-naming
rights agreements under certain conditions.
The bill authorizes certain beverage law licensees to allow dogs in certain areas under certain conditions.
The bill defines terms and establishes a framework for the return of malt beverage products that are damaged,
undamaged, or out of code, including the return of product for freshness reasons. These provisions are similar to
provisions in federal law and Division rules. The bill also prohibits consignment sales.
DBPR estimates there will be additional resources needed to implement the bill. The bill may have a positive fiscal
impact on state revenues and for certain entities involved in the production or sale of wine, cider and distilled spirits.
See Fiscal Analysis & Economic Impact Statement.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Beverage Law - Background
In Florida, the Beverage Law 1 regulates the manufacture, distribution, and sale of wine, beer, and liquor
by manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco
(Division) within the Department of Business and Professional Regulation (DBPR) administers and
enforces the Beverage Law. 2
"Alcoholic beverages" are defined ins. 561.01, F.S., as "distilled spirits and all beverages containing
one-half of 1 percent or more alcohol by volume." "Malt beverages" are brewed alcoholic beverages
containing malt. 3
Since the repeal of Prohibition, regulation of alcohol in the United States has traditionally been based
upon what is termed the "three-tier system." The system requires separation of the manufacture,
distribution, and sale of alcoholic beverages. The manufacturer creates the beverages, and the
distributor obtains the beverages from the manufacturer to deliver to the vendor. The vendor makes the
ultimate sale to the consumer. 4
Generally, only licensed vendors are permitted to sell alcoholic beverages directly to consumers at
retail, and manufacturers, distributors, and exporters5 are generally prohibited from holding a vendor's
license. 6 Manufacturers, distributors, and vendors are generally prohibited from being licensed or
having an interest in more than one tier. Limited exceptions, subject to certain conditions, include the
ability for a craft brewery to hold a vendor's license (tap room), a restaurant to hold a manufacturer's
license (brew pub), and a winery to hold up to three vendor's licenses. 7
Exceptions to the three-tier regulatory system allow certain in-state wineries, 8 craft breweries, 9 and craft
°
distilleries to sell directly to consumers. 1 Further, certain restaurants may be granted a vendor's
license to manufacture a limited quantity of malt beverages which can be sold to consumers for
consumption on premises. 11
Wineries may receive up to 3 vendor's licenses on property contiguous to the manufacturing premises
of the winery. 12 Section 599.004, F.S., establishes the Florida Farm Winery Program within the
Department of Agriculture and Consumer Services. The requirements for certification include that a
winery produce or sell less than 250,000 gallons of wine annually of which 60% is made from state
agricultural products, maintain a minimum of 5 acres of owned or managed land in Florida which
produces commodities used in the production of wine, be open to the public for tours, tastings, and
sales at least 30 hours each week, and pay an annual application and registration fee of $100.
1
Section 561.01(6), F.S., provides that the "The Beverage Law" means chs. 561, 562,563,564,565, 567, and 568, F.S.
2
S. 561.02, F.S.
3
S. 563.01, F.S.
4
S. 561.14, F.S.
5
S. 561.01(16), F.S. "Exporter" means any person that sells alcoholic beverages to persons for use outside the state.
6
S. 561.22(1), F.S.; s. 561.14(3), F.S. However, see the exceptions provided in ss. 561.221 and 565.03, F.S.
7
See ss. 561.22, F.S.; 561.24, F.S.; 561.14(1), F.S.; and 563.022(14), F.S.
8
Sees. 561.221(1), F.S.
9
Sees. 561.22 I (2), F.S.
10
Sees. 565.03, F.S.
11
Sees. 561.221(3), F.S.
12
Sees. 561. 221(1), F.S.
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Section 565.17, F.S., provides an exemption to the Tied-House Evil Laws, authorizing vendors and
liquor distributors to conduct liquor tastings at any location that is allowed to sell liquor by the package
or for consumption on premises. The tastings must be directed toward the of-age general public.
Section 561.24, F.S., prohibits the licensing of a manufacturer as a distributor or exporter. Wineries that
qualify as a certified Florida Farm Winery are the sole exception to this prohibition. Additionally, the
Division may issue permits for a certified Florida Farm Winery to conduct tasting and sales of its wines
at Florida fairs, trade shows, expositions, and festivals. The permit is limited to the length of the event.
The certified Florida Farm Winery is required to pay all entry fees and must have a winery
representative present during the event.
Vendors, but not manufacturers or distributors, are allowed to make deliveries away from their place of
business for sales actually made at their licensed place of business. Telephone, electronic, and mail
orders received at a vendor's licensed place of business are construed as a sale actually made at the
vendor's licensed place of business. Deliveries may be made in vehicles that are owned or leased by
the vendor, or in a third-party vehicle pursuant to a contract with a third party with whom the vendor has
contracted to make deliveries, including, but not limited to, common carriers. 13
A craft brewery which also holds a vendor's license is specifically prohibited from making deliveries
under this law. 14
Distilleries and Craft Distilleries - Current Situation
Section 565.01, F.S., defines the terms "liquor," "distilled spirits," "spirituous liquors," "spirituous
beverages," or "distilled spirituous liquors" to mean "that substance known as ethyl alcohol, ethanol, or
spirits of wine in any form, including all dilutions and mixtures thereof from whatever source or by
whatever process produced."
A "distillery" is a manufacturer of distilled spirits, and a "craft distillery" is a licensed distillery that
produces 75,000 or fewer gallons of distilled spirits per calendar year on its premises. A craft distillery
must notify the Division in writing of its decision to qualify as a craft distillery. 15
A distillery engaged solely in the business of manufacturing distilled spirits, or a person engaged in the
business of blending and rectifying distilled spirits must pay a state license tax of $4,000 for each plant
or branch operating in Florida. The license tax for a craft distillery is $1,000. Persons who engage in the
business of distilling spirits may also rectify and blend spirituous liquors without paying an additional
license tax. 16
According to the Division, 61 of the 64 licensed distilleries operating in Florida produce less than
75,000 gallons of distilled spirits. 17
A craft distillery is allowed to sell to consumers branded products, 18 distilled on the licensed premises,
in factory-sealed containers that are filled at the distillery and sold for off-premises consumption only.
The sales must occur at the distillery's souvenir gift shop located on private property contiguous to the
licensed distillery premises, and included on the sketch submitted with the license application. Sales
must be in face-to-face transactions with consumers who are making a purchase of no more than six
13
S. 561.57(1) & (2), F.S.
14
Ss. 561.221 (2)(d), and 565.57(1), F.S.
15
Ss. 565.03(l)(b) & (c), F.S.
16
S. 565.03(2)(b), F.S.
17
Department of Business and Professional Regulation, Agency Analysis of2020 HB 583, p. 5-6 (Dec. 6, 2019).
18
Section 565.03(l)(a), F.S., defines "branded product" to mean "any distilled spirits product manufactured on site, which requires a
federal certificate and label approval by the Federal Alcohol Administration Act or federal regulations."
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individual containers of each branded product. 19 The craft distillery is not required to obtain a vendor's
license to sell to consumers from their souvenir gift shop.
The Division must approve any subsequent revisions to a craft distillery's sketch to verify that the
souvenir gift shop location operated by the craft distillery is "owned or leased by the craft distillery and
on property contiguous to the craft distillery's production building." 20
Section 565.03, F.S., imposes the following requirements and prohibitions for craft distilleries:
• A craft distillery may not ship, arrange to ship, or deliver distilled spirits to consumers, but may
ship, arrange to ship, or deliver distilled spirits to manufacturers of distilled spirits, wholesale
distributors of distilled spirits, state or federal bonded warehouses, and exporters.
• A craft distillery may not transfer its license or any ownership interest to any individual or entity
with a direct or indirect interest in another distillery licensed in any other state, territory, or
country. However, a craft distillery may be affiliated with another distillery that produces 75,000
or fewer gallons per calendar year of distilled spirits on its premises or in any other state,
territory, or country.
• A craft distillery must report to the Division within 5 business days after it has reached the
75,000-gallon production limit and cease making sales to consumers on the day after it reaches
the production limit.
• A craft distillery must submit beverage excise taxes on distilled spirits sold to consumers in its
monthly report to the Division.
• Containers must comply with the container limits in s. 565.10, F .S., which prohibits the sale and
distribution of distilled spirits in any size container in excess of 1. 75 liters or 59.18 ounces.
Distilleries and Craft Distilleries - Effect of the Bill
The bill amends s. 561.221, F.S., to:
• Authorize the issuance of up to three vendor's licenses to a craft distillery for the sale of
alcoholic beverages on the distillery's licensed premises.
• Allow a craft distillery to conduct tastings and sales of their product at fairs, trade shows, expos,
and festivals.
The bill also amends s. 565.17, F.S., to allow craft distilleries to conduct liquor tastings at any licensed
premises authorized to sell liquor.
The bill amends s. 561.24, F.S., to allow a craft distillery to be licensed as a distributor or exporter if the
craft distillery is open to the public for tours, tastings, and sales at least 30 hours a week.
The bill amends s. 565.03, F.S., to:
• Clarify the definition of "branded product" to allow craft distillers to blend their product with
distilled spirits that are not manufactured on site.
• Increase the maximum production threshold for craft distilleries from 75,000 to 250,000 gallons.
• Allow a craft distillery to sell up to 75,000 gallons of branded product per year from its souvenir
gift shop and removes the limitations on the number of bottles per brand per consumer that may
be sold per year.
o For sales made from the craft distillery's souvenir gift shop, the craft distillery may not be
licensed as a vendor under s. 561.221, F.S., and such sales must be made in either a
face-to-face transaction from the gift shop or as a shipment to a consumer located
outside the state, subject to the laws of the receiving state.
• Specify that a craft distillery can transfer up to 75,000 gallons of its product from its federal
bonded space, nonbonded space, or storage areas to its souvenir gift shop, per year.
19
S. 565.03(l)(c), F.S.
20 Id.
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• Prohibit a craft distillery that does not have a vendor's license under s. 561.221, F.S., from
shipping its distilled spirits to consumers located in the state.
• Remove restrictions relating to the sale, transfer, or ownership affiliation for craft distilleries.
Wine and Cider Container Limitations - Current Situation
Section 564.05, F.S., prohibits the sale of wine in an individual container that holds more than one
gallon of wine, unless it is in a reusable container of 5.16 gallons, which may also be sold. Distributors
and manufacturers may sell wine to other distributors and manufacturers in containers of any size. Any
person who violates the prohibition ins. 564.05, F.S., commits a second degree misdemeanor. 21
Section 564.055, F.S., prohibits the sale of cider by vendors at retail in any individual container of more
than 32 ounces. However, cider may be packaged and sold in bulk, in kegs or barrels, or in any
individual container of one gallon or more, regardless of container type. The Beverage Law does not
provide for the sale of cider in growlers.
Wine and Cider Container Limitations - Effect of the Bill
The bill repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
The bill repeals s. 564.055, F.S., relating to the retail sale of individual cider containers.
Merlot to Go - Current Situation
Restaurants licensed to sell wine on the premises may permit patrons to remove one bottle of wine for
consumption off the licensed premises under the following conditions:
• The patron must have purchased a full-course meal consisting of a salad or vegetable, entree, a
beverage, and bread and consumed a portion of the bottle of wine with the meal;
• Before the partially-consumed bottle of wine is removed from the premises, the bottle must be
securely resealed by the licensee, or the licensee's employee, and placed in a bag or other
container that is secured in such a manner that it is visibly apparent if the container has been
opened or tampered with after having been sealed;
• A dated receipt for the wine and meal must be attached to the container; and
• The container must be placed in a locked glove compartment, trunk, or other area behind the
last upright seat of a motor vehicle that does not have a trunk. 22
Merlot to Go - Effect of the Bill
The bill amends s. 564.09, F.S., simplifying the requirement that a patron's meal be a "full course meal
consisting of salad or vegetable, entree, a beverage, and bread" to just "a meal."
Dogs in Bars and Restaurants - Current Situation
The Division of Hotels and Restaurants (Division) within DBPR is authorized to administer laws and
rules relating to the inspection and regulation of food service establishments for the purpose of
safeguarding the public health, safety and welfare, in accordance with ch. 509, F.S. 23 The law
21
Section 775.082, F.S., provides the penalty for a misdemeanor of the second degree is a term of imprisonment not exceeding 60
days. Section 775.083, F.S., provides the penalty for a misdemeanor of the second degree is a fine not to exceed $500.
22
S. 564.09, F.S.
23
The Florida Department of Health is responsible for regulations related to food service protection and environmental health. Current
regulations prohibit live animals inside food service establishments, vehicles used to transport food, and any other area or facility used
to conduct food service operations. R. 64E-l l.003(6)(c), F.A.C. An exception exists for service animals, as provided under s. 413.08,
F.S. See also ss. 381.006 and 381.0072, F.S.
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expressly limits the general home rule powers of a local government as it relates to the regulation of
such businesses. 24
Pursuant to its rulemaking authority, the Division has adopted the 2017 Food Code (Code) published
by the U.S. Food and Drug Administration (FDA). 25 The Code prohibits live animals on the premises of
food service establishments. 26 "Premises" is defined to mean the physical facility, its contents, and the
contiguous land or property under the control of the permit holder. 27 There are limited exceptions to this
prohibition including those for patrol dogs accompanying police or security officers, and service animals
controlled by persons with disabilities. 28
The service animal law authorizes an individual with a disability the right to be accompanied by a
trained service animal (a dog) in all areas of public accommodations that the public is normally allowed
to occupy. 29 A public accommodation is required to modify its policies, practices, and procedures to
permit use of a service animal by an individual with a disability.
The service animal law defines a "service animal" as an animal that is trained to do work or perform
tasks for an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other
mental disability. The work done or tasks performed must be directly related to the individual's
disability. A service animal is not a pet. It is also not a comfort animal.
Generally, only service animals are permitted to be inside bars and restaurants in Florida. However,
Florida law allows local governments to establish a local exemption to the prohibition on having live
animals inside food service establishments. Specifically, local governments may authorize local food
service establishments to decide whether to designate outdoor portions of the establishment for
"patrons' dogs." Participating establishments are required to apply for and receive a permit from the
governing body of the local government. Local governments are authorized to include additional
regulations and limitations to protect the health, safety and general welfare of the public. 30
The local ordinances must include the following requirements:
• All public food service establishment employees must wash their hands promptly after touching,
petting, or otherwise handling dogs. Employees shall be prohibited from touching, petting, or
otherwise handling dogs while serving food or beverages or handling tableware or before
entering other parts of the public food service establishment.
• Patrons in a designated outdoor area must be advised that they should wash their hands before
eating. Waterless hand sanitizer shall be provided at all tables in the designated outdoor area.
• Employees and patrons must be instructed that dogs are prohibited from contact with serving
dishes, utensils, tableware, linens, paper products, or any other items involved in food service
operations;
• Patrons must keep their dogs on a leash and under reasonable control at all times;
• Dogs are prohibited on chairs, tables, or other furnishings;
• All table and chair surfaces must be cleaned and sanitized with an approved product between
seating of patrons. Spilled food and drink must be removed from the floor or ground between
seating of patrons;
24
S. 509.032(7), F.S.
25
U.S. Department of Health and Human Services, Public Health Service, Food & Drug Administration, Food Code, (2017),
https://www.fda.gov/media/l l 0822/download (last visited Jan. 8, 2019). According to the FDA, "the purpose of maintaining an
updated model food code is to assist food control jurisdictions at all levels of government by providing them with a scientifically
sound technical and legal basis for regulating the retail segment of the food industry."
26
Id. at s. 6-50 l. l l 5(A).
27
Id. at s. 1-201.1 O(B).
28
Id. at s. 6-501.115(8).
29
S. 413.08(3), F.S.
30
S. 509.233, F.S.
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• Accidents involving dog waste must be cleaned immediately and the area sanitized with an
approved product. A kit with the appropriate materials for this purpose must be kept near the
designated outdoor area;
• A sign or signs reminding employees of the applicable rules must be posted on premises in a
manner and place as determined by the local permitting authority;
• A sign or signs reminding patrons of the applicable rules must be posted on premises in a
manner and place as determined by the local permitting authority; and
• A sign or signs must be posted in a manner and place as determined by the local permitting
authority that places the public on notice that the designated outdoor area is available for the
use of patrons and patrons' dogs. 31
Regarding where dogs are allowed to travel or pass through, the local ordinances must include the
following requirements:
• Dogs are prohibited from traveling through indoor portions of the public food service
establishment;
• Dogs are prohibited from traveling through nondesignated outdoor portions of the public food
service establishment; and
• Access to the designated outdoor portions of the public food service establishment must not
require entrance into or passage through any indoor area of the food establishment. 32
Dogs in Bars and Restaurants - Effect of the Bill
The bill creates s. 562.65, F.S., authorizing the owner of a certain premises licensed under the
Beverage Law to allow dogs in designated areas, including certain indoor areas, subject to the
following conditions:
• No more than 10% of gross revenues are derived from the sale of food that is consumed on the
licensed premises. For the purpose of the bill, ice is not considered food.
• Dogs must be kept on a leash and under control at all times.
• Dogs are not allowed on tables, bar tops, or other furnishings.
• Dogs are not allowed in any area where food is stored or prepared.
• Dog waste must be cleaned immediately and the area sanitized.
An individual may be held liable for failure to comply with the dog-related conditions if such failure
results in injury or damage. The bill also authorizes the Division to adopt rules to administer this law.
Tied House Evil - Current Situation
The three-tier system is deeply rooted in the perceived evils of the "tied house" in which a bar is owned
or operated by a manufacturer or the manufacturer exercises undue influence over the retail vendor. 33
Florida's "Tied House Evil Law," s. 561.42, F.S., prohibits a manufacturer or distributor of alcoholic
beverages from having a financial interest, directly or indirectly, in the establishment or business of a
licensed vendor, and prohibits a manufacturer or distributor from giving gifts, loans, property, or rebates
to retail vendors.
Florida's Tied House Evil Law prohibits a licensed manufacturer or distributor from:
• having any direct or indirect financial interest in any vendor;
• assisting any vendor using gifts, loans, money or property of any description (except for bottles,
barrels or other containers necessary for the transportation of beverages);
31
S. 509.233(3)(c), F.S.
32 Id.
33
See Andrew Tamayo, What's Brewing in the Old North State: An Analysis of the Beer Distribution Laws Regulating North
Carolina's Craft Breweries, 88 N.C. L. REV. 2198 (2010), http://scholarship.law.unc.edu/nclr/vol88/iss6/6.
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• giving any rebates of any kind whatsoever;
• engaging in cooperative advertising with a vendor;
• naming a vendor in any advertisement for a malt beverage tasting; and
• paying for particular placement, signage, or other brand promotion within a vendor premises for
malt beverages produced by the manufacturer. 34
However, the Tied House Evil Law authorizes a manufacturer or distributor of malt beverage to:
• Sell, at not less than cost, branded expendable retailer advertising specialties to a vendor
(trays, coasters, mats, menu cards, napkins, cups, glassware, thermometers, etc.).
• Lend without charge, rent, or sell durable retailer advertising specialties which bear
advertising matter to a vendor (clocks, pool table lights, etc.).
• Sell, at not less than cost, consumer advertising specialties to a vendor (ashtrays, T-shirts,
bottle openers, shopping bags, etc.). 35
Additionally, a distributor of malt beverages is allowed to:
• sell, at not less than cost, draft equipment and tapping accessories to a vendor;
• exchange, or provide without charge, any parts that are not compatible with a competitor's
system and are necessary to dispense the distributor's brands;
• provide, without charge, replacement parts of nominal intrinsic value (washers, gaskets, tail
pieces, hoses, hose connections, clamps, plungers, and tap markers, etc.); and
• provide, without charge, up to ten cases of glassware to a vendor licensed to sell malt
beverages for on-premises consumption, subject to certain conditions. 36
A vendor is prohibited from displaying any sign advertising any brand of alcoholic beverages outside of
or on the outside of their establishment, and a manufacturer or distributor may not directly or indirectly
give, lend, rent, sell or furnish a vendor with any outside sign. However, a vendor is allowed to display
signs and other advertising materials for brands that are sold by the vendor on the interior of their
licensed premises. 37
The Division is authorized to adopt rules and require reports in order to enforce the limitations
established under the Tied House Evil Law relating to credits, coupons, and other forms of
assistance. 38
Tied House Evil - Effect of the Bill
Sale or Purchase of Merchandise
The bill amends s. 561.42, F.S., to specify that a manufacturer, distributor, importer, primary American
source of supply, or brand owner or registrant, or any broker, sales agent, or sales person thereof, may
not "directly or indirectly" assist any vendor by "furnishing, supplying, selling, renting, lending, buying
for, or giving to any vendor any vehicles, equipment, furniture, fixtures, signs, supplies, credit, fees,
34
S. 561.42, F.S.
35
S. 561.42(14), F.S.
36
Id. Specifically, a distributor that receives glassware at no charge on a no-charge invoice from a malt beverage manufacturer or
importer may give such glassware to a vendor licensed to sell malt beverages for on-premises consumption. Each piece of glassware
given to a vendor by a distributor must bear a permanent brand name intended to prominently advertise the brand. A distributor may
not give a vendor more than l O cases of glassware per calendar year per licensed premises. A vendor that receives a gift of glassware
from a distributor may not sell the glassware or return it to a distributor for cash, credit, or replacement. A manufacturer or importer
who sells or gives glassware to a distributor, a distributor who sells or gives glassware to a vendor, and such vendor, must maintain
records of such sale or gift of glassware.
37
S. 561.42(10)-(12), F.S. However, only one neon, electric, or similar sign per manufacturer may be displayed in a window.
38
S. 561.42(8), F.S.
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slotting fees of any kind, advertising or cooperative advertising, or services" unless the manufacturer,
distributor, etc., "regularly sells merchandise to vendors" and the sale or purchase is:
• equal to or greater than the fair market value of the merchandise;
• not combined with any sale or purchase of alcoholic beverages;
• separately itemized from the sale or purchase of alcoholic beverages; and
• both the seller and purchaser maintain records.
The bill defines the term "merchandise" as commodities, supplies, fixtures, furniture, or equipment. The
term does not include alcoholic beverages or a motor vehicle or trailer requiring registration under ch.
320, F.S.
Written Agreements for Brand-Naming Rights and Associated Cooperative Advertising
The bill provides that, notwithstanding any other provision of the Tied House Evil Law, a manufacturer
or importer of malt beverages and a vendor may enter into a written agreement for brand-naming rights
and associated cooperative advertising if:
• The agreement is negotiated at arm's length for no more than fair market value;
• The vendor operates places of business where consumption on the premises is permitted,
which premises are located within a theme park complex comprised of at least 25 contiguous
acres owned and controlled by the same business entity and which contains permanent
exhibitions and a variety of recreational activities and has a minimum of 1 million visitors
annually through a controlled entrance to and exit;
• The agreement does not involve the sale or distribution of malt beverages;
• The vendor does not give preferential treatment to the alcoholic beverage brand(s) of the
manufacturer or importer;
• The agreement does not limit, directly or indirectly, the sale of alcoholic beverages of another
manufacturer, importer or distributor; and
• Within 10 days after execution of the agreement, the vendor files with the division a description
of the written agreement for brand naming rights which includes the location, dates, and the
name of the manufacturer or importer that entered into the agreement.
The bill prohibits a manufacturer or importer from soliciting or receiving, and prohibits a distributor from
paying, any portion of the brand-naming rights or cooperative advertising agreement. The bill also
specifies that such an agreement may not in any way obligate or place responsibility, financial or
otherwise, on a distributor.
The bill defines "negotiated at arm's length" as the negotiation of a business transaction by
independent parties acting in each party's own individual self-interest and conducted as if the parties
were strangers, so that no conflict of interest may arise.
The bill provides that a manufacturer, importer or vendor that violates the written agreement for brand-
naming rights and associated cooperative advertising provisions is subject to:
• First violation: A civil penalty up to $25,000 or the financial value of the brand-naming rights
agreement, whichever is greater.
• Second violation: A civil penalty up to $100,000 or the financial value of the brand-naming rights
agreement, whichever is greater.
• At the discretion of the division, in lieu of or in addition to the second civil penalty, suspension or
revocation of the alcoholic beverage license for a third or subsequent violation occurring within
36 months after the date of the first violation.
The bill provides that a violation occurring more than 36 months after a first violation is deemed a first
violation.
Return of Malt Beverages - Current Situation
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Florida's 'Tied House Evil Law," s. 561.42, F.S., prohibits a manufacturer or distributor of alcoholic
beverages from having a financial interest, directly or indirectly, in the establishment or business of a
licensed vendor, and prohibits a manufacturer or distributor from giving gifts, loans, property, or rebates
to retail vendors. Additionally, s. 563.022(4), F.S., prohibits unfair methods of competition and unfair or
deceptive practices in the conduct of the manufacturing, importing, distribution, sale, wholesaling, and
franchising of beer.
Product Returns - Federal Law
Federal regulations prohibit the sale or purchase of any alcoholic beverage products on consignment,
under conditional sale, with privilege of return, on any basis other than a bona fide sale, or if the sale
involves an agreement to acquire other products. 39 However, transactions involving the bona fide return
of products for "ordinary and usual commercial reasons arising after the merchandise has been sold"
are not prohibited. 40 Under federal regulations, ordinary and usual commercial reasons include:
• Defective product,
• Shipment error,
• A change in law preventing the sale of the product,
• Termination of the buyer's business,
• Change in product from that in inventory,
• Product in inventory is discontinued, or
• Possible spoilage of product during the offseason of a seasonal retail dealer. 41
Such returns are optional. The distributor is not required to accept the return. 42 Returns or exchanges of
products that are merely overstocked, slow-moving, or seasonal in nature are not considered ordinary
and usual commercial reasons. 43
Freshness Dating
Some brewers assign a coded "pull date" or "freshness date" to their product as a quality control tool to
prevent stale or outdated product from remaining in the marketplace. 44 Federal regulations allow for the
return (exchange, refund or credit) of malt beverages for freshness reasons under the following
circumstances:
• The brewer has policies and procedures in place that specify the date the retailer must pull the
product.
• The policies and procedures are readily verifiable and consistently followed by the brewer.
• The container has identifying markings that correspond with this date.
• The malt beverage product pulled by the distributor or retailer may not re-enter the retail
marketplace.
• If the product is returned for exchange, it must be for an identical quantity of the same brand. 45
Federal regulation prohibits the use of freshness provisions as "mere subterfuge to violate these same
consignment sales and/or tied house provisions."46
39
27 U.S.C. § 205(d).
40 Id.
41
27 C.F.R.§§ 11.32-11.39.
42
Alcohol and Tobacco Tax and Trade Bureau (TTB) Ruling, 2017-2 Revised - Freshness Dating and Allowable Returns of Malt
Beverage Products under the FAA Act (Sept. 29, 2017). In the case of malt beverages, trade practice provisions of the Federal Alcohol
Administration Act (FAA Act) apply only if the laws of the state into which the malt beverage products are sold or shipped impose
similar requirements.
43
Id.; 27 C.F.R. § 11.45 & 11.46.
44 fd
45 Id.
46 Id.
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Product Returns - Division Rules
The Beverage Law does not explicitly regulate the return of malt beverage products to distributors by
vendors. However, the Division has adopted rules to provide guidance to the industry.
Return of Damaged Products
Rule 61A-1.0107, F.A.C., regulates the return of damaged products. Products are considered damaged
if they, through no fault of the vendor or customer, exhibit product deterioration, leaking containers,
damaged labels, or missing or mutilated tamper-evident closures. Damaged products can be returned
for exchange, cash, or a credit when the vendor makes the request within 15 days of delivery.
Distributors are required to keep detailed transaction records of such returns. 47
If the vendor does not make the return request within 15 days of delivery, damaged product may not be
returned unless:
• The product is part of a manufacturer recall that affects multiple unaffiliated vendors; or
• Through no fault of the vendor, the product has deteriorated due to manufacturing or packaging
problems.
Return of Undamaged Products
Rule 61A-1.0108, F.A.C., regulates the return of undamaged products. A vendor may receive cash or
credit for the return of undamaged product if the request is made within 10 days of delivery. Distributors
are required to keep detailed transaction records of such returns.
If the vendor does not make the request within 10 days of delivery, undamaged product may not be
returned unless:
• The product may no longer be lawfully sold.
• The vendor goes out of business.
• There is a change in product, such as a change in formula, proof, label, or container.
• The product is discontinued; or
• The vendor is only open for a portion of the year, and the remaining product will spoil in the off-
season.48
Additionally, distributors are prohibited from making consignment sales to vendors, and vendors may
not attempt to return or exchange overstocked or slow-moving product. 49
Violations and Penalties
Section 562.45(1 ), F.S., provides that the false entry of any record required under the Beverage Law or
violation of the excise tax provisions, when done intentionally, is a felony of the third degree,
punishable as provided in ss. 775.082, 775.083, or 775.084, F.S. For violations of the Beverage Law
where no penalty is provided, first-time offenses are guilty of a misdemeanor of the second degree and
a felony of the third degree for any subsequent offenses thereafter.
Section 561.29, F.S., authorizes the Division to issue civil penalties for violations of the Beverage Law
and rules issued thereto. Such penalties may not exceed $1,000 per transaction. The Division is also
authorized to suspend the license of a licensee that fails to pay a civil penalty.
47
Section 561.55(3)(a), F.S., requires a manufacturer, distributor, broker, agent, and importer licensed under the Beverage Law to
maintain and keep, for a period of three years at the licensed place of business, such records of alcoholic beverages received, sold, or
delivered within or without this state as may be required by the Division
48
R. 61A-1.0108(4), F.A.C.
49 Id.
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Return of Malt Beverages - Effect of the Bill
The bill creates s. 563.061, F.S., relating to the return of malt beverage products.
Consignment Sales Prohibited
The bill prohibits the sale of malt beverages on consignment or any other basis other than a "bona fide
sale." Once a sale is made, only "bona fide returns" are allowed for the "ordinary and usual commercial
reasons" authorized in the bill. The terms "bona fide sale" and "bona fide return" are not defined in the
bill. The bill also specifies that product may not be returned simply because it is overstocked, slow-
moving, or has limited or seasonal demand, such as holiday decanters or other specialized containers.
Product Returns
The bill outlines situations where a vendor is permitted to return product for an exchange, a credit, or a
refund. The bill does not condition the return of product for a credit or a refund, but product returned for
an exchange may only be exchanged for:
• the exact same quantity of product,
• of near or equal value,
• made by the same manufacturer, and
• in the same size container or keg.
Return of Undamaged Product
The bill defines "undamaged product" as malt beverage product that is not damaged or out of code.
Undamaged product may be returned for exchange or credit. The vendor must make their return
request within 7 days of delivery. However, there is no time frame for a distributor to accept the return
of undamaged product if:
• Due to a change in regulations, the vendor is no longer permitted to sell a particular brand or
product size. (For credit or refund. 50 )
• The vendor terminates operations. (For credit or refund.)
• The product is returned for "purposes of ensuring quality control or freshness" even if it is not
yet out of code. (For exchange only.)
• A manufacturer issues a recall affecting multiple vendors that are not: under common
ownership, members of the same pool buying group, or members of the same advertising
cooperative. (For exchange or credit.)
• Production or importation of the product is discontinued. (For credit or refund.)
• The vendor is only open for part of the year, and the inventory at closing would go bad before
the vendor reopens. (For credit or refund.)
When undamaged product is returned more than 7 days after delivery, documentation of the qualifying
exception must be kept with the transaction record maintained by the distributor.
Return of Damaged Product
The bill defines "damaged product" to mean a malt beverage product delivered to a vendor exhibiting
product deterioration, defective seals, leaking, damaged labels, or missing or mutilated tamper-evident
closures. The bill establishes the following guidelines for damaged product:
• Return requests must be made within 7 days of delivery.
• The distributor must verify that the product is damaged.
• Product that is damaged by the vendor or their customers may not be returned.
• Damaged product may be returned for exchange of product or credit.
50
Type of return allowed is indicated in parentheses.
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Return of Out-of-Code Product
The bill defines "out-of-code product" as malt beverages that have exceeded the manufacturer's code
date and, according to the manufacturer's policies, must be removed and replaced with fresh product
for purchase in the retail market.
The bill defines "manufacturer's code date" to mean a coded best-by date, expiration date, or other
designated date or dating system established by a manufacturer to signify freshness that is printed on
the malt beverage container or, in the case of a keg, marked on a cap, collar, tag, or label affixed
directly to the keg.
A distributor may accept out-of-code product if:
• The distributor verifies that the product is out-of-code.
• The manufacturer has established written guidelines relating to product removal.
• Such policies and procedures are readily available, verifiable, and consistently applied by the
manufacturer.
• The manufacturer's code date is printed or marked on the product container.
• The out-of-code product that is removed by the distributor does not reenter the retail market.
Out-of-code product may be returned for exchange only.
Distributor Requirements
The bill authorizes, but does not require, distributors to accept returns. When a distributor does accept
a return, the distributor is required to:
• Provide the exchange, credit, or refund to the vendor at the time the product is picked up.
• Pick up damaged or undamaged product within 14 days of a vendor's return request.
• The bill does not specify when a distributor must pick up product that is out-of-code.
The bill requires distributors to maintain detailed transaction records for returned product for 3 years
and provide a copy to the vendor.
Additional Provisions
The bill specifies that, for the purposes of the Tied-House Evil Law, authorized returns are not
considered gifts, loans, or any other form of prohibited financial aid or assistance. The bill authorizes
the Division to impose a fine of up to $1,000 for each violation. The bill authorizes the Division to adopt
rules to administer and enforce the provisions.
The bill provides an effective date of July 1, 2020.
B. SECTION DIRECTORY:
Section 1 Amends s. 561.221, F.S.; authorizing the division to issue vendor's licenses to certain
craft distilleries for the sale of alcoholic beverages on the distillery's licensed premises;
requiring certain information be included on sketches approved by the division; requiring
the division to issue permits to craft distilleries for conducting tastings and sales at
certain events; requiring craft distilleries to pay entry fees for such events and have a
representative of the distillery present at each event; requiring that certain alcoholic
beverages be obtained through a licensed distributor, a licensed broker or sales agent,
or a licensed importer.
Section 2 Amends s. 561.24, F.S., authorizing a craft distillery to be licensed as a distributor under
certain circumstances.
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Section 3 Amends s. 561.42, F.S., revising terms; creating exemptions and penalties relating to
the Tied House Evil Law.
Section 4 Creates s. 562.65, F.S.; providing definitions; authorizing certain licensed vendors of
alcoholic beverages to allow dogs in certain designated areas on licensed premises;
providing requirements; providing for liability; authorizing the Division of Alcoholic
Beverages and Tobacco of the Department of Business and Professional Regulation to
adopt rules.
Section 5 Creates s. 563.061, F.S.; providing definitions; prohibiting consignment sales of malt
beverages between a distributor and vendor; authorizing bona fide returns of malt
beverages under certain conditions; providing applicability; authorizing distributors to
accept returns of certain products under specified conditions; providing distributor
requirements for such returns; providing requirements for exchanges of product;
providing recordkeeping requirements; specifying that authorized returns are not gifts,
loans, or other prohibited forms of financial aid or assistance; providing penalties; and
providing for rulemaking.
Section 6 Repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
Section 7 Repeals s. 564.055, F.S., relating to limitations on the size of individual cider containers.
Section 8 Amends s. 564.09, F.S., revising provisions that authorize a restaurant to allow patrons
to remove partially consumed bottles of wine from a restaurant for off-premises
consumption.
Section 9 Amends s. 565.03, F.S.; redefining the terms "branded product" and "craft distillery";
revising the requirements for the sale of branded products by a licensed craft distillery to
consumers; deleting a provision that prohibits a craft distillery from selling more than six
individual containers of a branded product to a consumer; etc.
Section 10 Amends s. 565.17, F.S., authorizing a craft distillery to conduct spirituous beverage
tastings on specified licensed premises under certain circumstances.
Section 11 Provides for an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill may result in an insignificant positive fiscal impact from revenue generated by craft
distilleries obtaining up to three vendor's licenses. The bill authorizes DBPR to impose and collect
fines, not to exceed $1,000, relating to the return of malt beverages.
The bill provides for an indeterminate positive fiscal impact through the creation of new civil
penalties as listed in the Tied House Evil section, above.
2. Expenditures:
To implement the bill, the Division estimates the need for two additional Tax Auditor positions for a
total of $143,875 in the first year and $131,925 recurring thereafter. 51
51
Department of Business and Professional Regulation, Agency Analysis of2020 HB 1165, p. 6 (Jan. 30, 2020).
STORAGE NAME: pcs1165.COM.DOCX PAGE: 14
DATE: 2/24/2020
However, currently there are 2 Tax Auditor positions within DBPR that are vacant over 300 days.
These positions could be transferred to the Division to address the requirements of the bill. 52
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive economic impact on certain entities in the wine and cider industry, due to
the reduction or elimination of regulatory constraints relating to container sizes.
The bill may have a positive economic impact for many craft distilleries, due to the removal of many
current regulatory constraints, resulting in enhanced brand recognition, increased sales volume,
opportunities for collaboration, and access to new markets and consumers.
Manufacturers and importers of malt beverages and qualified vendors will no longer be prohibited from
entering into agreements for brand naming rights under certain circumstances. This relaxation of the
Tied House Evil Law may allow certain licensees to benefit financially while negatively impacting other
licensees.
For some manufacturers and distributors, the bill may have a positive economic impact due to an
increase in consumer sales, stemming from the ability to move product between vendors for
"freshness" purposes. For other manufacturers and distributors, the bill may have a negative economic
impact to the extent that their brands become less attractive to vendors as compared to brands for
which there is a freshness policy. For vendors, the bill may have a positive economic impact for those
with difficult to sell inventory, and may have a negative impact to the extent that the narrowing of the
window for returns and the addition of a freshness policy affects a vendor's ability to return or sell
certain products
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill authorizes the Division of Alcoholic Beverages and Tobacco to adopt rules to administer the
provisions of the bill.
52
Department Vacancy Report, Jan. 30, 2020, on file with the Government Operations and Technology Appropriations Subcommittee.
STORAGE NAME: pcs1165.COM.D0CX PAGE: 15
DATE: 2/24/2020
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITIEE SUBSTITUTE CHANGES
STORAGE NAME: pcs1165.COM.DOCX PAGE: 16
DATE: 2/24/2020
F L O R D A H O U S E 0 F REPRESENTATIVES
PCS for HB 1165 2020
1 A bill to be entitled
2 An act relating the Beverage Law; amending s. 561.221,
3 F.S.; authorizing the division to issue vendor's
4 licenses to certain craft distilleries for the sale of
5 alcoholic beverages on the distillery's licensed
6 premises; requiring that the licensed vendor premises
7 be included on certain sketches and diagrams under
8 certain circumstances; requiring that all revisions to
9 sketches or diagrams be approved by the division;
10 requiring the division to issue permits to craft
11 distilleries for conducting tastings and sales at
12 certain events; requiring craft distilleries to pay
13 entry fees for such events and have a representative
14 of the distillery present at each event; requiring
15 that certain alcoholic beverages be obtained through a
16 licensed distributor, a licensed broker or sales
17 agent, or a licensed importer; amending s. 561.24,
18 F.S.; authorizing a craft distillery to be licensed as
19 a distributor under certain circumstances; amending s.
20 561.42, F.S.; prohibiting certain entities and persons
21 from directly or indirectly assisting or providing
22 specified items, monies, or services to a licensed
23 vendor; prohibiting a licensed vendor from accepting
24 specified items, monies, or services from certain
25 entities or persons; authorizing the Division of
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26 Alcoholic Beverages and Tobacco adopt rules and
27 require reports to enforce, and to impose
28 administrative sanctions for a violation of
29 limitations established under the Beverage Law on
30 specified items, monies, or services; prohibiting a
31 vendor from displaying certain signs in the window or
32 windows of his or her licensed premises; authorizing
33 certain entities and persons to furnish, supply, sell,
34 rent, lend, or give certain advertising material to
35 certain vendors; defining the term "decalcomania";
36 providing exemptions relating to tied house evil for
37 certain sales and purchases of merchandise; providing
38 conditions for the exemptions; defining the term
39 "merchandise"; prohibiting the sale of certain
40 advertising specialties at a price higher than the
41 actual cost to the industry member; authorizing a
42 manufacturer or importer of malt beverages and a
43 vendor to enter into a written agreement for certain
44 purposes; providing requirements for such agreement;
45 defining the term "negotiated at arm's length";
46 specifying that a brand-naming rights agreement does
47 not obligate or place responsibility upon a
48 distributor; providing civil penalties; prohibiting
49 the division from imposing certain civil penalties;
50 creating s. 562.65, F.S.; providing definitions;
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51 authorizing certain licensed vendors of alcoholic
52 beverages to allow dogs in certain designated areas on
53 licensed premises; providing requirements; providing
54 for liability; authorizing the Division of Alcoholic
55 Beverages and Tobacco of the Department of Business
56 and Professional Regulation to adopt rules; creating
57 s. 563.061, F.S.; providing definitions; prohibiting
58 consignment sales of malt beverages between a
59 distributor and vendor; authorizing bona fide returns
60 of malt beverages under certain conditions; providing
61 applicability; authorizing distributors to accept
62 returns of certain products under specified
63 conditions; providing distributor requirements for
64 such returns; providing requirements for exchanges of
65 product; providing recordkeeping requirements;
66 specifying that authorized returns are not gifts,
67 loans, or other prohibited forms of financial aid or
68 assistance; providing penalties; providing for
69 rulemaking; repealing ss. 564.05 and 564.055, F.S.,
70 relating to limitations on the size of individual wine
71 containers and individual cider containers; amending
72 s. 564.09, F.S.; revising provisions that authorize a
73 restaurant to allow patrons to remove partially
74 consumed bottles of wine from the restaurant for off-
75 premises consumption; amending s. 565.03, F.S.;
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76 redefining the terms "branded product" and "craft
77 distillery"; revising the requirements for the sale of
78 branded products by a licensed craft distillery to
79 consumers; deleting a provision that prohibits a craft
80 distillery from selling more than six individual
81 containers of a branded product to a consumer;
82 revising requirements relating to the shipping of
83 distilled spirits to consumers by a craft distillery;
84 deleting requirements relating to the transfer of
85 certain distillery licenses and ownership therein;
86 deleting a prohibition against certain affiliations;
87 authorizing a craft distillery to transfer specified
88 quantities of specified distilled spirits from certain
89 locations to its souvenir gift shop; requiring a craft
90 distillery making such transfers to submit certain
91 excise taxes with its monthly report to the Division
92 of Alcoholic Beverages and Tobacco of the Department
93 of Business and Professional Regulation; amending s.
94 565.17, F.S.; authorizing a craft distillery to
95 conduct spirituous beverage tastings on specified
96 licensed premises under certain circumstances;
97 providing an effective date.
98
99 Be It Enacted by the Legislature of the State of Florida:
100
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101 Section 1. Subsection (4) is added to section 561.221,
102 Florida Statutes, to read:
103 561.221 Licensing of manufacturers and distributors as
104 vendors and of vendors as manufacturers; conditions and
105 limitations.-
106 (4) (a) Notwithstanding s. 561.22, s. 561.42, or any other
107 provision of the Beverage Law, the division may issue up to
108 three vendor's licenses to a craft distillery licensed under s.
109 565.03, even if such distillery is also licensed as a
110 distributor, for the sale of alcoholic beverages on a craft
111 distillery's licensed premises.
112 (b) If a vendor's license is for the sale of alcoholic
113 beverages on a craft distillery's licensed premises, the
114 licensed vendor premises must be included on the sketch or
115 diagram defining the licensed premises submitted with the
116 distillery's license application. All sketch or diagram
117 revisions by the craft distillery must be approved by the
118 division and must verify that the vendor premises operated by
119 the licensed distillery is owned or leased by the craft
120 distillery and is located on the licensed distillery premises.
121 (c) The division shall, upon request, issue permits to a
122 craft distillery to conduct tastings and sales of distilled
123 spirits produced by the distillery at fairs, trade shows,
124 expositions, and festivals in this state. The craft distillery
125 shall pay all entry fees for such events and shall have a
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126 representative present during each event. A permit is limited to
127 the length of the event for which the permit is issued.
128 (d) Distilled spirits and other alcoholic beverages
129 manufactured by another licensed manufacturer, including any
130 distilled spirits that are owned in whole or in part by the
131 craft distillery but are distilled by another manufacturer, must
132 be obtained through a licensed distributor, a licensed broker or
133 sales agent, or a licensed importer.
134 Section 2. Subsection (9) is added to section 561.24,
135 Florida Statutes, to read:
136 561.24 Licensing manufacturers as distributors or
137 registered exporters prohibited; procedure for issuance and
138 renewal of distributors' licenses and exporters' registrations.-
139 (9) This section does not apply to a craft distillery, as
140 defined ins. 565.03, which is open to the public for tours,
141 tastings, and sales at least 30 hours each week.
142 Section 3. Subsections (13) and (14) of section 561.42,
143 Florida Statutes, are renumbered as subsections (14) and (15),
144 respectively, subsections ( 1) , ( 8) , ( 11) , and ( 12) and paragraph
145 (b) of present subsection (14) are amended, and new subsections
146 (13) and (16) are added to that section, to read:
147 561.42 Tied house evil; financial aid and assistance to
148 vendor by manufacturer, distributor, importer, primary American
149 source of supply, brand owner or registrant, or any broker,
150 sales agent, or sales person thereof, prohibited; procedure for
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151 enforcement; exception.-
152 (1) ~ N-e manufacturer, distributor, importer, primary
153 American source of supply, or brand owner or registrant of any
154 of the beverages herein referred to, whether licensed or
155 operating in this state or out-of-state, or fte-f any broker,
156 sales agent, or sales person thereof, may not shall have any
157 financial interest, directly or indirectly, in the establishment
158 or business of any vendor licensed under the Beverage Law; nor
159 may shall such manufacturer, distributor, importer, primary
160 American source of supply, brand owner or brand registrant, or
161 any broker, sales agent, or sales person thereof, directly or
162 indirectly, assist any vendor by furnishing, supplying, selling,
163 renting, lending, buying for, or giving to any vendor any
164 vehicles, equipment, furniture, fixtures, signs, supplies,
165 credit, fees, slotting fees of any kind, advertising or
166 cooperative advertising, services, arry gifts or loans of money
167 or property of any descriptionL or by the giving of any rebates
168 of any kind whatsoever. A N-e licensed vendor may not shall
169 accept, directly or indirectly, any vehicles, equipment,
170 furniture, fixtures, signs, supplies, credit, fees, slotting
171 fees of any kind, advertising or cooperative advertising,
172 services, gifts any gift or loans ±eaft of money or property of
173 any descriptionL or arry rebates of any kind whatsoever from any
174 such manufacturer, distributor, importer, primary American
175 source of supply, brand owner or brand registrant, or any
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176 broker, sales agent, or sales person thereof; provided, however,
177 that this does not apply to any bottles, barrels, or other
178 containers necessary for the legitimate transportation of such
179 beverages or to advertising materials and does not apply to the
180 extension of credit, for liquors sold, made strictly in
181 compliance with the provisions of this section. A brand owner is
182 a person who is not a manufacturer, distributor, importer,
183 primary American source of supply, brand registrant, or broker,
184 sales agent, or sales person thereof, but who directly or
185 indirectly owns or controls any brand, brand name, or label of
18 6 alcoholic beverage. Hothing in This section does not shall
187 prohibit the ownership by vendors of any brand, brand name, or
188 label of alcoholic beverage.
189 (8) The division may adopt rules and require reports to
190 enforce, and may impose administrative sanctions for any
191 violation of, the limitations established under the Beverage Law
192 on any vehicles, equipment, furniture, fixtures, signs,
193 supplies, credit, fees, slotting fees of any kind, advertising
194 or cooperative advertising, services, gifts or loans of money or
195 property of any description, rebates of any kind whatsoever 4-ft
196 this section on credits, coupons, and other forms of assistance.
197 (11) A vendor may display in the interior of his or her
198 licensed premises, including the window or windows thereof,
199 neon, electric, or other signs that require a power source;T
200 including window painting and decalcomanias applied to the
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201 surface of the interior or exterior of such windowsL7 and
202 posters, placards, and other advertising material advertising
203 the brand or brands of alcoholic beverages sold by him or her,
204 whether visible or not from the outside of the licensed
205 premises. However, a, but no vendor may not shall display in the
206 window or windows of his or her licensed premises more than one
207 neon, electric, or similar sign that requires a power source 7
208 advertising the product of any one brand of alcoholic beverage
209 manufacturer.
210 (12) Any manufacturer, distributor, importer, primary
211 American source of supply, or brand owner or registrant, or any
212 broker, sales agent, or sales person thereof, may give, lend,
213 furnish, or sell to a vendor who sells the products of such
214 manufacturer, distributor, importer, primary American source of
215 supply, or brand owner or registrant any of the following: neonL
216 er electric, or other signs requiring a power source; oigno,
217 window painting and decalcomanias applied to the surface of the
218 interior or exterior of windows; and7 posters, placards, and
219 other advertising material herein authorized to be used or
220 displayed by the vendor in the interior of his or her licensed
221 premises. As used in this section, the term "decalcomania'' means
222 a picture, design, print, engraving, or label made to be
223 transferred onto a glass surface.
224 (13) Any manufacturer, distributor, importer, primary
225 American source of supply, or brand owner or registrant, or any
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226 broker, sales agent, or sales person thereof, who regularly
227 sells merchandise to vendors, or any vendor who purchases
228 merchandise from such manufacturer, distributor, importer,
229 primary American source of supply, or brand owner or registrant,
230 or any broker, sales agent, or sales person thereof, does not
231 violate subsection (1) if:
232 (a) Such sale or purchase is equal to or greater than the
233 fair market value of the merchandise; not combined with any sale
234 or purchase of alcoholic beverages; separately itemized from the
235 sale or purchase of alcoholic beverages; and
236 (b) Both the seller and purchaser maintain records of any
237 such sale or purchase, including the price and any conditions
238 associated with such sale or purchase of the merchandise.
239
240 For purposes of this subsection, the term "merchandise" means
241 commodities, supplies, fixtures, furniture, or equipment. The
242 term does not include alcoholic beverages or a motor vehicle or
243 trailer requiring registration under chapter 320.
244 ~-f-±-4+ The division shall adopt reasonable rules
245 governing promotional displays and advertising. Such rules may
246 not conflict with or be more stringent than the federal
247 regulations pertaining to such promotional displays and
248 advertising furnished to vendors by distributors, manufacturers,
249 importers, primary American sources of supply, or brand owners
250 or registrants, or any broker, sales agentL or sales person
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251 thereof; however:
252 (b) Without limitation in total dollar value of such items
253 provided to a vendor, a manufacturer, distributor, importer,
254 primary American source of supply, or brand owner 7 or brand
255 registrant of malt beverage, or any broker, sales agentL or
256 sales person thereof, may rent, loan without charge for an
257 indefinite duration, or sell durable retailer advertising
258 specialties such as clocks, pool table lights, and the like,
259 which bear advertising matter. If sold, such items may not be
260 sold at a price less than the actual cost to the industry member
261 who initially purchased the items.
262 (16) (a) Notwithstanding other provisions of this section,
263 a manufacturer or importer of malt beverages and a vendor may
2 64 enter into a written agreement for brand-naming rights and
265 associated cooperative advertising, negotiated at arm's length,
266 for no more than fair market value if all of the following
267 conditions are met:
268 1. The vendor operates places of business where
269 consumption on the premises is permitted and the premises:
270 a. Are located within a theme park complex consisting of
271 at least 25 contiguous acres owned and controlled by the same
272 business entity;
273 b. Contain permanent exhibitions and a variety of
274 recreational activities; and
275 c. Has a minimum of 1 million visitors annually with a
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276 controlled entrance to, and exit from, the enclosed area.
277 2. Such agreement does not involve, either in whole or in
278 part, the sale or distribution of malt beverages between the
279 manufacturer or importer, or the manufacturer's or importer's
280 distributor, and a vendor.
281 3. The vendor, as a result of such agreement, does not
282 give preferential treatment to the alcoholic beverage brand or
283 brands of the manufacturer or importer with whom the vendor has
284 entered into such agreement.
285 4. Such agreement does not directly or indirectly limit
286 the sale of alcoholic beverages of another manufacturer or
287 importer, or distributor.
288 5. Within 10 days after execution of such agreement, the
289 vendor files with the division a description of the agreement
290 which includes the location, dates, and the name of the
291 manufacturer or importer that entered into the agreement.
292
293 As used in this paragraph, the term "negotiated at arm's length"
294 means the negotiation of a business transaction by independent
295 parties acting in each party's own individual self-interest and
296 conducted as if the parties were strangers, so that no conflict
297 of interest may arise.
298 (b) A manufacturer or importer of malt beverages who is a
299 party to a brand-naming rights agreement may not, directly or
300 indirectly, solicit or receive from any of its distributors any
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301 portion of the payment due from the manufacturer or importer of
302 malt beverages to the vendor pursuant to such agreement. Such
303 agreement exists solely between the manufacturer and the vendor
304 and does not, directly or indirectly, in any way obligate or
305 place responsibility, financial or otherwise, upon a
306 distributor.
307 (c) Notwithstanding s. 561.29(3) and (4), a manufacturer
308 of malt beverages, an importer of malt beverages, or a vendor
309 who violates this subsection is subject to:
310 1. A civil penalty of not more than $25,000, for a first
311 violation.
312 2. A civil penalty of not more than $100,000 for a second
313 violation occurring within 36 months after the date of the first
314 violation.
315 3. At the discretion of the division, in lieu of or in
316 addition to the penalty imposed under subparagraph 2.,
317 suspension or revocation of the alcoholic beverage license for a
318 third or subsequent violation occurring within 36 months after
319 the date of the first violation.
320
321 A violation occurring more than 36 months after a first
322 violation is deemed a first violation under this paragraph. When
323 imposing a civil penalty within the ranges provided in
324 subparagraphs 1. and 2., the division may not impose a civil
325 penalty in an amount greater than the financial value of the
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326 brand-naming rights agreement.
327 Section 4. Section 562.65, Florida Statutes, is created to
328 read:
329 562.65 Licensed premises of vendors; dogs allowed in
330 designated areas.-
331 (1) As used in this section, the term:
332 (a) "Division" means the Division of Alcoholic Beverages
333 and Tobacco of the Department of Business and Professional
334 Regulation.
335 (b) "Dog" means a dog that is domesticated and kept as a
336 household pet.
337 ( c) "Licensed premises" has the same meaning as provided
338 ins. 561.01(11).
339 (d) "Vendor" means a person who is licensed under the
340 Beverage Law.
341 (2) A vendor may allow dogs in designated areas, including
342 certain indoor areas, of the licensed premises under the
343 following conditions:
344 (a) No more than 10 percent of the gross revenue of the
345 vendor's business may be from the sale of food consumed on the
346 licensed premises. Ice may not be considered food.
347 (b) Dogs must be kept on a leash and under control at all
348 times.
349 (c) Dogs may not be permitted on tables, bar tops, or
350 other furnishings.
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351 (d) Dogs may not be permitted in any area of the licensed
352 premises in which food is stored or prepared.
353 (e) Dog waste must be cleaned immediately and the area
354 must be sanitized.
355 (3) An individual may be held liable for failure to comply
356 with the conditions under paragraphs (2) (b)-(e) if such failure
357 causes injury or damage.
358 (4) The division may adopt rules to administer this
359 section.
360 Section 5. Section 563.061, Florida Statutes, is created
361 to read:
362 563.061 Return of malt beverage products.-
363 (1) DEFINITIONS.-As used in this section, the term:
364 (a) "Damaged product" means a malt beverage product
365 delivered to a vendor exhibiting product deterioration,
366 defective seals, leaking, damaged labels, or missing or
367 mutilated tamper-evident closures.
368 (b) "Keg" means a reusable container used to store and
369 dispense a malt beverage product in draft form on tap.
370 (c) "Manufacturer's code date" means a coded best-by date,
371 expiration date, or other designated date or dating system
372 established by a manufacturer to signify freshness that is
373 printed on the malt beverage container or, in the case of a keg,
374 marked on a cap, collar, tag, or label affixed directly to the
375 ~
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376 (d) "Out-of-code product" means a malt beverage product
377 that has exceeded the manufacturer's code date and, according to
378 the manufacturer's policies, must be removed and replaced with
379 fresh product for purchase in the retail market.
380 (e) "Undamaged product" means a malt beverage product that
381 is not damaged or out of code.
382 (2) CONSIGNMENT SALES PROHIBITED; AUTHORIZED RETURNS.-A
383 distributor may not sell, offer for sale, or contract to sell
384 malt beverages on consignment or any basis other than a bona
385 fide sale. A vendor may not purchase, offer to purchase, or
386 contract to purchase malt beverages on consignment or any basis
387 other than a bona fide sale. Once a distributor sells malt
388 beverages to a vendor, only bona fide returns are permitted for
389 the ordinary and usual commercial reasons authorized in this
390 section. This section does not permit return of product because
391 it is overstocked or slow-moving or because it has limited or
392 seasonal demand, including, but not limited to, product packaged
393 in holiday decanters or distinctive bottles.
394 (3) RETURNS OF UNDAMAGED PRODUCT.-
395 (a) Except as provided in paragraph (b), undamaged product
396 may be returned for exchange of product or credit.
397 (b) A distributor may only accept a return of undamaged
398 product if the return is requested within 7 days after the
399 delivery date. However, a distributor may accept a return of
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400 undamaged product after such time in the following
401 circumstances:
402 1. If a vendor or its employees or agents are no longer
403 permitted, due to a change in regulation or administrative
404 procedure, to sell a particular brand or size product, such
405 product may be returned for credit or refund.
406 2. If a vendor terminates operations, the vendor's
407 inventory of product at the time of termination may be returned
408 for credit or refund. This subparagraph does not apply during a
409 vendor's temporary seasonal shutdown.
410 3. Except as provided in subparagraph 6., a product that
411 has not yet exceeded the manufacturer's code date may be
412 returned for purposes of ensuring quality control or freshness;
413 however, such product may only be returned for exchange of
414 product.
415 4. If a manufacturer has issued a product recall that
416 affects multiple vendors that are not affiliated through having
417 common ownership, being members of the same pool buying group,
418 or being members of the same advertising cooperative, the
419 recalled product may be returned for exchange of product or
420 credit. If return of such product is requested more than 7 days
421 after the delivery date, the distributor must keep documentation
422 of the recall with the transaction record maintained pursuant to
423 subsection (8).
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424 5. If production or importation of a product is
425 discontinued, a vendor's inventory of the discontinued product
426 may be returned for credit or refund.
427 6. If a vendor is only open for a portion of the year and
428 has product remaining at closure which, with respect to quality
429 control or freshness, would become unsuitable for sale during
430 the off-season according to the manufacturer's code date, such
431 product may be returned for credit or refund.
432
433 If undamaged product is returned under this paragraph, the
434 distributor must keep documentation of a qualifying exception in
435 subparagraphs 1.-6. with the transaction record maintained
436 pursuant to subsection (8).
437 (4) RETURNS OF DAMAGED PRODUCT.-
438 (a) Damaged product may only be returned for exchange of
439 product or credit. A distributor must verify damaged product
440 before accepting its return.
441 (b) Product damaged by a vendor, its employees or agents,
442 or its customers may not be returned and shall be the vendor's
443 liability.
444 (c) A distributor may only accept return of damaged
445 product if requested within 7 days after the delivery date.
446 (5) RETURNS OF OUT-OF-CODE PRODUCT.-
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447 (a) Out-of-code product may only be returned for exchange
448 of product. A distributor must verify out-of-code product before
449 accepting its return.
450 (b) A distributor may accept return of out-of-code product
451 any time after the manufacturer's code date only in the
452 following circumstances:
453 1. The manufacturer has written policies and procedures
454 that specify the date that out-of-code product should be
455 removed.
456 2. Such policies and procedures are readily available,
457 verifiable, and consistently applied by the manufacturer.
458 3. The manufacturer's code date is printed on the product
459 container or, in the case of a keg, marked on a cap, collar,
4 60 tag, or label affixed directly to the keg.
4 61 4. Out-of-code product removed by the distributor does not
462 reenter the retail market.
463 (6) EXCHANGES OF PRODUCT.-An exchange of product
4 64 authorized under this section must be in exact quantities with a
465 product of near or equal value, made by the same manufacturer,
466 and in the same size container or keg unless a credit is issued
4 67 at the time of the return.
4 68 ( 7) DISTRIBUTOR REQUIREMENTS FOR RETURNS.-This section
469 does not require a distributor to accept returns authorized
470 under this section; however, if a distributor accepts return of
471 product, the distributor must:
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472 (a) Provide the exchange of product, credit, or refund to
473 the vendor, as provided in subsections (3)-(5), at the same time
474 the distributor picks up the product being returned.
475 (b) For damaged or undamaged product, pick up the product
476 being returned within 14 days after receipt of the vendor's
477 request.
478 (8) TRANSACTION RECORDS.-A distributor must keep and
479 maintain for 3 years a transaction record of each return
480 identifying the vendor's business name, address, and license
481 number; product returned for exchange of product, credit, or
482 refund; and any other documentation required by this section.
483 The distributor must provide a copy of the transaction record to
484 the vendor in a format accessible and readable by the vendor.
485 Such transaction records must be maintained on the distributor's
486 licensed premises, or may be kept at another location in this
487 state if the distributor notifies the division in writing before
488 keeping records in another location, and must be made available
489 to the division upon request for inspection in a format
490 accessible and readable by the division. The distributor must
491 notify the division in writing of any change in recordkeeping
4 92 location.
493 (9) RETURNS NOT TIED HOUSE EVIL.-Bona fide returns
494 authorized under this section for exchange of product, credit,
495 or refund are not considered gifts, loans, or other forms of
496 financial aid or assistance prohibited bys. 561.42.
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4 97 (10) CIVIL PENALTY.-In accordance withs. 561.29, the
498 division may impose a civil penalty against a distributor or
499 vendor for any violation of this section, or any rule adopted
500 under this section, not to exceed $1,000 per violation.
501 (11) RULEMAKING AUTHORITY.-The division may adopt rules to
502 administer and enforce this section.
503 Section 6. Section 564.05, Florida Statutes, is repealed.
504 Section 7. Section 564.055, Florida Statutes, is repealed.
505 Section 8. Section 564.09, Florida Statutes, is amended to
506 read:
507 564.09 Restaurants; off-premises consumption of wine.-
508 Notwithstanding any other provision of law, a restaurant
509 licensed to sell wine on the premises may permit a patron to
510 remove one unsealed bottle of wine for consumption off the
511 premises if the patron has purchased a full course meal
512 consisting of a salad or vegetable, entree, a beverage, and
513 bread and consumed a portion of the bottle of wine with such
514 mea-1- on the restaurant premises. A partially consumed bottle of
515 wine that is to be removed from the premises must be securely
516 resealed by the licensee or its employees before removal from
517 the premises. The partially consumed bottle of wine shall be
518 placed in a bag or other container that is secured in such a
519 manner that it is visibly apparent if the container has been
520 subsequently opened or tampered with, and a dated receipt for
521 the bottle of wine and full course meal shall be provided by the
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522 licensee and attached to the container. If transported in a
523 motor vehicle, the container with the resealed bottle of wine
524 must be placed in a locked glove compartment, a locked trunk, or
525 the area behind the last upright seat of a motor vehicle that is
526 not equipped with a trunk.
527 Section 9. Paragraphs (a) and (b) of subsection (1),
528 paragraphs (b) and (c) of subsection (2), and subsection (5) of
529 section 565.03, Florida Statutes, are amended to read:
530 565.03 License fees; manufacturers, distributors, brokers,
531 sales agents, and importers of alcoholic beverages; vendor
532 licenses and fees; distilleries and craft distilleries.-
533 (1) As used in this section, the term:
534 (a) "Branded product" means any distilled spirits product
535 manufactured on site, or manufactured on site and blended on
536 site with other distilled spirits, which requires a federal
537 certificate and label approval by the Federal Alcohol
538 Administration Act or federal regulations.
539 (b) "Craft distillery" means a licensed distillery that
540 produces 250,000 75,000 or fewer gallons per calendar year of
541 distilled spirits on its premises and is designated as a craft
542 distillery by has notified the division upon notification in
543 writing of its decision to qualify as a craft distillery.
544 (2)
545 (b) A licensed distillery or craft distillery may Persons
546 licensed under this section who are in the business of
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547 distilling spirituous liquors may aloe engage in the business of
548 rectifying and blending spirituous liquors without the payment
549 of an additional license tax.
550 (c) A craft distillery licensed under this section which
551 is not licensed as a vendor under s. 561.221 may sell to
552 consumers under its craft distillery license, at its souvenir
553 gift shop, up to 75,000 gallons per calendar year of branded
554 products distilled on its premises in this state in factory-
555 sealed containers that are filled at the distillery for off-
556 premises consumption by consumers. Such sales are authorized
557 only on private property owned or leased by the craft distillery
558 which is contiguous to the craft distillery's licensed
559 distillery premises approved by the division in this state and
560 included on the sketch or diagram defining the licensed premises
561 submitted with the distillery's license application. All olcetch
562 or diagram revisions by the distillery shall require the
563 division's approval verifying that the souvenir gift shop
564 location operated by the licensed distillery io owned or leased
565 by the distillery and on property contiguous to the distillery's
566 production building in this state.
567 1. A craft distillery may not sell under its craft
568 distillery license any factory-sealed individual containers of
569 spirits to consumers in this state except in face-to-face sales
570 transactions with such consumers at the craft distillery's
571 licensed premises. Such containers must be in compliance with
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572 the container limits ins. 565.10 who are Htaking a purchase of
573 no Htore than si}{ individual containers of each branded product.
574 2. Each container sold in face to face transactions with
575 consuHters Htust coHtply with the container liHtits ins. 565.10,
576 per calendar year for the consuHter's personal use and not for
577 resale and who are present at the distillery's licensed preHtises
578 in this state.
579 2.-3--;- A craft distillery must report to the division within
580 5 days after it reaches the production limitations provided in
581 paragraph (1) (b). Any retail sales to consumers under its craft
582 distillery license at the craft distillery's licensed preHtises
583 are prohibited beginning the day after it reaches the production
584 limitation.
585 3.~ A craft distillery that has not been issued a
586 vendor's license under s. 561.221 may not ship or arrange to
587 ship any of its distilled spirits to consumers in this state and
588 may sell and deliver only to consumers within the state in a
589 face-to-face transaction at the distillery property. However, a
590 craft distillery distiller licensed under this section may ship,
591 arrange to ship, or deliver such spirits to manufacturers of
592 distilled spirits, wholesale distributors of distilled spirits,
593 state or federal bonded warehouses, -a-rre exporters, or consumers
594 located outside of this state; however, all such shipments must
595 comply with the laws where such products are scheduled to be
596 delivered for personal use.
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597 4. A craft distillery may transfer up to 75,000 gallons
598 per calendar year of distilled spirits that it manufactures from
599 its federal bonded space, nonbonded space at its licensed
600 premises, or storage areas to its souvenir gift shop.
601 5. Except as provided in subparagraph 6., it is unlawful
602 to transfer a distillery license for a distillery that produces
603 75,000 or fewer gallons per calendar year of distilled spirits
604 on its premises or any ownership interest in such license to an
605 individual or entity that has a direct or indirect ownership
606 interest in any distillery licensed in this state; another
607 state, territory, or country; or by the United States government
608 to manufacture, blend, or rectify distilled spirits for beverage
609 purposes.
610 6. A craft distillery shall not have its ownership
611 affiliated with another distillery, unless such distillery
612 produces 75,000 or fewer gallons per calendar year of distilled
613 spirits on each of its premises in this state or in another
614 state, territory, or country.
615 (5) A craft distillery may transfer distilled spirits to
616 any of its retail areas pursuant to paragraph (2) (c) ors.
617 561. 221 and making sales under paragraph ( 2) ( c) is responsible
618 for submitting any excise taxes due to the state on distilled
619 spirits on beverages under the Beverage Law with -i-ft its monthly
620 report to the di vision with any tm{ payments due to the state.
621 Section 10. Section 565.17, Florida Statutes, is amended
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622 to read:
623 565.17 Beverage tastings by distributors, craft
624 distilleries, and vendors.-A licensed distributor of spirituous
625 beverages, a craft distillery, as defined ins. 565.03, or any
626 vendor, is authorized to conduct spirituous beverage tastings
627 upon any licensed premises authorized to sell spirituous
628 beverages by package or for consumption on premises without
629 being in violation of s. 561.42, provided that the conduct of
630 the spirituous beverage tasting shall be limited to and directed
631 toward the general public of the age of legal consumption.
632 Section 11. This act shall take effect July 1, 2020.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 1265 Verification of Employment Eligibility
SPONSOR(S): Commerce Committee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Commerce Committee Willson f1W' Hamon
SUMMARY ANALYSIS
Both Florida and federal law prohibit employers from hiring a person who is not authorized to work in the
United States. Federal law requires most employers to verify the eligibility of new hires using certain employee-
provided documents. Additionally, federal law requires some employers to use E-Verify, an Internet-based
system designed to allow employers to electronically confirm the employment eligibility of newly hired
employees in the United States. In Florida, state agencies that are under the direction of the Governor must
use E-Verify for all newly hired employees, and must require contractors and subcontractors to use E-Verify for
all new hires for the duration of a contract.
The bill provides that, beginning January 1, 2021, public employers, contractors, and subcontractors must
register with and use the E-Verify system to verify the work authorization status of all newly hired employees. A
public employer, contractor, or subcontractor may not enter into a contract unless each party to the contract
registers with and uses the E-Verify system.
The bill provides that, beginning January 1, 2021, a private employer must verify the employment eligibility of a
person who has accepted an offer of employment or a contract employee upon the renewal or extension of his
or her contract. A private employer must verify a person's employment eligibility by either using the E-Verify
system or requiring the person to provide the same documentation that is required by the United States
Citizenship and Immigration Services on its Employment Eligibility Verification form (Form 1-9).
The bill provides that if a private employer does not verify the employment eligibility of a current or future
employee, the Department of Economic Opportunity (DEO) must require the private employer to provide DEO
with an affidavit stating that:
• the private employer will comply with the employee verification requirements described above,
• the private employer has terminated the employment of all unauthorized aliens in this state, and
• the employer will not intentionally or knowingly employ an unauthorized alien in this state.
If a private employer does not provide the required affidavit within 30 days, the bill requires DEO to order the
appropriate agency to suspend all applicable licenses held by the private employer until the private employer
provides DEO with the required affidavit. If a private employer violates the verification of employment eligibility
requirements three times within a 36 month period, the bill requires permanent revocation of all licenses held
by the private employer specific to the business location where the unauthorized alien performed work.
The bill appears to an indeterminate, insignificant fiscal impact on state or local government.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Overview
Both federal and Florida law prohibit a person from employing a person who is not authorized to work in
the United States. Additionally, federal law requires some employers to use E-Verify and requires most
employers to verify the eligibility of new hires using certain employee-provided documents. Moreover,
by executive order of Governor Scott, state agencies under the direction of the Governor, as well as
their contractors and subcontractors, must use E-Verify.
E-Verify is a free, Internet-based system through which an employer can verify that a newly hired
employee is authorized to work in the United States. 1 E-Verify electronically compares the information
from an employee's Form 1-9 with records available to the Social Security Administration (SSA) and the
U.S. Department of Homeland Security (DHS) to verify the identity and employment eligibility of newly
hired employees. 2
Florida Law
A person may not knowingly employ, hire, recruit, or refer an alien for private or public employment
within the state if the alien is not authorized to work under "the immigration laws" or by the United
States Attorney General. 3 A first offense of this prohibition is a noncriminal violation punishable by a
fine of up to $500; each subsequent offense is a second degree misdemeanor, 4 punishable by up to 60
days in jail 5 and a fine not to exceed $500. 6
Moreover, by Executive Order 11-116, state agencies that are under the direction of the Governor must
use E-Verify for all newly hired employees. The order also requires an agency to include in a contract a
provision requiring a contractor to use E-Verify for all new hires for the duration of the contract. These
same requirements must be included in the contractor's contracts with subcontractors. 7
Federal Law
The federal Immigration Reform and Control Act of 1986 (IRCA) 8 made it illegal for any U.S. employer
to knowingly:
• Hire, recruit, or refer for a fee an alien knowing he or she is unauthorized to work;
• Continue to employ an alien knowing he or she has become unauthorized; or
• Hire, recruit or refer for a fee, any person (citizen or alien) without following the record keeping
requirements of the Act. 9
1 U.S. Citizenship and Immigration Services, How do I use E-Verify? https://www.e-
verify.gov/sites/defau1Ufiles/everify/guides/E4en.pdf (last visited Feb. 22, 2020).
2 OHS and USCIS, E-Verify User Manual, https://www.e-verify.gov/e-verify-user-manual-10-introduction/11-background-
and-overview (last visited Feb. 22, 2020).
3 S. 448.09(1), F.S.
4 S. 448.09(2), F.S.
5 S. 775.082(4)(b), F.S.
6 S. 775.083(1)(e}, F.S.
7
Exec. Order No. 11-116 (May 2011 }, available at http://edocs.dlis.state.fl.us/fldocs/governor/orders/2011/11-116-
suspend.pdf (last visited Feb. 22, 2020).
8 Public Law 99-603, 100 Stat. 3359.
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The IRCA established a procedure that employers must follow to verify that employees are authorized
to work in the United States. 10 The procedure requires employees to present documents that establish
both the worker's identity and eligibility to work, and requires employers to complete a Form 1-9 for each
new employee hired. 11 The IRCA provides sanctions to be imposed on employers who knowingly
employ aliens who are not authorized to work. 12 Federal law contains no criminal sanction for working
without authorization, although document fraud is a civil violation. 13 The United States Citizenship and
Immigration Services (USCIS) enforces these provisions. 14
In 1996, Congress passed the Illegal Immigration Reform and Immigrant Responsibility Act (IIRIRA), 15
which, among other things, created various employment eligibility verification programs, including the
Basic Pilot program. Originally, the Basic Pilot program (now referred to as E-Verify) was available in
five of the seven states that had the highest populations of unauthorized aliens and was initially
authorized for only 4 years. However, Congress has consistently extended the program's life. It
expanded the program in 2003, making it available in all 50 states. In 2008, the federal government
began requiring any entity that maintained or applied for federal contracts to use E-Verify. 16
Using E-Verify
The Process, in Context
E-Verify is the last step in a larger eligibility-verification process. This process begins when an
employee accepts an offer of employment. 17 Between this point and the employee's first day on the job,
he or she must complete Section 1 of the Form 1-9, which requires providing his or her name, address,
Social Security Number, and citizenship status under penalty of perjury. 18 By the end of the third day on
the job, the employer is required to complete Section 2, stating under penalty of perjury that he or she
has reviewed certain employee-provided documents that establish the employee's eligibility. 19 This is
where the required verification of employment eligibility stops for most employers.
Before using E-Verify for the first time, an employer must enroll via the DHS's website. 20 At the end of
the enrollment process, the employer must sign a Memorandum of Understanding that provides the
terms of agreement between the employer and DHS. 21
Once enrolled, an employer uses E-Verify by opening a "case" for an employee and entering basic
information from the employee's Form 1-9 (name, address, SSN) into the case. 22 Then E-Verify
9 8 U.S.C. § 1324a.
10 Id.
11 Id.
12 Id. at 1324a(a)(1 )-(2).
13 Id. at 1324c.
14 Id. at 1324a.
15 Public Law 104-208.
16 Department of Homeland Security and USCIS, History and Milestones [of E-Verify),
http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=84979589cdb76210V
gnVCM 1OOOOOb92ca60aRCRD&vgnextchannel=84979589cdb7621 OVgnVCM 1OOOOOb92ca60aRCRD (last visited Feb.
22, 2020).
17 United States Citizenship and Immigration Services, Complete and Co"ect Form 1-9, https://www.uscis.gov/i-9-
central/complete-and-correct-form-i-9, (last visited Feb. 22, 2020).
1a See 8 C.F.R. § 274a.2(b)(1)(i)(A).
19 See aC.F.R. § 274a.2(b)(1)(ii).
20 Department of Homeland Security and USCIS, The Enrollment Process, https://www.e-verify.gov/employers/enrolling-
in-e-verify/the-enrollment-process (last visited Feb. 22, 2020).
21 The E-Verify Memorandum for Employers, available at https://www.e-
verify.gov/sites/default/files/everify/memos/MOUforEVerifyEmployer.pdf (last visited Feb. 22, 2020).
22 Department of Homeland Security and USCIS, ABOUT E-Verify, https://www.e-verify.gov/about-e-verify (last visited
Feb. 22, 2020).
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compares that information to records available to the U.S. Department of Homeland Security and the
Social Security Administration, and usually within seconds, issues one of several possible results to the
employer. 23 A result of "Employment Authorized" indicates that the employee may work in the United
States. Other results include:
• Verification In Process - This case was referred to DHS for further verification.
• Tentative Nonconfirmation (TNC) - Information did not match records available to SSA or DHS.
Additional action is required.
• Case in Continuance - The employee has visited an SSA field office or contacted DHS, but
more time is needed to determine a final case result.
• Close Case and Resubmit - SSA or DHS requires that the employer close the case and create a
new case for this employee. This result may be issued when the employee's U.S. passport,
passport card, or driver's license information is incorrect.
• Final Nonconfirmation - E-Verify cannot confirm the employee's employment eligibility after the
employee visited SSA or contacted DHS. 24
If the result is TNC, the employer must notify the employee, who must take further action to verify his or
her eligibility. 25 If the result is Verification in Process or Case in Continuance, the E-Verify system
needs more time to process the case. 26 Lastly, a result of "Final Nonconfirmation" indicates that there is
no further action to be taken by any party and that E-Verify will not confirm that the employee is
authorized to work in the United States. 27
Results in FY2019
In FY 2019, E-Verify processed 38,930,405 cases, 98.51% of which were automatically confirmed as
"work authorized" and another 0.23% were confirmed after an initial "mismatch." 28
For the remaining 1.27% of cases, the employees were not found to be authorized to work in the United
States. 29 The vast majority of this 1.27% (0.97%) were cases that were not resolved by the end of FY
2019 for various reasons, including because the case was awaiting further action by either the
employer or employee at the end of the fiscal year or because the employer closed the case as "self-
terminated."30
Accuracy
The most recent independent report of E-Verify's accuracy appears to have been done 2012 by the firm
Westat. 31 The report relied on data from 2009 and before. 32
Westat found that E-Verify was 94% accurate in its final disposition of cases-E-Verify confirmed 94%
of employees who were in fact authorized to work in the United States; 94% of the Final
Nonconfirmations (FNCs) issued were for people who were in fact not authorized to work in the United
23 Id.
24 Department of Homeland Security and USCIS, Verification Process, https://www.e-verify.gov/employers/verification-
process (last visited Feb. 22, 2020).
25 Id.
26 Id.
21 Id.
28 Department of Homeland Security and USCIS, E-Verify Performance, https://www.e-verify.gov/about-e-verify/e-verify-
data/e-verify-performance (last visited Feb. 22, 2020).
29 Id.
30 Id.
31 Westat, Evaluation of the Accuracy of E-Verify Findings, (July, 2012) available at https://www.e-
verify.gov/sites/defau lt/fi les/everify/data/Fi nd ings EVerifyAccuracyEval2012. pdf.
32 Id.
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States. As such, according to Westat, 6% of people who were in fact authorized to work in the United
States received a FNC from E-Verify. 33
User Satisfaction
According to the Department of Homeland Security's most recent customer service report, which was
published in 2018 regarding users' experiences in 2017, employers rated their experience of "using E-
Verify" at "90," based on subcategories such as "ease of use" and "speed of response." 34 These same
users rated their overall satisfaction with E-Verify at "85." 35
In 2017, 13 percent of employers contacted E-Verify by phone for customer service. 36 These employers
rated their experience at "89." 37 And 96 percent of those who contacted customer service reported
having their issue resolved, usually on the first call (89 percent). 38
Mandatory Use of E-Verify in Other States
At least 19 other states require the use of E-Verify by public employers, contractors or subcontractors
of public employers, or private employers.
The following states require private employers, as well as public employers and their contractors and
subcontractors, to use E-Verify:
• North Carolina 39
40
• Mississippi41
• Georgia42
• Arizona 43
• Alabama
• Utah44
• South Carolina45
The following states require only public employers and their contractors to use E-Verify:
• lndiana46
• Nebraska47
• Missouri48
33 Id.
34 U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services, Annual Customer Satisfaction
Survey 2017, (Mar. 2018), https://www.e-
verify.gov/sites/defaulUfiles/everify/data/EVerifyCustomerSatisfactionSurvey2017.pdf (last visited Feb. 22, 2020).
35 Id. This rating is in line with prior years' ratings, which have fluctuated between 85 and 87 since 2011.
36 Id.
37 Id.
38 Id.
39 N.C.G.S. § 160A-169.1 (municipalities); 153A-99.1 (counties); 143-48.5, 143-133.3 (public contractors); 64-26 (private
employers that have more than 25 employees); 126-7.1 (state agencies).
40 Miss. Code§ 71-11-3.
41 Ga. Code§ 13-10-91 (public employers and contractors); 36-60-6 (private employers that have more than 10
employees).
42 Ariz. Rev. Stat.§ 41-4401 (public contractors); 23-214 (private and public employers).
43 Ala. Code§ 31-13-15.
44 Utah Code§ 63G-12-301 (private employers having 15 or more employees, unless the employee has a guest worker
permit), 63G-12-302 (public employers and contractors). Under both statutes, the employers may use E-Verify or another
federal verification program.
45 S.C. Code§ 41-8-20 (private employers); 8-14-20 (public employers and contractors).
46 Ind. Code§ 22-5-1.7-11.1.
41 Nev. Rev. St. § 4-114.
48 Miss. Stat. § 285.530.
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• Colorado49
• Oklahoma 50
• Texas51
• Virginia 52
Some states' approaches do not fall squarely into the above categories. For example, Tennessee
requires only private employers that have 50 or more employees to use E-Verify. 53 Pennsylvania
requires public contractors and private construction employers to use E-Verify. 54 In Michigan, only
contractors of the Michigan Department of Transportation must use E-Verify. 55 Finally, West Virginia
requires contractors whose employees work on the Capitol grounds to use E-Verify. 56
Effect of the Bill
Definitions
The bill defines the following terms:
• "Agency" means an agency, a department, a board, or a commission of this state or a county or
municipality which issues a license to operate a business in this state.
• "Department" means the Department of Economic Opportunity.
• "Contractor'' means a person or entity that has entered or is attempting to enter into a contract
with a public employer to provide labor, supplies, or services to such employer in exchange for
salary, wages, or other remuneration.
• "Employee" means a person filling an authorized and established position who performs labor
or services for a public or private employer in exchange for salary, wages, or other
remuneration.
• "E-Verify system" means an Internet-based system operated by the United States Department
of Homeland Security that allows participating employers to electronically verify the employment
eligibility of newly hired employees.
• "Legal alien" means a person who is or was lawfully present or permanently residing legally in
the United States and allowed to work at the time of employment and remains so throughout the
duration of that employment.
• "License" means a franchise, a permit, a certificate, an approval, a registration, a charter, or any
similar form of authorization required by state law and issued by an agency for the purpose of
operating a business in this state. The term includes, but is not limited to:
o An article of incorporation.
o A certificate of partnership, a partnership registration, or an article of organization.
o A grant of authority issued pursuant to state or federal law.
o A transaction privilege tax license.
49 Colo. Rev. Stat.§ 8-17.5-102.
50 25 Oki. St. § 1313 (public employers and contractors must use E-Verify or another federal verification program).
51 Tex. Nat. Res. Code§ 81.072 (public contractors); Tex. Gov. Code§ 673.002 (state agencies)
52 Va. Code § 40.1-11.2 (state agencies), 2.2-4308.2 (public contractors).
53 Tenn. Code§ 50-1-703.
54 43 Penn. Stat. § 167.3 (public contractors); 43 Penn. Stat. §168.3 (private construction employers).
55 Act 200, Public Acts of 2012, Sec. 381.
56 W. Va. Code, § 15-2D-3.
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• "Private employer'' means a person or entity that transacts business in this state, that has a
license issued by an agency in this state, and that employs persons to perform labor or services
in exchange for salary, wages, or other remuneration. The term does not include:
o A public employer;
o The occupant or owner of a private residence who hires:
• Casual labor, as defined in s. 443.036, F.S., to be performed entirely within the
private residence; or
• A licensed independent contractor, as defined in federal laws or regulations, to
perform a specified portion of labor or services; or
o An employee leasing company licensed under part XI of ch. 468, F.S., that enters into a
written agreement or understanding with a client company which places the primary
obligation for compliance with this section upon the client company. In the absence of a
written agreement or understanding, the employee leasing company is responsible for
compliance with this section. Such employee leasing company shall, at all times, remain
an employer as otherwise defined in federal laws or regulations.
• "Public employer" means an agency within state, regional, county, local, or municipal
government, whether executive, judicial, or legislative, or any public school, community college,
or state university that employs persons who perform labor or services for that employer in
exchange for salary, wages, or other remuneration or that enters or attempts to enter into a
contract with a contractor.
• "Subcontractor" means a person or entity that provides labor, supplies, or services to or for a
contractor or another subcontractor in exchange for salary, wages, or other remuneration.
• "Unauthorized alien" means a person who is not authorized under federal law to be employed in
the United States, as described in 8 U.S.C. § 1324a(h)(3). The term shall be interpreted
consistently with that section and any applicable federal rules or regulations.
Public Employers, Contractors, and Subcontractors
The bill provides that, beginning January 1, 2021, public employers, contractors, and subcontractors
must register with and use the E-Verify system to verify the work authorization status of all newly hired
employees. The bill specifies that a public employer, contractor, or subcontractor may not enter into a
contract unless each party to the contract registers with and uses the E-Verify system.
Additional requirements include:
• Subcontractors must provide contractors with an affidavit stating that the subcontractor does not
employ, contract with, or subcontract with an unauthorized alien, and the contractor must
maintain a copy of the affidavit for the duration of the contract.
The bill provides that a public employer, contractor, or subcontractor who has a good faith belief that a
person or entity with which it is contracting has knowingly employed, hired, recruited or referred an
unauthorized alien must terminate the contract with the person or entity. Furthermore, if a public
employer has a good faith belief that a subcontractor has knowingly violated relevant portions of the
bill, but the contractor has otherwise complied, the public employer must promptly notify the contractor
and order the contractor to immediately terminate the contract with the subcontractor. The bill specifies
that a termination of a contract for either of these reasons may not be considered a breach of contract.
Actions to challenge such terminations must be filed no later than 20 calendar days after the
termination date. If a public employer terminates a contract with a contractor, the contractor may not be
awarded a public contract for at least one year after the date on which the contract was terminated, and
the contractor is liable for any additional costs incurred by the public employer as a result of the
contract termination.
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Private Employers
The bill provides that, beginning January 1, 2021, a private employer must verify the employment
eligibility of a person who has accepted an offer of employment or a contract employee upon the
renewal or extension of his or her contract. The bill specifies that private employers are not required to
verify the employment eligibility of employees hired before January 1, 2021.
A private employer must verify a person's employment eligibility by:
• Using the E-Verify system; or
• Requiring the person to provide the same documentation that is required by the United States
Citizenship and Immigration Services on its Employment Eligibility Verification form (Form 1-9).
The private employer must retain a copy of such documentation for at least 3 years after the person's
initial date of employment.
The bill provides that a private employer who complies with the requirements of the bill may not be held
civilly or criminally liable under state law for hiring, continuing to employ, or refusing to hire an
unauthorized alien if the proper protocol was followed to verify that the person's work authorization
status was not that of an unauthorized alien. The bill specifies that compliance with proper protocol
creates a rebuttable presumption that a private employer did not knowingly employ an unauthorized
alien.
The bill requires a private employer to provide copies of any document used to verify a person's
employment eligibility, upon request by:
• The Department of Law Enforcement.
• The Attorney General.
• The state attorney.
• The statewide prosecutor.
The bill specifies that the entities listed above must rely upon the federal government to verify a
person's employment eligibility, and may not independently make a final determination as to whether a
person is an unauthorized alien.
The bill provides that, if a private employer does not verify the employment eligibility of a current or
future employee in accordance with the requirements above, DEO must require the private employer to
provide DEO with an affidavit stating that:
• the private employer will comply with the employee verification requirements listed above,
• the private employer has terminated the employment of all unauthorized aliens in this state, and
• the employer will not intentionally or knowingly employ an unauthorized alien in this state.
If the private employer does not provide the required affidavit within 30 days, the bill requires DEO to
order the appropriate agency to suspend all applicable licenses held by the private employer until the
private employer provides DEO with the required affidavit. The bill specifies that the licenses subject to
suspension include all licenses held by the employer specific to the business location where the
unauthorized alien performed work. If the employer does not hold a license specific to the business
location where the unauthorized alien performed work, but a license is necessary to operate the
employer's business in general, the licenses that are subject to suspension are all licenses that are
held by the employer at the employer's primary place of business.
For any private employer found to have violated the requirements relating to the verification of
employment eligibility for current or future employees three times within any 36 month period, DEO
must order the appropriate agencies to permanently revoke all licenses that are held by the private
employer specific to the business location where the unauthorized alien performed work. If the private
employer does not hold a license specific to the business location where the unauthorized alien
performed work, but a license is necessary to operate the private employer's business in general, the
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DATE: 2/24/2020
bill directs DEO to order the appropriate agencies to permanently revoke all licenses that are held by
the private employer at the private employer's primary place of business.
The bill specifies that the requirements provided for in the bill be enforced without regard to race, color,
or national origin and shall be construed in a manner so as to be fully consistent with any applicable
federal laws or regulations.
Economic Development Incentives
The bill amends s. 288.061, F.S., relating to the economic development incentive application process.
Beginning July 1, 2020, the bill specifies that the executive director of DEO may not approve an
economic development incentive application unless the application includes that the applicant is
registered with and uses the E-Verify system to verify the work authorization status of all newly hired
employees. If DEO determines that an awardee is not complying with this requirement, DEO must
notify the awardee by certified mail of their determination of noncompliance and the awardee's right to
appeal the determination. On a final determination of noncompliance, the awardee must repay DEO all
monies received as an economic development incentive within thirty days of the final determination.
The bill provides for an effective date of July 1, 2020.
8. SECTION DIRECTORY:
Section 1 Amends s. 288.061, F.S., requiring that certain information be included in the economic
development incentive application process.
Section 2 Amends s. 448.095, F.S.; relating to the verification of employment eligibility by certain
employers.
Section 3 Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill requires DEO to enforce the suspension of the license of an employer that fails to verify a
person's employment eligibility. This enforcement may occur at the local government level and at
specific state agencies. This additional enforcement duty will likely result in additional costs to DEO.
8. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
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DATE: 2/24/2020
The bill could increase costs for employers that do not currently verify a person's employment eligibility.
Though the federal government does not charge a fee for the use of E-Verify, using E-Verify or
requiring an employer to verify an individual's employment eligibility by means of document review
could increase the labor involved in hiring an employee, especially if E-Verify is used and the initial
response for that employee is not "Employment Authorized."
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R D A H O U S E 0 F REPRESENTATIVES
PCS for HB 1265 2020
1 A bill to be entitled
2 An act relating to the verification of employment
3 eligibility; amending s. 288.061, F.S.; requiring that
4 certain information be included in the economic
5 development incentive application process; creating s.
6 448.095, F.S.; providing definitions; requiring public
7 employers, contractors, and subcontractors to register
8 with and use the E-Verify system; prohibiting such
9 entities from entering into a contract unless each
10 party to the contract registers with and uses the E-
11 Verify system; requiring a subcontractor to provide a
12 contractor with a certain affidavit; requiring a
13 contractor to maintain a copy of such affidavit;
14 authorizing the termination of a contract under
15 certain conditions; providing that such termination is
16 not a breach of contract; authorizing a challenge to
17 such termination; providing certain liability if a
18 contract is terminated; requiring private employers to
19 verify the employment eligibility of newly hired
20 employees beginning on a specified date; providing an
21 exception; providing acceptable methods for verifying
22 employment eligibility; requiring a private employer
23 to maintain certain documentation for a specified
24 time; providing specified immunity and nonliability
25 for private employers; creating a rebuttable
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26 presumption for private employers; requiring private
27 employers to provide copies of certain employment
28 documents, upon request, to specified persons or
29 entities for certain purposes; providing for the
30 suspension or revocation of certain licenses under
31 certain circumstances; providing construction;
32 providing an effective date.
33
34 Be It Enacted by the Legislature of the State of Florida:
35
36 Section 1. Subsection (7) is added to section 288.061,
37 Florida Statutes, to read:
38 288.061 Economic development incentive application
39 process.-
40 (7) Beginning July 1, 2020, the executive director may not
41 approve an economic development incentive application unless the
42 application includes proof to the department that the applicant
43 is registered with and uses the E-Verify system, as defined in
44 s. 448.095, to verify the work authorization status of all newly
45 hired employees. If the department determines that the awardee
46 is not complying with this subsection, the department must
47 notify the awardee by certified mail of the department's
48 determination of noncompliance and the awardee's right to appeal
49 the determination. On a final determination of noncompliance,
50 the awardee must repay all monies received as an economic
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51 development incentive to the department within thirty days of
52 the final determination.
53 Section 2. Section 448.095, Florida Statutes, is created
54 to read:
55 448.095 Employment eligibility.-
56 (1) DEFINITIONS.-As used in this section, the term:
57 (a) "Agency" means an agency, a department, a board, or a
58 commission of this state or a county or municipality which
59 issues a license to operate a business in this state.
60 (b) "Contractor" means a person or entity that has entered
61 or is attempting to enter into a contract with a public employer
62 to provide labor, supplies, or services to such employer in
63 exchange for salary, wages, or other remuneration.
64 ( c) "Department" means the Department of Economic
65 Opportunity.
66 (d) "Employee" means a person filling an authorized and
67 established position who performs labor or services for a public
68 or private employer in exchange for salary, wages, or other
69 remuneration.
70 (e) "E-Verify system" means an Internet-based system
71 operated by the United States Department of Homeland Security
72 that allows participating employers to electronically verify the
73 employment eligibility of newly hired employees.
74 ( f) "Legal alien" means a person who is or was lawfully
75 present or permanently residing legally in the United States and
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76 allowed to work at the time of employment and remains so
77 throughout the duration of that employment.
78 (g) "License" means a franchise, a permit, a certificate,
79 an approval, a registration, a charter, or any similar form of
80 authorization required by state law and issued by an agency for
81 the purpose of operating a business in this state. The term
82 includes, but is not limited to:
83 1. An article of incorporation.
84 2. A certificate of partnership, a partnership
85 registration, or an article of organization.
86 3. A grant of authority issued pursuant to state or
87 federal law.
88 4. A transaction privilege tax license.
89 (h) "Private employer" means a person or entity that
90 transacts business in this state, that has a license issued by
91 an agency in this state, and that employs persons to perform
92 labor or services in exchange for salary, wages, or other
93 remuneration. The term does not include:
94 1. A public employer;
95 2. The occupant or owner of a private residence who hires:
96 a. Casual labor, as defined ins. 443.036, to be performed
97 entirely within the private residence; or
98 b. A licensed independent contractor, as defined in
99 federal laws or regulations, to perform a specified portion of
100 labor or services; or
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101 3. An employee leasing company licensed under part XI of
102 chapter 468 that enters into a written agreement or
103 understanding with a client company which places the primary
104 obligation for compliance with this section upon the client
105 company. In the absence of a written agreement or understanding,
106 the employee leasing company is responsible for compliance with
107 this section. Such employee leasing company shall, at all times,
108 remain an employer as otherwise defined in federal laws or
109 regulations.
110 (i) "Public employer" means an entity within state,
111 regional, county, local, or municipal government, whether
112 executive, judicial, or legislative, or any public school,
113 community college, or state university that employs persons who
114 perform labor or services for that employer in exchange for
115 salary, wages, or other remuneration or that enters or attempts
116 to enter into a contract with a contractor.
117 (j ) "Subcontractor" means a person or entity that provides
118 labor, supplies, or services to or for a contractor or another
119 subcontractor in exchange for salary, wages, or other
120 remuneration.
121 (k) "Unauthorized alien" means a person who is not
122 authorized under federal law to be employed in the United
123 States, as described in 8 U.S.C. s. 1324a(h) (3). The term shall
124 be interpreted consistently with that section and any applicable
125 federal rules or regulations.
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126 (2) PUBLIC EMPLOYERS, CONTRACTORS, AND SUBCONTRACTORS.-
127 (a) Beginning January 1, 2021, every public employer,
128 contractor, and subcontractor shall register with and use the E-
129 Verify system to verify the work authorization status of all
130 newly hired employees. A public employer, contractor, or
131 subcontractor may not enter into a contract unless each party to
132 the contract registers with and uses the E-Verify system.
133 (b) 1. If a contractor enters into a contract with a
134 subcontractor, the subcontractor must provide the contractor
135 with an affidavit stating that the subcontractor does not
136 employ, contract with, or subcontract with an unauthorized
137 alien.
138 2. The contractor shall maintain a copy of such affidavit
139 for the duration of the contract.
140 (c)l. A public employer, contractor, or subcontractor who
141 has a good faith belief that a person or entity with which it is
142 contracting has knowingly violated s. 448.09(1) shall terminate
143 the contract with the person or entity.
144 2. A public employer that has a good faith belief that a
145 subcontractor knowingly violated this subsection, but the
146 contractor otherwise complied with this subsection, shall
147 promptly notify the contractor and order the contractor to
148 immediately terminate the contract with the subcontractor.
149 3. A contract terminated under subparagraph 1. or
150 subparagraph 2. is not a breach of contract and may not be
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151 considered as such.
152 (d) A public employer, contractor, or subcontractor may
153 file an action with a circuit or county court to challenge a
154 termination under paragraph (c) no later than 20 calendar days
155 after the date on which the contract was terminated.
156 ( e) If a public employer terminates a contract with a
157 contractor under paragraph (c), the contractor may not be
158 awarded a public contract for at least 1 year after the date on
159 which the contract was terminated.
160 (f) A contractor is liable for any additional costs
161 incurred by the public employer as a result of the termination
162 of the contract.
163 (3) PRIVATE EMPLOYERS.-
164 (a) Beginning January 1, 2021, a private employer shall,
165 after making an offer of employment which has been accepted by a
166 person, verify such person's employment eligibility. A private
167 employer is not required to verify the employment eligibility of
168 a continuing employee hired before January 1, 2021. However, if
169 a person is a contract employee retained by a private employer,
170 the private employer must verify the employee's employment
171 eligibility upon the renewal or extension of his or her
172 contract.
173 (b) A private employer shall verify a person's employment
174 eligibility by:
175 1. Using the E-Verify system; or
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176 2. Requiring the person to provide the same documentation
177 that is required by the United States Citizenship and
178 Immigration Services on its Employment Eligibility Verification
179 form (Form I-9).
180
181 The private employer must retain a copy of the documentation
182 provided under this subparagraph for at least 3 years after the
183 person's initial date of employment.
184 (c) A private employer that complies with this subsection
185 may not be held civilly or criminally liable under state law for
18 6 hiring, continuing to employ, or refusing to hire an
187 unauthorized alien if the information obtained under paragraph
188 (b) indicates that the person's work authorization status was
189 not that of an unauthorized alien.
190 (d) For purposes of this subsection, compliance with
191 paragraph (b) creates a rebuttable presumption that a private
192 employer did not knowingly employ an unauthorized alien in
193 violation of s. 448.09(1).
194 (e) For the purpose of enforcement of this section, the
195 following persons or entities may request, and the private
196 employer must provide copies of, any documents relied upon by
197 the private employer for the verification of a person's
198 employment eligibility, including, but not limited to, any
199 document required under paragraph (b):
200 1. The Department of Law Enforcement.
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201 2. The Attorney General.
202 3. The state attorney.
203 4. The statewide prosecutor.
204
205 A person or entity that makes a request under this paragraph
206 must rely upon the federal government to verify a person's
207 employment eligibility, and may not independently make a final
208 determination as to whether a person is an unauthorized alien.
209 (f) If a private employer does not comply with paragraph
210 (b), the department must require the private employer to provide
211 an affidavit to the department stating that the private employer
212 will comply with paragraph (b) and the private employer has
213 terminated the employment of all unauthorized aliens in this
214 state and that the employer will not intentionally or knowingly
215 employ an unauthorized alien in this state. If the private
216 employer does not provide the required affidavit within 30 days,
217 the department must order the appropriate agency to suspend all
218 applicable licenses held by the private employer until the
219 private employer provides the department with the required
220 affidavit. For the purposes of this paragraph, the licenses that
221 are subject to suspension under this paragraph are all licenses
222 that are held by the employer specific to the business location
223 where the unauthorized alien performed work. If the employer
224 does not hold a license specific to the business location where
225 the unauthorized alien performed work, but a license is
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226 necessary to operate the employer's business in general, the
227 licenses that are subject to suspension under this subdivision
228 are all licenses that are held by the employer at the employer's
229 primary place of business.
230 (g) For any private employer found to have violated
231 paragraph (f) three times within any 36 month period, the
232 department shall order the appropriate agencies to permanently
233 revoke all licenses that are held by the private employer
234 specific to the business location where the unauthorized alien
235 performed work. If the private employer does not hold a license
236 specific to the business location where the unauthorized alien
237 performed work, but a license is necessary to operate the
238 private employer's business in general, the department shall
239 order the appropriate agencies to permanently revoke all
240 licenses that are held by the private employer at the private
241 employer's primary place of business.
242 (4) CONSTRUCTION.-This section shall be enforced without
243 regard to race, color, or national origin and shall be construed
244 in a manner so as to be fully consistent with any applicable
245 federal laws or regulations.
246 Section 3. This act shall take effect July 1, 2020.
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