Meeting Packet - Commerce Committee, The Florida House of Representatives (March 16, 2021)
Summary
A meeting packet of the Commerce Committee of The Florida House of Representatives for Tuesday, March 16, 2021, 3:45 PM - 5:45 PM, with Blaise Ingoglia listed as Chair. The meeting agenda lists HB 77 Diesel Exhaust Fluid by Overdorf, HB 329 Alcoholic Beverage Licenses by Tomkow, HB 733 Credit for Reinsurance by Fetterhoff, HB 735 Preemption of Local Occupational Licensing by Harding, HB 855 Barber Services by Morales and HB 6073 Individual Wine Containers by LaMarca, among other bills. The packet includes staff analysis pages. The HB 77 analysis says the bill requires certain public airports that utilize DEF to create a DEF safety mitigation and exclusion plan, and the text of HB 6073 repeals Section 564.05, Florida Statutes.
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
Tuesday, March 16, 2021
3:45 PM – 5:45 PM
Webster Hall (212 Knott)
Meeting Packet
Chris Sprowls Blaise Ingoglia
Speaker Chair
The Florida House of Representatives
Commerce Committee
Chris Sprowls Blaise Ingoglia
Speaker Chair
Meeting Agenda
Tuesday, March 16, 2021
3:45 PM – 5:45 PM
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 77 Diesel Exhaust Fluid by Overdorf
• HB 329 Alcoholic Beverage Licenses by Tomkow
• HB 733 Credit for Reinsurance by Fetterhoff
• HB 735 Preemption of Local Occupational Licensing by Harding
• HB 797 Florida Life and Health Insurance Guaranty Association by Robinson, W.
• CS/HB 823 Alarm System Contractors by Regulatory Reform Subcommittee, Mariano
• HB 855 Barber Services by Morales
• CS/HB 1055 Pub. Rec./Trade Secrets by Government Operations Subcommittee, Gregory
• HB 6073 Individual Wine Containers by LaMarca
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 77
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 77 Diesel Exhaust Fluid
SPONSOR(S): Overdorf
TIED BILLS: IDEN./SIM. BILLS: SB 1082
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Tourism, Infrastructure & Energy Subcommittee 14 Y, 3 N Johnson Keating
2) Infrastructure & Tourism Appropriations 14 Y, 0 N Davis Davis
Subcommittee
3) Commerce Committee Johnson Hamon
SUMMARY ANALYSIS
The United States Environmental Protection Agency requires diesel exhaust fluid (DEF) to be used in newer
diesel engines, including diesel-powered vehicles used for aircraft and airport support. DEF is an exhaust
additive that reduces diesel emissions by neutralizing nitrogen oxide into harmless nitrogen gas and water.
In recent years, aircraft have experienced engine shutdowns and other engine operability issues resulting from
the contamination of jet fuel due to the inadvertent filling of an aircraft fuel truck’s anti-icing injection system
reservoirs with DEF instead of a fuel system icing inhibitor. The Federal Aviation Administration has made
preliminary safety recommendations regarding the use of DEF at airports, including additional training and the
adoption of best management practices.
The bill requires certain public airports that utilize DEF to create a DEF safety mitigation and exclusion plan
and provides minimum requirements for each plan. The plan must be approved by the governing body of the
airport and submitted to the Department of Transportation (DOT). The airport must regularly review its plan and
annually certify compliance to DOT.
The bill may have an indeterminate but likely insignificant, negative fiscal impact on state and local
governments. Tenants of public airports may incur expenditures associated with complying with DEF safety
mitigation and exclusion plans. See Fiscal Analysis for details.
The bill has an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Diesel Exhaust Fluid
Under the Clean Air Act of 1990, the United States Environmental Protection Agency (EPA), in order to
curb air pollution, has mandated stronger emission control standards for vehicle engines. Nitrogen
oxide (NOx) emissions can be a major pollutant from diesel engines and the EPA has targeted them for
significant reductions. In 2007, the EPA mandated that all new on-road heavy duty vehicles
manufactured after 2010 meet certain requirements, with light duty vehicles to meet these requirements
in 2014. In order to meet these standards, technologies such as selective catalytic reduction have been
developed.1
In diesel vehicles, selective catalytic reduction reduces NOx emissions by injecting diesel exhaust fluid
(DEF) into ammonia, which in the presence of the catalyst, reacts with the exhaust NOx to neutralize it
into harmless nitrogen gas and water.2
DEF is a nontoxic, nonhazardous, and colorless aqueous solution of automotive grade Urea in
deionized water.3
Airport Use of Diesel Exhaust Fluid
At public airports, the airport and its tenants use DEF in various diesel-powered vehicles including
aircraft refueling equipment, diesel aircraft fire-fighting equipment, life-saving equipment, and
emergency generators.4
In recent years, aircraft have experienced engine shutdowns and other engine operability issues due to
the contamination of jet fuel as a result of the inadvertent filling of aircraft fuel trucks anti-icing injection
system with DEF instead of fuel system icing inhibitor.5
Due to fuel system designs, some aircraft require fuel system icing inhibitor to prevent engine
operability issues in cold weather. Due to this requirement, for many years, airport refueling trucks have
been equipped with fuel system icing inhibitor injection systems, which require a fuel system icing
inhibitor fluid reservoir mounted on the truck to supply the injection system during refueling. Newer
refueling trucks contain a DEF reservoir in addition to the fuel system icing inhibitor reservoir. Since the
EPA’s mandate for selective catalytic reduction on non-road diesel trucks began in 2014, airport
refueling trucks with two reservoirs have begun appearing at airports.6
Between November 2017 and May 2019, there were three instances, two in Florida, in which multiple
aircraft had jet fuel contaminated with DEF or were refueled using equipment exposed to DEF.
Because of these instances, numerous aircraft had to perform emergency landings. The Federal
Aviation Administration (FAA) conducted a hazard analysis and issued preliminary recommendations to
address the problem, including additional training for ground support crews, adoption of best
1
Aircraft Diesel Exhaust Fluid Contamination Working Group, A collaborative Industry Report on the Hazard of Diesel Exhaust
Fluid Contamination of Aircraft Fuel, June 11, 2019, pp. 3-4. Available at:
https://download.aopa.org/advocacy/2019/2019_06_11_Aircraft_DEF_Contamination_Working_Group_Report_FINAL.pdf#:~:text=
AIRCRAFT%20DIESEL%20EXHAUST%20FLUID%20CONTAMINATION%20WORKING%20GROUP%20REPORT,events%2
0that%20have%20occurred%20to%20date;%20to%20immediately (last visited February 3, 2021).
2
Id.
3
Id.
4
Email from Lisa Waters, President/CEO Florida Airports Council, Diesel Exhaust Fluid, Nov. 4, 2019.
5
Federal Aviation Administration, Safety Assessment for Jet Fuel Contamination with Diesel Exhaust Fluid. August 30, 2019, p.4.
Available at: https://www.nata.aero/assets/Site_18/files/GIA/NATA_News/2019-08-30_Safety_Risk_Assessment_Report_DEF-
Final.pdf (last visited February 3, 2021).
6
Id.
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management practices, and dyeing either DEF or fuel system icing inhibitor so they can be
distinguished from each other.7 One recommendation called for the aviation industry to request that
EPA issue permanent relief from emission control/system performance inducements (which require the
use of DEF) for any non-road diesel powered vehicles at or on airports.8
The Florida Airports Council9 has initiated efforts to address fuel contamination issues and specifically
DEF. According to the Council, this effort is broad and intended to call attention to the issue and to
educate airports, users, fuel providers and community leaders about the safety concerns and how to
avoid fuel contamination. The Council indicates that it is working closely with its industry partners to
develop a program of operational best management practices that all Florida airports and fuel providers
can add to their training programs.10
Effect of the Bill
The bill requires the governing body of certain public airports11 to create a DEF safety mitigation and
exclusion plan for each fixed-base operator12 that performs onsite treatment of aviation fuel with a fuel
system icing inhibitor. This requirement applies to public airports at which:
Aviation fuels receive onsite treatment with fuel system icing inhibitors;
Aviation fuel is delivered by a publicly or privately owned fixed-base operator; and
Any aircraft fuel delivery vehicle or ground service equipment that uses DEF is operated within
150 feet of any aircraft.
At a minimum, each airport’s plan must include:
A full inventory of each fixed-base operator's DEF on the airport’s premises.
Designation of specific areas where the fixed-base operator's DEF may be stored on the
airport’s premises. To the extent practicable, such areas may not be located within or on a
vehicle operated for the fueling or servicing of aircraft or at any aviation fuel transfer facility or
bulk aviation fuel storage facility.
Designation of specific areas where DEF may be added to vehicles. Such areas may not be
located in aircraft operating areas.
Incorporation of best practices for ensuring the proper labeling and storage of diesel exhaust
fluid.
Training in the proper use and storage of DEF for all employees of the fixed-base operator who
may come in contact with such fluid in the ordinary course of their duties.
Designation of specific areas where the fixed-base operator's fuel system icing inhibitor may be
stored on the airport’s premises.
Best practices for ensuring the proper labeling and storage of the fixed-base operator's fuel
system icing inhibitor.
Training in the proper use and storage of fuel system icing inhibitors for all employees of the
fixed-base operator who may come in contact with fuel system icing inhibitors in the ordinary
course of their duties.
Physical measures to secure fuel system icing inhibitor fill points on the fixed-base operator's
aircraft fuel delivery vehicles. Such measures must prevent the addition of any fluid to the fuel
system icing inhibitor fill point by unauthorized personnel.
7
Id.
8
Id. at 2
9
The Florida Airports Council is the official association of Florida’s publicly-owned and –operated airports. Florida Airports Council,
https://www.floridaairports.org/about-us/ (Last visited January 15, 2021).
10
Florida Airports Council: https://www.floridaairports.org/ (last visited January 15, 2021).
11
Section 330.37(6), F.S., defines the term “public airport” as an airport, publicly or privately owned, which is open for use by the
public.
12
The term “fixed base operator” refers to commercial businesses allowed to operate on airport grounds in order to provide services to
the airport. Fixed based operators include, but are not limited to, fueling service, aircraft maintenance services and baggage handling.
https://www.presidential-aviation.com/fbo/ (last visited December 21, 2020).
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Each airport’s governing body, by September 1, 2021, must approve the DEF safety mitigation and
exclusion plan. By October 1, 2021, the governing body must submit the plan to the Department of
Transportation (DOT) and certify that all diesel exhaust fluid within the airport’s premises has been
secured.
By January 1, 2022, the DEF safety mitigation and exclusion plan must be fully implemented on each
airport’s premises.
By January 1 of each year, beginning in 2023, each public airport must certify to DOT the airport's
compliance with its diesel exhaust fluid safety mitigation and exclusion plan.
B. SECTION DIRECTORY:
Section 1 Creates s. 330.401, F.S., relating to the diesel exhaust fluid safety mitigation and exclusion
plans for public airports.
Section 2 Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill does not appear to impact state government revenues.
2. Expenditures:
There is an indeterminate, but likely insignificant fiscal impact to DOT associated with reviewing
airport DEF safety mitigation and exclusion plans. These expenditures can be absorbed within
existing resources.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill does not appear to impact local government revenues.
2. Expenditures:
There is an indeterminate, but likely negative fiscal impact to local governments operating public
airports associated with complying with DEF safety mitigation and exclusion plans.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Tenants of public airports, including fuel providers, will incur expenditures associated with complying
with the DEF safety mitigation and exclusion plans; however, the impact is indeterminate.
The bill may reduce costs associated with aircraft engine damages caused by DEF contamination and
emergency response related to engine failures.
D. FISCAL COMMENTS:
None.
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III. 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 public airports to develop DEF safety mitigation and exclusion plans;
however, an exemption may apply because there is likely an insignificant fiscal impact.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
This bill does not grant rulemaking authority, nor does it require rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 77 2021
1 A bill to be entitled
2 An act relating to diesel exhaust fluid; creating s.
3 330.401, F.S.; requiring the governing body of each
4 public airport that meets certain criteria to create a
5 diesel exhaust fluid safety mitigation and exclusion
6 plan for submission to the Department of
7 Transportation; providing plan requirements; requiring
8 an annual certification of compliance; providing an
9 effective date.
10
11 Be It Enacted by the Legislature of the State of Florida:
12
13 Section 1. Section 330.401, Florida Statutes, is created
14 to read:
15 330.401 Diesel exhaust fluid safety mitigation and
16 exclusion plan; certification.—
17 (1)(a) The governing body of each public airport as
18 defined in s. 330.27 at which:
19 1. Aviation fuels receive onsite treatment with fuel
20 system icing inhibitors;
21 2. Aviation fuel is delivered by a publicly or privately
22 owned fixed-base operator; and
23 3. Any aircraft fuel delivery vehicle or ground service
24 equipment that uses diesel exhaust fluid is operated within 150
25 feet of any aircraft
Page 1 of 4
CODING: Words stricken are deletions; words underlined are additions.
hb0077-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 77 2021
26
27 shall create a diesel exhaust fluid safety mitigation and
28 exclusion plan for each fixed-base operator that performs onsite
29 treatment of aviation fuel with a fuel system icing inhibitor.
30 (b) The plan must include, at a minimum:
31 1. A full inventory of all the fixed-base operator's
32 diesel exhaust fluid on the premises of the airport.
33 2. Designation of specific areas where the fixed-base
34 operator's diesel exhaust fluid may be stored on the premises of
35 the airport. To the extent practicable, such areas may not be
36 located within or on a vehicle operated for the fueling or
37 servicing of aircraft or at any aviation fuel transfer facility
38 or bulk aviation fuel storage facility.
39 3. Designation of specific areas where diesel exhaust
40 fluid may be added to vehicles. Such areas may not be located in
41 aircraft operating areas.
42 4. Incorporation of best practices for ensuring the proper
43 labeling and storage of diesel exhaust fluid.
44 5. Incorporation of training in the proper use and storage
45 of diesel exhaust fluid for all employees of the fixed-base
46 operator who may come in contact with such fluid in the ordinary
47 course of their duties.
48 6. Designation of specific areas where the fixed-base
49 operator's fuel system icing inhibitor may be stored on the
50 premises of the airport.
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hb0077-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 77 2021
51 7. Incorporation of best practices for ensuring the proper
52 labeling and storage of the fixed-base operator's fuel system
53 icing inhibitor.
54 8. Incorporation of training in the proper use and storage
55 of fuel system icing inhibitors for all employees of the fixed-
56 base operator who may come in contact with fuel system icing
57 inhibitors in the ordinary course of their duties.
58 9. Physical measures to secure fuel system icing inhibitor
59 fill points on the fixed-base operator's aircraft fuel delivery
60 vehicles. Such measures shall prevent the addition of any fluid
61 to the fuel system icing inhibitor fill point by unauthorized
62 personnel.
63 (2) The diesel exhaust fluid safety mitigation and
64 exclusion plan must be approved by the governing body by
65 September 1, 2021. The governing body must, by October 1, 2021,
66 submit the plan to the Department of Transportation and certify
67 that all diesel exhaust fluid has been secured within the
68 premises of the airport.
69 (3) The diesel exhaust fluid safety mitigation and
70 exclusion plan must be fully implemented on the premises of each
71 airport by January 1, 2022.
72 (4) By January 1 of each year, beginning in 2023, each
73 public airport must certify to the department the airport's
74 compliance with its diesel exhaust fluid safety mitigation and
75 exclusion plan.
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hb0077-00
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 77 2021
76 Section 2. This act shall take effect July 1, 2021.
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CODING: Words stricken are deletions; words underlined are additions.
hb0077-00
COMMERCE COMMITTEE
HB 77 by Rep. Overdorf
DIESEL EXHAUST FLUID
AMENDMENT SUMMARY
MARCH 16, 2021
Amendment 1 by Rep. Overdorf (Line 62):
• Authorizes the airport’s governing body, at its discretion, to delegate the creation
and implementation of the diesel exhaust fluid safety mitigation and exclusion
plan to the onsite fixed-based operator.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 77 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Overdorf offered the following:
3
4 Amendment (with title amendment)
5 Between lines 62 and 63, insert:
6 (c) The governing body may, at its discretion, delegate
7 the creation and implementation of the plan to the onsite fixed-
8 based operator.
9
10 -----------------------------------------------------
11 T I T L E A M E N D M E N T
12 Remove line 7 and insert:
13 Transportation; providing plan requirements;
14 authorizing a governing body to delegate creation and
15 implementation of the plan to a fixed-based operator;
16 requiring
867973 - h0077-line 62.docx
Published On: 3/15/2021 5:32:16 PM
Page 1 of 1
HB 329
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 329 Alcoholic Beverage Licenses
SPONSOR(S): Tomkow
TIED BILLS: IDEN./SIM. BILLS: SB 134
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 14 Y, 0 N Willson Anstead
2) Commerce Committee Willson 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 administers and enforces the Beverage Law.
The bill:
Allows certain restaurants to sell or deliver alcoholic beverages in a sealed container to-go, if
accompanied by food.
Amends s. 564.09, F.S., to specify that a restaurant patron may take home a partially consumed bottle
of wine with the purchase of “a meal.”
Allows a restaurant licensed to sell wine to sell or deliver wine bottles, individual servings of wine, and
wine-based beverages to-go in a sealed container, if accompanied by food.
Removes the “full course” part of the meal requirement for taking home an unfinished bottle of wine.
Allows bars to sell or deliver liquor bottles, individual servings of liquor, or liquor-based beverages to-go
in a sealed container, if accompanied by food.
The bill does not have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Beverage Law
In Florida, the Beverage Law1 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 in s. 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 “Wine” means “all beverages made from fresh fruits, berries, or grapes, either by
natural fermentation or by natural fermentation with brandy added, in the manner required by the laws
and regulations of the United States, and includes all sparkling wines, champagnes, combination of the
aforesaid beverages, sake, vermouths, and like products.4
Restaurants - Off-Premises Consumption of Wine
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, entrée, 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.5
Alcoholic Beverage Deliveries
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.6
Special Licenses
Section 561.20(1), F.S., limits, by county, the number of alcoholic beverage licenses that may be
issued for the sale of distilled spirits, to one license per 7,500 residents within the county. These limited
alcoholic beverage licenses are known as “quota” licenses. The quota license is the only alcoholic
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. 564.01, F.S.
5 S. 564.09, F.S.
6 S. 561.57(1) & (2), F.S.
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beverage license that is limited in number; all other types of alcoholic beverage licenses are available
without limitation, if certain conditions are met.
A “special license” is an exception to the quota licensing scheme, which allows certain entities to serve
liquor without a quota license. One such special license is a “special restaurant license,” (SRX) which
applies to a food service establishment that has 2,500 square feet, is equipped to serve 150 persons at
one time, and derives at least 51 percent of its gross food and beverage revenue from the sale of food
and nonalcoholic beverages. SRX licensees may not operate as a package store and may not sell
intoxicating beverages under such license after the hours of serving or consumption of food have
elapsed. Such a food service establishment must be audited by ABT for compliance with the food and
nonalcoholic beverage sales percentage requirements during the first 60-day operating period, and
each 12-month operating period thereafter.
Open Containers
Section 316.1936, F.S., prohibits possession7 of open containers of alcoholic beverages in vehicles
and provides certain exceptions, including a provision specifying that a bottle of wine that has been
resealed and is transported pursuant to s. 564.09, F.S., is not an open container.8
Executive Orders
On March 20, 2020, Governor DeSantis signed Executive Order 20-719, which closed restaurants for
on-site consumption of food and alcohol, and authorized SRX licensees to sell package sales of alcohol
for delivery, take-out, or consumption off-premises if the alcohol is in a sealed container and the order
includes food. While restaurants have since been allowed to reopen for on-site consumption of food
and alcohol,10 SRX licensees are still able to sell for delivery, take-out, or consumption off-premises
alcohol in sealed containers with the purchase of food.
Effect of the Bill
The bill amends s. 561.20(2)(a)4., F.S., to specify that special restaurant licensees (SRX) may sell or
deliver alcoholic beverages by the package in a sealed container for off-premises consumption,
including wine-based and liquor-based beverages prepared by the licensee and packaged in a
container sealed by the licensee. The sale or delivery of such beverages must be accompanied by the
sale of food, and the delivery of alcoholic beverages must comply with s. 561.57, F.S. Malt beverages
sold or delivered pursuant to this provision must comply with container size, labeling, and filling
requirements.
The bill amends s. 564.09, F.S., to specify that a restaurant patron need only purchase “a meal” in
order to remove a partially consumed bottle of wine from the restaurant. The bill also authorizes
restaurants which are licensed to sell wine for consumption on the premises to sell or deliver a
manufacturer-sealed bottle of wine, or an individual serving of wine or wine-based beverage prepared
by the licensee, for off-premises consumption if the wine is delivered in a container sealed by the
licensee and the sale or delivery is accompanied by the purchase of a meal. Such deliveries must
comply with s. 561.57, F.S.
The bill amends s. 565.045, F.S., to specify that vendors licensed under s. 565.02(1)(b)-(f), F.S.,11
generally non package-store quota license holders, may sell or deliver alcoholic beverages in
7 S. 316.1936(3), F.S. specifies that “An open container shall be considered to be in the possession of the operator of a
vehicle if the container is not in the possession of a passenger and is not located in a locked glove compartment, locked
trunk, or other locked nonpassenger area of the vehicle.”
8 S. 316.1936(9), F.S.
9 Executive Order 20-71 expires upon the expiration of Executive Order 20-52, which was most recently extended
pursuant to Executive Order 21-45 on Feb. 26, 2021, for an additional 60 days.
10 See Executive Order 20-123 (May 14, 2020).
11 S. 565.02(1)(b)-(f), F.S., refers to vendors who are permitted to sell any alcoholic beverage regardless of alcoholic
content for consumption on the premises.
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manufacturer-sealed containers. The bill also authorizes such licensees to sell or deliver an individual
serving of liquor or a liquor-based beverage prepared by the licensee for off-premises consumption if
the container is sealed by the licensee and accompanied by the sale of food.
The bill has an effective date of July 1, 2021.
B. SECTION DIRECTORY:
Section 1 Amends s. 561.20, F.S.; authorizing certain food service establishments to sell or deliver
alcoholic beverages for off-premises consumption if specified requirements are met and
deletes a provision prohibiting certain food service establishments from operating as a
package store.
Section 2 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 and authorizing certain restaurants to sell or deliver wine in specified
packages under certain circumstances.
Section 3 Amends s. 565.045, F.S.; revising requirements for the sale of alcoholic beverages by
certain vendors and authorizing certain vendors to deliver specified alcoholic beverages
and liquor under certain circumstances.
Sections 4-5 Reenacts ss. 316.1936(9) and 564.05, F.S., relating to the possession of open
containers of alcoholic beverages in vehicles and the limitation of size of individual wine
containers, respectively, to incorporate the amendments made to s. 564.09, F.S., in
references thereto.
Section 6 Provides for an effective date.
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:
The bill may enable food service establishments that also hold certain alcoholic beverage licenses to
increase their sales revenue through the sale of alcoholic beverages with food delivery orders.
D. FISCAL COMMENTS:
None.
STORAGE NAME: h0329b.COM PAGE: 4
DATE: 3/12/2021
III. 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:
DBPR has sufficient rule-making authority to modify current rules to reflect the modifications provided
for in the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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DATE: 3/12/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 329 2021
1 A bill to be entitled
2 An act relating to alcoholic beverage licenses;
3 amending s. 561.20, F.S.; authorizing certain food
4 service establishments to sell or deliver alcoholic
5 beverages for off-premises consumption if specified
6 requirements are met; deleting a provision prohibiting
7 certain food service establishments from operating as
8 a package store; amending s. 564.09, F.S.; revising
9 provisions that authorize a restaurant to allow
10 patrons to remove partially consumed bottles of wine
11 from a restaurant for off-premises consumption;
12 authorizing certain restaurants to sell or deliver
13 wine in specified packages under certain
14 circumstances; amending s. 565.045, F.S.; revising
15 requirements for the sale of alcoholic beverages by
16 certain vendors; authorizing certain vendors to
17 deliver specified alcoholic beverages and liquor under
18 certain circumstances; reenacting ss. 316.1936(9) and
19 564.05, F.S., relating to the possession of open
20 containers of alcoholic beverages in vehicles and the
21 limitation of size of individual wine containers,
22 respectively, to incorporate the amendments made to s.
23 564.09, F.S., in references thereto; providing an
24 effective date.
25
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26 Be It Enacted by the Legislature of the State of Florida:
27
28 Section 1. Paragraph (a) of subsection (2) of section
29 561.20, Florida Statutes, is amended to read:
30 561.20 Limitation upon number of licenses issued.—
31 (2)(a) The limitation of the number of licenses as
32 provided in this section does not prohibit the issuance of a
33 special license to:
34 1. Any bona fide hotel, motel, or motor court of not fewer
35 than 80 guest rooms in any county having a population of less
36 than 50,000 residents, and of not fewer than 100 guest rooms in
37 any county having a population of 50,000 residents or greater;
38 or any bona fide hotel or motel located in a historic structure,
39 as defined in s. 561.01(21), with fewer than 100 guest rooms
40 which derives at least 51 percent of its gross revenue from the
41 rental of hotel or motel rooms, which is licensed as a public
42 lodging establishment by the Division of Hotels and Restaurants;
43 provided, however, that a bona fide hotel or motel with no fewer
44 than 10 and no more than 25 guest rooms which is a historic
45 structure, as defined in s. 561.01(21), in a municipality that
46 on the effective date of this act has a population, according to
47 the University of Florida's Bureau of Economic and Business
48 Research Estimates of Population for 1998, of no fewer than
49 25,000 and no more than 35,000 residents and that is within a
50 constitutionally chartered county may be issued a special
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51 license. This special license shall allow the sale and
52 consumption of alcoholic beverages only on the licensed premises
53 of the hotel or motel. In addition, the hotel or motel must
54 derive at least 60 percent of its gross revenue from the rental
55 of hotel or motel rooms and the sale of food and nonalcoholic
56 beverages; provided that this subparagraph shall supersede local
57 laws requiring a greater number of hotel rooms;
58 2. Any condominium accommodation of which no fewer than
59 100 condominium units are wholly rentable to transients and
60 which is licensed under chapter 509, except that the license
61 shall be issued only to the person or corporation that operates
62 the hotel or motel operation and not to the association of
63 condominium owners;
64 3. Any condominium accommodation of which no fewer than 50
65 condominium units are wholly rentable to transients, which is
66 licensed under chapter 509, and which is located in any county
67 having home rule under s. 10 or s. 11, Art. VIII of the State
68 Constitution of 1885, as amended, and incorporated by reference
69 in s. 6(e), Art. VIII of the State Constitution, except that the
70 license shall be issued only to the person or corporation that
71 operates the hotel or motel operation and not to the association
72 of condominium owners;
73 4. A food service establishment that has 2,500 square feet
74 of service area, is equipped to serve meals to 150 persons at
75 one time, and derives at least 51 percent of its gross food and
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76 beverage revenue from the sale of food and nonalcoholic
77 beverages during the first 60-day operating period and each 12-
78 month operating period thereafter. A licensee under this
79 subparagraph may sell or deliver alcoholic beverages by the
80 package in a sealed container for off-premises consumption if
81 the sale or delivery is accompanied by the sale of food within
82 the same order. Such authorized sale or delivery includes wine-
83 based and liquor-based beverages prepared by the licensee and
84 packaged in a container sealed by the licensee. Any sale or
85 delivery of malt beverages must comply with the container size,
86 labeling, and filling requirements imposed under s. 563.06. Any
87 delivery of an alcoholic beverage under this subparagraph must
88 comply with s. 561.57. A food service establishment granted a
89 special license on or after January 1, 1958, pursuant to general
90 or special law may not operate as a package store and may not
91 sell intoxicating beverages under such license after the hours
92 of serving or consumption of food have elapsed. Failure by a
93 licensee to meet the required percentage of food and
94 nonalcoholic beverage gross revenues during the covered
95 operating period shall result in revocation of the license or
96 denial of the pending license application. A licensee whose
97 license is revoked or an applicant whose pending application is
98 denied, or any person required to qualify on the special license
99 application, is ineligible to have any interest in a subsequent
100 application for such a license for a period of 120 days after
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101 the date of the final denial or revocation;
102 5. Any caterer, deriving at least 51 percent of its gross
103 food and beverage revenue from the sale of food and nonalcoholic
104 beverages at each catered event, licensed by the Division of
105 Hotels and Restaurants under chapter 509. This subparagraph does
106 not apply to a culinary education program, as defined in s.
107 381.0072(2), which is licensed as a public food service
108 establishment by the Division of Hotels and Restaurants and
109 provides catering services. Notwithstanding any law to the
110 contrary, a licensee under this subparagraph shall sell or serve
111 alcoholic beverages only for consumption on the premises of a
112 catered event at which the licensee is also providing prepared
113 food, and shall prominently display its license at any catered
114 event at which the caterer is selling or serving alcoholic
115 beverages. A licensee under this subparagraph shall purchase all
116 alcoholic beverages it sells or serves at a catered event from a
117 vendor licensed under s. 563.02(1), s. 564.02(1), or licensed
118 under s. 565.02(1) subject to the limitation imposed in
119 subsection (1), as appropriate. A licensee under this
120 subparagraph may not store any alcoholic beverages to be sold or
121 served at a catered event. Any alcoholic beverages purchased by
122 a licensee under this subparagraph for a catered event that are
123 not used at that event must remain with the customer; provided
124 that if the vendor accepts unopened alcoholic beverages, the
125 licensee may return such alcoholic beverages to the vendor for a
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126 credit or reimbursement. Regardless of the county or counties in
127 which the licensee operates, a licensee under this subparagraph
128 shall pay the annual state license tax set forth in s.
129 565.02(1)(b). A licensee under this subparagraph must maintain
130 for a period of 3 years all records and receipts for each
131 catered event, including all contracts, customers' names, event
132 locations, event dates, food purchases and sales, alcoholic
133 beverage purchases and sales, nonalcoholic beverage purchases
134 and sales, and any other records required by the department by
135 rule to demonstrate compliance with the requirements of this
136 subparagraph. Notwithstanding any law to the contrary, any
137 vendor licensed under s. 565.02(1) subject to the limitation
138 imposed in subsection (1), may, without any additional licensure
139 under this subparagraph, serve or sell alcoholic beverages for
140 consumption on the premises of a catered event at which prepared
141 food is provided by a caterer licensed under chapter 509. If a
142 licensee under this subparagraph also possesses any other
143 license under the Beverage Law, the license issued under this
144 subparagraph may shall not authorize the holder to conduct
145 activities on the premises to which the other license or
146 licenses apply that would otherwise be prohibited by the terms
147 of that license or the Beverage Law. Nothing in This section
148 does not shall permit the licensee to conduct activities that
149 are otherwise prohibited by the Beverage Law or local law. The
150 Division of Alcoholic Beverages and Tobacco is hereby authorized
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151 to adopt rules to administer the license created in this
152 subparagraph, to include rules governing licensure,
153 recordkeeping, and enforcement. The first $300,000 in fees
154 collected by the division each fiscal year pursuant to this
155 subparagraph shall be deposited in the Department of Children
156 and Families' Operations and Maintenance Trust Fund to be used
157 only for alcohol and drug abuse education, treatment, and
158 prevention programs. The remainder of the fees collected shall
159 be deposited into the Hotel and Restaurant Trust Fund created
160 pursuant to s. 509.072; or
161 6. A culinary education program as defined in s.
162 381.0072(2) which is licensed as a public food service
163 establishment by the Division of Hotels and Restaurants.
164 a. This special license shall allow the sale and
165 consumption of alcoholic beverages on the licensed premises of
166 the culinary education program. The culinary education program
167 shall specify designated areas in the facility where the
168 alcoholic beverages may be consumed at the time of application.
169 Alcoholic beverages sold for consumption on the premises may be
170 consumed only in areas designated under pursuant to s.
171 561.01(11) and may not be removed from the designated area. Such
172 license shall be applicable only in and for designated areas
173 used by the culinary education program.
174 b. If the culinary education program provides catering
175 services, this special license shall also allow the sale and
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176 consumption of alcoholic beverages on the premises of a catered
177 event at which the licensee is also providing prepared food. A
178 culinary education program that provides catering services is
179 not required to derive at least 51 percent of its gross revenue
180 from the sale of food and nonalcoholic beverages.
181 Notwithstanding any law to the contrary, a licensee that
182 provides catering services under this sub-subparagraph shall
183 prominently display its beverage license at any catered event at
184 which the caterer is selling or serving alcoholic beverages.
185 Regardless of the county or counties in which the licensee
186 operates, a licensee under this sub-subparagraph shall pay the
187 annual state license tax set forth in s. 565.02(1)(b). A
188 licensee under this sub-subparagraph must maintain for a period
189 of 3 years all records required by the department by rule to
190 demonstrate compliance with the requirements of this sub-
191 subparagraph.
192 c. If a licensee under this subparagraph also possesses
193 any other license under the Beverage Law, the license issued
194 under this subparagraph does not authorize the holder to conduct
195 activities on the premises to which the other license or
196 licenses apply that would otherwise be prohibited by the terms
197 of that license or the Beverage Law. Nothing in This
198 subparagraph does not shall permit the licensee to conduct
199 activities that are otherwise prohibited by the Beverage Law or
200 local law. Any culinary education program that holds a license
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201 to sell alcoholic beverages shall comply with the age
202 requirements set forth in ss. 562.11(4), 562.111(2), and 562.13.
203 d. The Division of Alcoholic Beverages and Tobacco may
204 adopt rules to administer the license created in this
205 subparagraph, to include rules governing licensure,
206 recordkeeping, and enforcement.
207 e. A license issued pursuant to this subparagraph does not
208 permit the licensee to sell alcoholic beverages by the package
209 for off-premises consumption.
210
211 However, any license heretofore issued to any such hotel, motel,
212 motor court, or restaurant or hereafter issued to any such
213 hotel, motel, or motor court, including a condominium
214 accommodation, under the general law may shall not be moved to a
215 new location, such license being valid only on the premises of
216 such hotel, motel, motor court, or restaurant. Licenses issued
217 to hotels, motels, motor courts, or restaurants under the
218 general law and held by such hotels, motels, motor courts, or
219 restaurants on May 24, 1947, shall be counted in the quota
220 limitation contained in subsection (1). Any license issued for
221 any hotel, motel, or motor court under this law shall be issued
222 only to the owner of the hotel, motel, or motor court or, in the
223 event the hotel, motel, or motor court is leased, to the lessee
224 of the hotel, motel, or motor court; and the license shall
225 remain in the name of the owner or lessee so long as the license
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226 is in existence. Any special license now in existence heretofore
227 issued under this law cannot be renewed except in the name of
228 the owner of the hotel, motel, motor court, or restaurant or, in
229 the event the hotel, motel, motor court, or restaurant is
230 leased, in the name of the lessee of the hotel, motel, motor
231 court, or restaurant in which the license is located and must
232 remain in the name of the owner or lessee so long as the license
233 is in existence. Any license issued under this section shall be
234 marked "Special," and nothing herein provided shall limit,
235 restrict, or prevent the issuance of a special license for any
236 restaurant or motel which shall hereafter meet the requirements
237 of the law existing immediately before prior to the effective
238 date of this act, if construction of such restaurant has
239 commenced before prior to the effective date of this act and is
240 completed within 30 days thereafter, or if an application is on
241 file for such special license at the time this act takes effect;
242 and any such licenses issued under this proviso may be annually
243 renewed as now provided by law. Nothing herein prevents an
244 application for transfer of a license to a bona fide purchaser
245 of any hotel, motel, motor court, or restaurant by the purchaser
246 of such facility or the transfer of such license pursuant to
247 law.
248 Section 2. Section 564.09, Florida Statutes, is amended to
249 read:
250 564.09 Restaurants; off-premises consumption of wine.—
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251 (1) Notwithstanding any other provision of law, a
252 restaurant licensed to sell wine on the premises may permit a
253 patron to remove one unsealed bottle of wine for consumption off
254 the premises if the patron has purchased a full course meal
255 consisting of a salad or vegetable, entree, a beverage, and
256 bread and consumed a portion of the bottle of wine with such
257 meal on the restaurant premises. A partially consumed bottle of
258 wine that is to be removed from the premises must be securely
259 resealed by the licensee or its employees before removal from
260 the premises. The partially consumed bottle of wine shall be
261 placed in a bag or other container that is secured in such a
262 manner that it is visibly apparent if the container has been
263 subsequently opened or tampered with, and a dated receipt for
264 the bottle of wine and full course meal shall be provided by the
265 licensee and attached to the container. If transported in a
266 motor vehicle, the container with the resealed bottle of wine
267 must be placed in a locked glove compartment, a locked trunk, or
268 the area behind the last upright seat of a motor vehicle that is
269 not equipped with a trunk.
270 (2) Notwithstanding any other provision of law, a
271 restaurant licensed to sell wine for consumption on the premises
272 may sell or deliver a manufacturer-sealed bottle of wine, or an
273 individual serving of wine or wine-based beverage prepared by
274 the licensee, for off-premises consumption if the wine is
275 delivered in a container sealed by the licensee and the sale or
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276 delivery is accompanied by the purchase of a meal within the
277 same order. Any delivery made under this subsection must comply
278 with s. 561.57.
279 Section 3. Subsection (1) of section 565.045, Florida
280 Statutes, is amended to read:
281 565.045 Regulations for consumption on premises; penalty;
282 exemptions.—
283 (1) Vendors licensed under s. 565.02(1)(b)-(f):
284 (a) Shall provide seats for the use of their customers;
285 (b) . Such vendors May sell or deliver alcoholic beverages
286 by the drink or in manufacturer-sealed sealed containers for
287 consumption on or off the premises where sold; and
288 (c) May sell or deliver an individual serving of liquor or
289 a liquor-based beverage prepared by the licensee for off-
290 premises consumption if the liquor or liquor-based beverage is
291 in a container sealed by the licensee.
292
293 All sales or deliveries of alcoholic beverages made under
294 paragraph (c) for off-premises consumption must be accompanied
295 by the sale of food within the same order.
296 Section 4. For the purpose of incorporating the amendment
297 made by this act to section 564.09, Florida Statutes, in a
298 reference thereto, subsection (9) of section 316.1936, Florida
299 Statutes, is reenacted and amended to read:
300 316.1936 Possession of open containers of alcoholic
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301 beverages in vehicles prohibited; penalties.—
302 (9) A bottle of wine that has been resealed and is
303 transported pursuant to s. 564.09 is not an open container under
304 the provisions of this section.
305 Section 5. For the purpose of incorporating the amendment
306 made by this act to section 564.09, Florida Statutes, in a
307 reference thereto, section 564.05, Florida Statutes, is
308 reenacted to read:
309 564.05 Limitation of size of individual wine containers;
310 penalty.—It is unlawful for a person to sell within this state
311 wine in an individual container holding more than 1 gallon of
312 such wine, unless such wine is in a reusable container holding
313 5.16 gallons. However, qualified distributors and manufacturers
314 may sell wine to other qualified distributors or manufacturers
315 in any size container. Except as provided in s. 564.09, wine
316 sold or offered for sale by a licensed vendor to be consumed off
317 the premises shall be in the unopened original container. A
318 person convicted of a violation of this section commits a
319 misdemeanor of the second degree, punishable as provided in s.
320 775.082 or s. 775.083.
321 Section 6. This act shall take effect July 1, 2021.
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COMMERCE COMMITTEE
HB 329 by Rep. Tomkow
Alcoholic Beverage Licenses
AMENDMENT SUMMARY
March 16, 2021
Amendment 1 by Rep. Tomkow (Line 78):
The amendment:
• Specifies that a special restaurant licensee that sells certain alcoholic beverages for off-
premises consumption may not sell a factory-sealed bottle of liquor or operate as a
package store.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 329 (2021)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Tomkow offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 78-90 and insert:
6 month operating period thereafter. A licensee under this
7 subparagraph may sell or deliver alcoholic beverages in a sealed
8 container for off-premises consumption if the sale or delivery
9 is accompanied by the sale of food within the same order. Such
10 authorized sale or delivery includes wine-based and liquor-based
11 beverages prepared by the licensee and packaged in a container
12 sealed by the licensee. A licensee under this subparagraph may
13 not sell a bottle of distilled spirits sealed by a manufacturer.
14 Any sale or delivery of malt beverages must comply with the
15 container size, labeling, and filling requirements imposed under
16 s. 563.06. Any delivery of an alcoholic beverage under this
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Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 329 (2021)
Amendment No. 1
17 subparagraph must comply with s. 561.57. A food service
18 establishment granted a special license on or after January 1,
19 1958, pursuant to general or special law may not operate as a
20 package store and may not
21
22 -----------------------------------------------------
23 T I T L E A M E N D M E N T
24 Remove lines 6-8 and insert:
25 requirements are met; amending s. 564.09, F.S.;
26 revising
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Page 2 of 2
HB 733
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 733 Credit for Reinsurance
SPONSOR(S): Fetterhoff
TIED BILLS: IDEN./SIM. BILLS: SB 728
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N Fortenberry Luczynski
2) State Administration & Technology 14 Y, 0 N Lee Topp
Appropriations Subcommittee
3) Commerce Committee Fortenberry Hamon
SUMMARY ANALYSIS
Reinsurance is a transaction between a primary insurer (ceding insurer) and a reinsurer (assuming insurer)
whereby the assuming insurer agrees to cover all or part of the ceding insurer’s losses or loss adjustment
expenses in exchange for a premium. Because of the impact of hurricanes in Florida, the catastrophe
protection provided by reinsurance is a significant reason for ceding insurers’ purchase of reinsurance within
the state. Most reinsurance that United States (U.S.) ceding insurers acquire is placed with non-U.S. assuming
insurers. Because state insurance regulators do not regulate non-U.S. insurers or assuming insurers, the
purchase of reinsurance by Florida insurers from such non-U.S. companies provides concern and challenges
for state insurance regulators. Depending on their status within Florida, assuming insurers may be authorized
or unauthorized. When an assuming insurer is an unauthorized assuming insurer within Florida, the Florida
Office of Insurance Regulation (OIR) does not have direct regulatory authority over that assuming insurer. In
order to exercise some indirect regulatory authority over these assuming insurers, OIR limits the ceding
insurer’s credit for reinsurance unless the assuming insurer meets certain criteria. Credit for reinsurance
means that a ceding insurer is permitted under statutory accounting rules to recognize the reinsurance as an
asset or as a reduction from liability for the amount of the ceded liability or risk transferred.
The bill amends the reinsurance law to add criteria that an assuming insurer must meet in order for a ceding
insurer to be given credit for reinsurance. These criteria include having its head office or its domicile, and being
licensed in, a reciprocal jurisdiction, maintaining minimum capital and surplus, meeting minimum solvency or
capital ratios, providing prompt notice to OIR if it falls below minimum requirements or has legal action taken
against it, responding to OIR’s document requests, and maintaining a practice of prompt payment of claims.
The bill also specifies certain elements that an assuming insurer must include in its reinsurance agreements in
order for the ceding insurer to take credit for reinsurance. The bill requires that an assuming insurer’s
regulatory authority confirm to OIR that the assuming insurer has complied with the capital and surplus
requirements and solvency or capital ratio requirements in the bill. It also establishes that a ceding insurer may
only take credit for reinsurance agreements entered into, amended, or renewed on or after the date at which
the assuming insurer has met the criteria in the bill. Additionally, OIR may suspend or revoke the assuming
insurer’s eligibility if the assuming insurer does not continue to meet the mandatory criteria.
If insurers are able to take credit for reinsurance for additional reinsurance transactions, they will be able to
recognize additional assets or reductions in liability. The greater an insurer’s assets or lower its liabilities, the
higher the insurer’s surplus. The insurer’s surplus provides a measure of financial stability and provides a
source of funds in the event that reserves are inadequate.
The bill has no fiscal impact on state or local government revenues or expenditures. It has no known direct
economic impact on the private sector.
The bill has an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0733d.COM
DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Reinsurance
Reinsurance is a transaction between a ceding insurer1 and an assuming insurer whereby the
assuming insurer agrees to cover all or part of the ceding insurer’s losses or loss adjustment expenses
in exchange for a premium. The purposes of reinsurance include increasing capacity, stabilizing
underwriting results, financing, providing catastrophe protection, withdrawing from a line or class of
business, spreading risk, and obtaining expertise.2 Because of the impact of hurricanes in Florida, the
catastrophe protection provided by reinsurance is a significant reason for ceding insurers’ purchase of
reinsurance within the state. While the purchase of reinsurance creates a contractual relationship
between the ceding insurer and the assuming insurer, it does not modify the relationship between the
ceding insurer and its policyholders.3 Therefore, the ceding insurer remains obligated to pay
policyholder claims and only the ceding insurer may recover from the assuming insurer unless an
applicable reinsurance contract specifies otherwise.4
Most reinsurance that United States (U.S.) ceding insurers acquire is placed with non-U.S. assuming
insurers. In fact, in 2018, offshore and non-U.S.-owned5 assuming insurers assumed 88.9 percent of
insurance premiums ceded by U.S. insurers.6 The availability of non-U.S. reinsurance contributes to
global diversification of risk, provides claims relief to U.S. insurers, and mitigates the financial impact of
catastrophes.7 Even though reinsurance provides benefits, because the U.S. state insurance
regulators do not regulate non-U.S. insurers or assuming insurers, the purchase of reinsurance by U.S.
insurers from such non-U.S. companies provides concern and challenges for state insurance
regulators.
Regulation of Reinsurance
Direct Regulation of Authorized Assuming Insurers and Credit for Reinsurance
Regulations and requirements for reinsurance transactions in Florida are provided in s. 624.610, F.S.,
and ch. 69O-144, F.A.C. The Florida Office of Insurance Regulation (OIR)8, directly regulates
authorized assuming insurers9 who are domiciled and licensed in Florida and assuming insurers
licensed in Florida who are domiciled in other states.10 Under current law, if a Florida insurer cedes
reinsurance to an assuming insurer who is authorized to transact insurance or reinsurance in Florida
1 National Association of Insurance Commissioners, https://content.naic.org/consumer_glossary.htm#R (last visited Feb. 22, 2021). A
ceding insurer is an insurer that transfers risk assumed from policyholders to an assuming insurer. The ceding insurer and assuming
insurer may also be referred to as the primary insurer and the reinsurer, respectively. Reinsurance is also colloquially referred to as
“insurance for insurers” because of the risk transfer from one insurer to another.
2
National Association of Insurance Commissioners, https://content.naic.org/cipr_topics/topic_reinsurance.htm (last visited Feb. 22,
2021).
3
See IRMI, In Defense of Reinsurance, https://www.irmi.com/articles/expert-commentary/in-defense-of-reinsurance (last visited Feb.
22, 2021).
4
Id.
5
In the insurance context, a company formed under laws other than those of a U.S. jurisdiction is known as an alien insurer. See s.
624.06, F.S.
6
Reinsurance Association of America, Offshore Reinsurance in the US Market: 2018 Data,
https://www.reinsurance.org/RAA/Industry_Data_Center/Offshore_Report/Offshore_Report_2018_Data.html (last visited Feb. 22,
2021).
7
International Association of Insurance Supervisors, Reinsurance and Financial Stability,
https://www.iaisweb.org/file/34046/reinsurance-and-financial-stability (last visited Feb. 22, 2021).
8
Statutes also refer to OIR as the office.
9
Authorized assuming insurers are licensed or accredited to provide reinsurance in a particular state. See s. 624.610, F.S.
10
S. 624.610, F.S.
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and meets other specified requirements, the ceding insurer is permitted to take credit for that
reinsurance on its books.11
Indirect Regulation of Unauthorized Assuming insurers and Credit for Reinsurance
When an assuming insurer is not an authorized assuming insurer within Florida, OIR does not have
direct regulatory authority over that assuming insurer. Pursuant to s. 624.610, F.S., and in order to
exercise some indirect regulatory authority over these assuming insurers, OIR limits the ceding
insurer’s credit for reinsurance unless the assuming insurer posts acceptable collateral or security in
the amount of the assuming insurer’s obligations under the reinsurance agreement.12
National Association of Insurance Commissioners
National Association of Insurance Commissioners Authority, Accreditation, and Model Laws
The National Association of Insurance Commissioners (NAIC) is a “standard-setting and regulatory
support organization created and governed by the chief insurance regulators from the 50 states, the
District of Columbia, and five U.S. territories.”13 While the NAIC does not have actual regulatory
authority, it allows state regulators to establish standards and best practices, to engage in peer review,
and to coordinate regulatory oversight.
The NAIC also maintains an accreditation program that considers key financial authorities and
responsibilities of state insurance regulators that warrant national consistency among jurisdictions in
order to improve oversight of multi-state insurers and reduce the cost of inefficiencies that is passed on
to policyholders.14 As of November 2019, all 50 states, the District of Columbia and Puerto Rico were
accredited by the NAIC.15
The NAIC develops model laws and regulations to promote uniformity among jurisdictions and to
balance the needs of insurers operating in multiple jurisdiction with those of the applicable regulatory
frameworks.16 The model laws are considered best practices for insurance regulation and the
accreditation program requires compliance with certain model laws, including those that are solvency
related.17
Credit for Reinsurance Model Law and Regulation and the Covered Agreement
Among the NAIC model laws and regulations that have become part of the accreditation standards are
the Credit for Reinsurance Model Law #785 and Credit for Reinsurance Model Regulation #786
(MLMR), amendments to which are designed to modernize reinsurance regulation in the U.S.18 In 2017,
the U.S. entered the Bilateral Agreement Between the United States of America and the European
Union on Prudential Measures Regarding Insurance and Reinsurance (Covered Agreement).19 In
11
Credit for reinsurance means that a ceding insurer is permitted under statutory accounting rules to recognize the reinsurance as an
asset or as a reduction from liability for the amount of the ceded liability or risk transferred. IRMI,
https://www.irmi.com/term/insurance-definitions/credit-for-reinsurance (last visited Feb. 26, 2021). See also s. 624.610(3), F.S.
12
See s. 624.610(4), F.S.
13
National Association of Insurance Commissioners, https://content.naic.org/index_about.htm (last visited Feb. 26, 2021).
14
National Association of Insurance Commissioners, State Legislative Brief The NAIC Accreditation Program,
https://www.naic.org/documents/cmte_legislative_liaison_brief_accreditation.pdf (last visited Feb. 26, 2021).
15
Id.
16
National Association of Insurance Commissioners, NAIC Model Laws,
https://content.naic.org/cipr_topics/topic_naic_model_laws.htm (last visited Feb. 26, 2021).
17
National Association of Insurance Commissioners, Accreditation, https://content.naic.org/cipr_topics/topic_accreditation.htm (last
visited Feb. 26, 2021).
18
National Association of Insurance Commissioners, Revisions to the Credit for Reinsurance Model Law,
https://www.naic.org/documents/committees_e_reinsurance_related_reinsurance_model_law_160108.pdf (last visited Feb. 26, 2021).
19
U.S. Department of the Treasury, U.S. – EU Covered Agreement, https://home.treasury.gov/policy-issues/financial-markets-
financial-institutions-and-fiscal-service/federal-insurance-office/covered-agreements/us-eu-covered-agreement (last visited Feb. 26,
2021). Covered agreements are authorized under 31 U.S.C. §§ 313–314, and are written bilateral or multilateral agreements regarding
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2019, the NAIC made revisions to MLMR in response to the Covered Agreement. In part, the Covered
Agreement commits the U.S. to phasing-out collateral requirements for European Union assuming
insurers by 2022.20 The Covered Agreement also exempts European Union assuming insurers from
current U.S. domiciliary requirements by creating a classification known as a reciprocal jurisdiction.21
Effect of the Bill
The changes to MLMR as a result of the Covered Agreement, necessitate that existing Florida law
regarding credit for reinsurance be amended. The bill creates new subsections within the reinsurance
statute regarding the circumstances under which ceding insurers can take credit for reinsurance. The
bill establishes that a ceding insurer will not be permitted to take credit for reinsurance when an
assuming insurer is not authorized or accredited to transact insurance or reinsurance in Florida unless
the assuming insurer agrees to the following in its reinsurance agreements:
If the assuming insurer fails to perform its obligations under the reinsurance agreement, and at
the request of the ceding insurer, the assuming insurer shall submit to the jurisdiction of any
U.S. court of competent jurisdiction, comply with the requirements necessary to give that court
jurisdiction, and abide by the final decision of that court or any appellate court in the event of an
appeal.
Designate the Florida Chief Financial Officer as its agent for service of process in a suit by a
ceding insurer.
The bill also provides that credit for reinsurance must be allowed when reinsurance is ceded to an
assuming insurer that meets all of the following criteria:
The assuming insurer must be licensed in, and have its head office in or be domiciled in, a
reciprocal jurisdiction.
The assuming insurer must have minimum capital and surplus as calculated by the
methodology of its domiciliary jurisdiction in the amount of $250 million or in a greater amount
specified by commission22 rule.
The assuming insurer must have a minimum solvency or capital ratio as specified by the
commission.
The assuming insurer must agree to provide prompt written notice to OIR if it falls below the
minimum requirements specified in the bill or if any regulatory action is taken against it for
serious noncompliance with applicable law.
The assuming insurer must consent in writing to:
o submit to the jurisdiction of Florida courts;
o designate the Florida Chief Financial Officer as its agent for service or process or an
attorney to accept lawful process;
o pay all final judgments declared enforceable in the jurisdiction where the judgments
were obtained;
o include a provision in each reinsurance agreement that, where necessary, the assuming
insurer will provide security in the amount equal to 100 percent of the assuming insurer’s
liabilities attributable to reinsurance ceded pursuant to the agreement; and
insurance or reinsurance entered into between the U.S. and one or more foreign authorities to provide protections for insurance and
reinsurance consumers similar to those provided by state insurance regulators within U.S. jurisdictions.
20
U.S. Department of the Treasury, Statement of the United States on the Covered Agreement with the European Union,
https://ustr.gov/sites/default/files/files/US%20Covered%20Agreement.pdf (last visited Feb. 26, 2021).
21
Id. Model Law #785 defines a reciprocal jurisdiction as:
A non-U.S. jurisdiction that is subject to an in-force covered agreement with the U.S., each within its legal authority, or in the
case of a covered agreement between the U.S. and the European Union, is a member state of the European Union;
A U.S. jurisdiction that meets the requirements for accreditation under the NAIC financial standards and accreditation
program;
A qualified jurisdiction, as determined by an insurance commissioner.
National Association of Insurance Commissioners, Credit for Reinsurance Model Law-785, https://www.naic.org/store/free/MDL-
785.pdf (last visited Feb. 26, 2021).
22
The commission referred to is the Financial Services Commission. Section 20.121(3), F.S., establishes that the Financial Services
Commission consists of the Governor, the Attorney General, the Chief Financial Officer, and the Commissioner of Agriculture.
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o confirm that the assuming insurer is not presently participating in any solvent scheme of
arrangement23 that involves Florida’s ceding insurers, and should the assuming insurer
enter into such arrangement, it will notify OIR and the ceding insurer and will provide
appropriate security.
The assuming insurer must provide documentation to OIR upon request under criteria specified
by the commission.
The assuming insurer must maintain a practice of prompt payment of claims under reinsurance
agreements pursuant to criteria specified by the commission.
The bill requires that an assuming insurer’s regulatory authority24 confirm to OIR on an annual basis
that the assuming insurer has complied with the capital and surplus requirements and solvency or
capital ratio requirements set forth in the bill. It also establishes that a ceding insurer may only take
credit for reinsurance agreements entered into, amended, or renewed on or after the date at which the
assuming insurer has met the mandatory criteria set forth within the bill. Additionally, credit may only be
taken for losses incurred and reserves reported on or after the later of the date upon which the
assuming insurer has met these requirements or has entered into a new reinsurance agreement,
amendment, or renewal with the ceding insurer.
Pursuant to the bill, if the ceding insurer is subject to rehabilitation, liquidation, or conservation, the
ceding insurer may obtain a court order requiring that the assuming insurer post security for all
outstanding ceded liabilities. If OIR determines that the assuming insurer no longer meets one or more
of the requirements under the bill, OIR may revoke or suspend the assuming insurer’s eligibility under
s. 624.610, F.S. While the eligibility is suspended, any reinsurance agreement issued, amended, or
renewed after the effective date of the suspension does not qualify for credit for reinsurance. If the
eligibility is revoked, credit for reinsurance may not be granted after the effective date of the revocation
for any reinsurance agreements entered into by the assuming insurer, including those entered into
before the date of the revocation.
The bill provides that the subsection created within s. 624.610, F.S., does not:
preclude an assuming insurer from volunteering information to OIR;
limit or alter the capacity of parties to a reinsurance agreement to agree on requirements for
security or other terms of the reinsurance agreement, except where otherwise prohibited, or to
renegotiate the reinsurance agreement; or
authorize an assuming insurer to withdraw or reduce the security provided under any
reinsurance agreement, except as authorized within the agreement.
The bill makes other technical changes to s. 624.610, F.S., including the deletion of an obsolete
subsection and the replacement of the word “commissioner” with “office” in several places.
By allowing insurers to take credit for reinsurance for additional reinsurance transactions, the bill allows
insurers to recognize additional assets or reductions in liability. The greater an insurer’s assets or lower
its liabilities, the higher the insurer’s surplus. The insurer’s surplus provides a measure of financial
stability and provides a source of funds in the event that reserves are inadequate.
B. SECTION DIRECTORY:
Section 1. Amends s. 624.610, F.S., relating to reinsurance.
Section 2. Provides an effective date of July 1, 2021.
23
A solvent scheme of arrangement is an English statutory procedure that is used by a solvent company to bring finality to some or all
of their insurance business, and by insolvent companies, as an alternative to liquidation. They involve running-off business and
making distributions to creditors. Michelle Kierce, et al., Schemes of arrangement and their ongoing currency, Insurance and
Reinsurance 2010, https://www.sidley.com/~/media/files/publications/2010/01/schemes-of-arrangement-and-their-ongoing-
currency/files/view-article/fileattachment/schemes-of-arrangement-and-their-ongoing-currenc__.pdf (last visited Feb. 27, 2021).
24
The assuming insurer’s regulatory authority is the entity that regulates the conduct of insurance companies in the assuming insurer’s
country of domicile.
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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:
None known.
D. FISCAL COMMENTS:
None.
III. 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:
Section 624.610(14), F.S., provides that the commission may adopt rules necessary to implement the
provisions of that section and “protect the interests of insureds, claimants, ceding insurers, assuming
insurers, and the public.” The rules must be in “substantial compliance” with the NAIC model
regulations relating to credit for reinsurance, the NAIC Accounting Practices and Procedures Manual as
of March 2002 and subsequent consistent amendments to it, and the NAIC model regulation for Credit
for Reinsurance and Life and Health Reinsurance Agreements.25 The bill requires the exercise of this
authority and the adoption of certain forms. Therefore, the bill will likely result in the changes to the
rules in ch. 69O-144, F.A.C.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
25
S. 624.610(14), F.S.
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IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 733 2021
1 A bill to be entitled
2 An act relating to credit for reinsurance; amending s.
3 624.610, F.S.; making a technical change; adding
4 conditions under which a ceding insurer must be
5 allowed credit for reinsurance; transferring specified
6 authority and duties relating to credit for
7 reinsurance from the Commissioner of Insurance to the
8 Office of Insurance Regulation; revising the attorney
9 designation requirement in reinsurance agreements with
10 certain assuming insurers under certain circumstances;
11 defining the terms "reciprocal jurisdiction" and
12 "covered agreement"; requiring the office to publish a
13 list of reciprocal jurisdictions on its website;
14 authorizing the office to remove reciprocal
15 jurisdictions under a specified circumstance;
16 specifying requirements for assuming insurers and
17 reinsurance agreements; specifying documentation
18 requirements; authorizing a ceding insurer or its
19 representative that is subject to rehabilitation,
20 liquidation, or conservation to seek a certain court
21 order; providing construction; specifying a limitation
22 on credit taken by a ceding insurer; requiring the
23 office to publish on its website a list of certain
24 assuming insurers; authorizing the office to revoke or
25 suspend an assuming insurer's eligibility under
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26 certain circumstances; prohibiting credit for
27 reinsurance under certain circumstances; providing
28 exceptions; making technical changes; conforming
29 provisions to changes made by the act; providing an
30 effective date.
31
32 Be It Enacted by the Legislature of the State of Florida:
33
34 Section 1. Subsections (4) through (15) of section
35 624.610, Florida Statutes, are renumbered as subsections (5)
36 through (16), respectively, subsection (2), paragraphs (c), (e),
37 and (f) of subsection (3), present subsection (4), paragraph (a)
38 of present subsection (5), and paragraph (b) of present
39 subsection (11) are amended, and a new subsection (4) is added
40 to that section, to read:
41 624.610 Reinsurance.—
42 (2) Credit for reinsurance must be allowed a ceding
43 insurer as either an asset or a reduction deduction from
44 liability on account of reinsurance ceded only when the
45 reinsurer meets the requirements of paragraph (3)(a), paragraph
46 (3)(b), or paragraph (3)(c), or subsection (4). Credit must be
47 allowed under paragraph (3)(a) or paragraph (3)(b) only for
48 cessions of those kinds or lines of business that the assuming
49 insurer is licensed, authorized, or otherwise permitted to write
50 or assume in its state of domicile or, in the case of a United
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51 States branch of an alien assuming insurer, in the state through
52 which it is entered and licensed or authorized to transact
53 insurance or reinsurance.
54 (3)
55 (c)1. Credit must be allowed when the reinsurance is ceded
56 to an assuming insurer that maintains a trust fund in a
57 qualified United States financial institution, as defined in
58 paragraph (6)(b) (5)(b), for the payment of the valid claims of
59 its United States ceding insurers and their assigns and
60 successors in interest. To enable the office to determine the
61 sufficiency of the trust fund, the assuming insurer shall report
62 annually to the office information substantially the same as
63 that required to be reported on the NAIC Annual Statement form
64 by authorized insurers. The assuming insurer shall submit to
65 examination of its books and records by the office and bear the
66 expense of examination.
67 2.a. Credit for reinsurance must not be granted under this
68 subsection unless the form of the trust and any amendments to
69 the trust have been approved by:
70 (I) The insurance regulator of the state in which the
71 trust is domiciled; or
72 (II) The insurance regulator of another state who,
73 pursuant to the terms of the trust instrument, has accepted
74 principal regulatory oversight of the trust.
75 b. The form of the trust and any trust amendments must be
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76 filed with the insurance regulator of every state in which the
77 ceding insurer beneficiaries of the trust are domiciled. The
78 trust instrument must provide that contested claims are valid
79 and enforceable upon the final order of any court of competent
80 jurisdiction in the United States. The trust must vest legal
81 title to its assets in its trustees for the benefit of the
82 assuming insurer's United States ceding insurers and their
83 assigns and successors in interest. The trust and the assuming
84 insurer are subject to examination as determined by the
85 insurance regulator.
86 c. The trust remains in effect for as long as the assuming
87 insurer has outstanding obligations due under the reinsurance
88 agreements subject to the trust. No later than February 28 of
89 each year, the trustee of the trust shall report to the
90 insurance regulator in writing the balance of the trust and list
91 the trust's investments at the preceding year end, and shall
92 certify that the trust will not expire prior to the following
93 December 31.
94 3. The following requirements apply to the following
95 categories of assuming insurer:
96 a. The trust fund for a single assuming insurer consists
97 of funds in trust in an amount not less than the assuming
98 insurer's liabilities attributable to reinsurance ceded by
99 United States ceding insurers, and, in addition, the assuming
100 insurer shall maintain a trusteed surplus of not less than $20
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101 million. Not less than 50 percent of the funds in the trust
102 covering the assuming insurer's liabilities attributable to
103 reinsurance ceded by United States ceding insurers and trusteed
104 surplus shall consist of assets of a quality substantially
105 similar to that required in part II of chapter 625. Clean,
106 irrevocable, unconditional, and evergreen letters of credit,
107 issued or confirmed by a qualified United States financial
108 institution, as defined in paragraph (6)(a) (5)(a), effective no
109 later than December 31 of the year for which the filing is made
110 and in the possession of the trust on or before the filing date
111 of its annual statement, may be used to fund the remainder of
112 the trust and trusteed surplus.
113 b.(I) In the case of a group including incorporated and
114 individual unincorporated underwriters:
115 (A) For reinsurance ceded under reinsurance agreements
116 with an inception, amendment, or renewal date on or after August
117 1, 1995, the trust consists of a trusteed account in an amount
118 not less than the group's several liabilities attributable to
119 business ceded by United States domiciled ceding insurers to any
120 member of the group;
121 (B) For reinsurance ceded under reinsurance agreements
122 with an inception date on or before July 31, 1995, and not
123 amended or renewed after that date, notwithstanding the other
124 provisions of this section, the trust consists of a trusteed
125 account in an amount not less than the group's several insurance
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126 and reinsurance liabilities attributable to business written in
127 the United States; and
128 (C) In addition to these trusts, the group shall maintain
129 in trust a trusteed surplus of which $100 million must be held
130 jointly for the benefit of the United States domiciled ceding
131 insurers of any member of the group for all years of account.
132 (II) The incorporated members of the group must not be
133 engaged in any business other than underwriting of a member of
134 the group, and are subject to the same level of regulation and
135 solvency control by the group's domiciliary regulator as the
136 unincorporated members.
137 (III) Within 90 days after its financial statements are
138 due to be filed with the group's domiciliary regulator, the
139 group shall provide to the insurance regulator an annual
140 certification by the group's domiciliary regulator of the
141 solvency of each underwriter member or, if a certification is
142 unavailable, financial statements, prepared by independent
143 public accountants, of each underwriter member of the group.
144 (e) If the reinsurance is ceded to an assuming insurer not
145 meeting the requirements of paragraph (a), paragraph (b),
146 paragraph (c), or paragraph (d), the office commissioner may
147 allow credit, but only if the assuming insurer holds surplus in
148 excess of $250 million and has a secure financial strength
149 rating from at least two statistical rating organizations deemed
150 acceptable by the office commissioner as having experience and
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151 expertise in rating insurers doing business in Florida,
152 including, but not limited to, Standard & Poor's, Moody's
153 Investors Service, Fitch Ratings, A.M. Best Company, and
154 Demotech. In determining whether credit should be allowed, the
155 office commissioner shall consider the following:
156 1. The domiciliary regulatory jurisdiction of the assuming
157 insurer.
158 2. The structure and authority of the domiciliary
159 regulator with regard to solvency regulation requirements and
160 the financial surveillance of the reinsurer.
161 3. The substance of financial and operating standards for
162 reinsurers in the domiciliary jurisdiction.
163 4. The form and substance of financial reports required to
164 be filed by the reinsurers in the domiciliary jurisdiction or
165 other public financial statements filed in accordance with
166 generally accepted accounting principles.
167 5. The domiciliary regulator's willingness to cooperate
168 with United States regulators in general and the office in
169 particular.
170 6. The history of performance by reinsurers in the
171 domiciliary jurisdiction.
172 7. Any documented evidence of substantial problems with
173 the enforcement of valid United States judgments in the
174 domiciliary jurisdiction.
175 8. Any other matters deemed relevant by the office
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176 commissioner. The office commissioner shall give appropriate
177 consideration to insurer group ratings that may have been
178 issued. The office commissioner may, in lieu of granting full
179 credit under this subsection, reduce the amount required to be
180 held in trust under paragraph (c).
181 (f) If the assuming insurer is not authorized or
182 accredited to transact insurance or reinsurance in this state
183 pursuant to paragraph (a) or paragraph (b), the credit permitted
184 by paragraph (c) or paragraph (d) must not be allowed unless the
185 assuming insurer agrees in the reinsurance agreements:
186 1.a. That in the event of the failure of the assuming
187 insurer to perform its obligations under the terms of the
188 reinsurance agreement, the assuming insurer, at the request of
189 the ceding insurer, shall submit to the jurisdiction of any
190 court of competent jurisdiction in any state of the United
191 States, will comply with all requirements necessary to give the
192 court jurisdiction, and will abide by the final decision of the
193 court or of any appellate court in the event of an appeal; and
194 b. To designate the Chief Financial Officer, pursuant to
195 s. 48.151, or a designated attorney as its true and lawful
196 attorney upon whom may be served any lawful process in any
197 action, suit, or proceeding instituted by or on behalf of the
198 ceding company.
199 2. This paragraph is not intended to conflict with or
200 override the obligation of the parties to a reinsurance
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201 agreement to arbitrate their disputes, if this obligation is
202 created in the agreement.
203 (4) Credit must be allowed when the reinsurance is ceded
204 to an assuming insurer meeting the requirements of this
205 subsection.
206 (a) The assuming insurer must be licensed in, and have its
207 head office in or be domiciled in, as applicable, a reciprocal
208 jurisdiction. As used in this subsection, the term "reciprocal
209 jurisdiction" means a jurisdiction that is any of the following:
210 1. A non-United States jurisdiction that is subject to an
211 in-force covered agreement with the United States, each within
212 its legal authority; or, in the case of a covered agreement
213 between the United States and the European Union, a jurisdiction
214 that is a member state of the European Union. As used in this
215 subsection, the term "covered agreement" means an agreement
216 entered into pursuant to the Dodd-Frank Wall Street Reform and
217 Consumer Protection Act, 31 U.S.C. ss. 313 and 314, which is
218 currently in effect or in a period of provisional application
219 and which addresses the elimination, under specified conditions,
220 of collateral requirements as a condition for entering into any
221 reinsurance agreement with a ceding insurer domiciled in this
222 state or for allowing the ceding insurer to recognize credit for
223 reinsurance.
224 2. A United States jurisdiction that meets the
225 requirements for accreditation under the Financial Regulation
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226 Standards and Accreditation Program of the National Association
227 of Insurance Commissioners.
228 3. A qualified jurisdiction, as determined by the office,
229 which is not otherwise described in subparagraph 1. or
230 subparagraph 2. and which meets all of the following additional
231 requirements, consistent with the terms and conditions of in-
232 force covered agreements, as specified by commission rule:
233 a. The jurisdiction allows an insurer domiciled, or having
234 its head office, in the jurisdiction to take credit for
235 reinsurance ceded to an insurer domiciled in the United States
236 in the same manner as reinsurance ceded to insurers domiciled in
237 that jurisdiction.
238 b. The jurisdiction does not require an assuming insurer
239 domiciled in the United States to establish or maintain a local
240 presence as a condition for entering into a reinsurance
241 agreement with any ceding insurer subject to regulation by the
242 jurisdiction or as a condition for allowing the ceding insurer
243 to take credit for the ceded risk.
244 c. The jurisdiction provides written confirmation that it
245 recognizes the state regulatory approach to group supervision
246 and group capital and that insurers and insurance groups
247 domiciled, or maintaining their headquarters, in a jurisdiction
248 accredited by the National Association of Insurance
249 Commissioners are subject only to worldwide prudential insurance
250 group supervision by the domiciliary state and are not subject
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251 to group supervision at the level of the worldwide parent
252 undertaking of the insurance or reinsurance group by the
253 qualified jurisdiction.
254 d. The jurisdiction provides written confirmation that
255 information regarding insurers and their parent, subsidiary, or
256 affiliated entities shall be provided to the office in
257 accordance with a memorandum of understanding or similar
258 document between the office and such qualified jurisdiction.
259
260 The office shall timely publish on its website a list of
261 reciprocal jurisdictions. The office may remove a reciprocal
262 jurisdiction determined to no longer meet the requirements of
263 this paragraph.
264 (b)1. The assuming insurer must have and maintain on an
265 ongoing basis minimum capital and surplus, or its equivalent,
266 calculated according to the methodology of its domiciliary
267 jurisdiction, in the amount of $250,000,000 or in a greater
268 amount specified by commission rule.
269 2. If the assuming insurer is an association, including
270 incorporated and individual unincorporated underwriters, it must
271 have and maintain on an ongoing basis:
272 a. Minimum capital and surplus equivalents, or net of
273 liabilities, calculated according to the methodology applicable
274 in its domiciliary jurisdiction, in the amount of $250,000,000
275 or in a greater amount specified by commission rule.
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276 b. A central fund containing a balance of $250,000,000 or
277 a greater amount specified by commission rule.
278 (c) If credit is allowed for reinsurance ceded to the
279 assuming insurer pursuant to:
280 1. Subparagraph (a)1., the assuming insurer must maintain
281 a minimum solvency or capital ratio specified in the applicable
282 covered agreement.
283 2. Subparagraph (a)2., the assuming insurer must maintain
284 a risk-based capital ratio of 300 percent of the authorized
285 control level, calculated in accordance with s. 624.4085.
286 3. Subparagraph (a)3., the assuming insurer must maintain
287 a solvency or capital ratio determined by the office to be an
288 effective measure of solvency.
289 (d) The assuming insurer must, in a form specified by the
290 commission:
291 1. Agree to provide prompt written notice and explanation
292 to the office if the assuming insurer falls below the minimum
293 requirements set forth in paragraph (b) or paragraph (c), or if
294 any regulatory action is taken against it for serious
295 noncompliance with applicable law of any jurisdiction.
296 2. Consent in writing to the jurisdiction of the courts of
297 this state and to the designation of the Chief Financial
298 Officer, pursuant to s. 48.151, as its true and lawful attorney
299 upon whom may be served any lawful process in any action, suit,
300 or proceeding instituted by or on behalf of the ceding insurer.
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301 This subparagraph does not limit or alter in any way the
302 capacity of parties to a reinsurance agreement to agree to an
303 alternative dispute resolution mechanism, except to the extent
304 that such agreement is unenforceable under applicable insolvency
305 or delinquency laws.
306 3. Consent in writing to pay all final judgments, wherever
307 enforcement is sought, obtained by a ceding insurer or its legal
308 successor which have been declared enforceable in the
309 jurisdiction where the judgment was obtained.
310 4. Confirm in writing that it will include in each
311 reinsurance agreement a provision requiring the assuming insurer
312 to provide security in an amount equal to 100 percent of the
313 assuming insurer's liabilities attributable to reinsurance ceded
314 pursuant to that agreement, if the assuming insurer resists
315 enforcement of a final judgment that is enforceable under the
316 law of the jurisdiction in which it was obtained or enforcement
317 of a properly enforceable arbitration award, whether obtained by
318 the ceding insurer or by its legal successor on behalf of its
319 resolution estate.
320 5. Confirm in writing that it is not presently
321 participating in any solvent scheme of arrangement which
322 involves this state's ceding insurers, and agree to notify the
323 ceding insurer and the office and to provide security in an
324 amount equal to 100 percent of the assuming insurer's
325 liabilities to the ceding insurer if the assuming insurer enters
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326 into such a solvent scheme of arrangement. Such security must be
327 consistent with subsection (5) or as specified by commission
328 rule.
329 (e) If requested by the office, the assuming insurer or
330 its legal successor must provide, on behalf of itself and any
331 legal predecessors, the following additional documentation:
332 1. The assuming insurer's annual audited financial
333 statements, for the 2-year period before entering into the
334 reinsurance agreement and on an annual basis thereafter, in
335 accordance with the applicable law of the jurisdiction of its
336 head office or domiciliary jurisdiction, as applicable,
337 including the external audit report.
338 2. The solvency and financial condition report or
339 actuarial opinion, if filed with the assuming insurer's
340 supervisor, for the 2-year period before entering into the
341 reinsurance agreement.
342 3. Before entering into the reinsurance agreement and not
343 more than semiannually thereafter, an updated list of all
344 disputed and overdue reinsurance claims outstanding for 90 days
345 or more regarding reinsurance assumed from ceding insurers
346 domiciled in the United States.
347 4. Before entering into the reinsurance agreement and not
348 more than semiannually thereafter, information regarding the
349 assuming insurer's assumed reinsurance by ceding insurer, ceded
350 reinsurance by the assuming insurer, and reinsurance recoverable
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351 on paid and unpaid losses by the assuming insurer.
352 5. Additional information as reasonably required by the
353 office.
354 (f) The assuming insurer must maintain a practice of
355 prompt payment of claims under reinsurance agreements and must
356 report to the office reinsurance recoverables that are more than
357 90 days overdue or that are in dispute, as specified by
358 commission rule.
359 (g) The assuming insurer must annually provide to the
360 office confirmation from its reciprocal jurisdiction, on a form
361 adopted by the commission or as otherwise specified by
362 commission rule, that, as of the preceding December 31 or as of
363 the annual date otherwise statutorily reported to the reciprocal
364 jurisdiction, the assuming insurer complied with the
365 requirements of paragraphs (b) and (c).
366 (h) This subsection does not preclude an assuming insurer
367 from providing the office with information on a voluntary basis.
368 (i) If subject to a legal process of rehabilitation,
369 liquidation, or conservation, as applicable, the ceding insurer
370 or its representative may seek and, if determined appropriate by
371 the court in which the proceedings are pending, obtain an order
372 requiring that the assuming insurer post security for all
373 outstanding ceded liabilities.
374 (j) This subsection does not limit or alter in any way the
375 capacity of parties to a reinsurance agreement to agree on
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376 requirements for security or other terms in the reinsurance
377 agreement, except as expressly prohibited by this section or
378 other applicable law or commission rule.
379 (k)1. Credit may be taken under this subsection only for
380 reinsurance agreements entered into, amended, or renewed on or
381 after the date on which the assuming insurer has satisfied the
382 requirements to assume reinsurance under this subsection, and
383 only with respect to losses incurred and reserves reported on or
384 after the later of the date on which the assuming insurer has
385 met all eligibility requirements pursuant to this subsection or
386 the effective date of the new reinsurance agreement, amendment,
387 or renewal.
388 2. This paragraph does not alter or impair a ceding
389 insurer's right to take credit for reinsurance for which, and to
390 the extent that, credit is not available under this subsection,
391 if the reinsurance qualifies for credit under any other
392 applicable provision of law or commission rule.
393 3. This subsection does not authorize an assuming insurer
394 to withdraw or reduce the security provided under any
395 reinsurance agreement, except as authorized by the terms of the
396 agreement.
397 4. This subsection does not limit or alter in any way the
398 capacity of parties to any reinsurance agreement to renegotiate
399 the agreement.
400 (l) The office shall timely publish on its website a list
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401 of assuming insurers that meet all of the requirements of this
402 subsection.
403 (m) If the office determines that an assuming insurer no
404 longer meets one or more of the requirements of this subsection,
405 the office may revoke or suspend the eligibility of the assuming
406 insurer for recognition under this subsection.
407 1. During the suspension of an assuming insurer's
408 eligibility, a reinsurance agreement issued, amended, or renewed
409 after the effective date of the suspension does not qualify for
410 credit, except to the extent that the assuming insurer's
411 obligations under the contract are secured in accordance with
412 subsection (5).
413 2. If an assuming insurer's eligibility is revoked, a
414 credit for reinsurance may not be granted after the effective
415 date of the revocation with respect to any reinsurance agreement
416 entered into by the assuming insurer, including a reinsurance
417 agreement entered into before the date of revocation, except to
418 the extent that the assuming insurer's obligations under the
419 contract are secured in a form acceptable to the office and
420 consistent with subsection (5).
421 (5)(4) An asset allowed or a reduction deduction from
422 liability taken for the reinsurance ceded by an insurer to an
423 assuming insurer not meeting the requirements of subsections
424 (2), and (3), and (4) is allowed in an amount not exceeding the
425 liabilities carried by the ceding insurer. The reduction
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426 deduction must be in the amount of funds held by or on behalf of
427 the ceding insurer, including funds held in trust for the ceding
428 insurer, under a reinsurance contract with the assuming insurer
429 as security for the payment of obligations thereunder, if the
430 security is held in the United States subject to withdrawal
431 solely by, and under the exclusive control of, the ceding
432 insurer, or, in the case of a trust, held in a qualified United
433 States financial institution, as defined in paragraph (6)(b)
434 (5)(b). This security may be in the form of:
435 (a) Cash in United States dollars;
436 (b) Securities listed by the Securities Valuation Office
437 of the National Association of Insurance Commissioners and
438 qualifying as admitted assets pursuant to part II of chapter
439 625;
440 (c) Clean, irrevocable, unconditional letters of credit,
441 issued or confirmed by a qualified United States financial
442 institution, as defined in paragraph (6)(a) (5)(a), effective no
443 later than December 31 of the year for which the filing is made,
444 and in the possession of, or in trust for, the ceding company on
445 or before the filing date of its annual statement; or
446 (d) Any other form of security acceptable to the office.
447 (6)(a)(5)(a) For purposes of paragraph (5)(c) (4)(c)
448 regarding letters of credit, a "qualified United States
449 financial institution" means an institution that:
450 1. Is organized or, in the case of a United States office
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451 of a foreign banking organization, is licensed under the laws of
452 the United States or any state thereof;
453 2. Is regulated, supervised, and examined by United States
454 or state authorities having regulatory authority over banks and
455 trust companies; and
456 3. Has been determined by either the office or the
457 Securities Valuation Office of the National Association of
458 Insurance Commissioners to meet such standards of financial
459 condition and standing as are considered necessary and
460 appropriate to regulate the quality of financial institutions
461 whose letters of credit will be acceptable to the office.
462 (12)(11)
463 (b) The summary statement must be signed and attested to
464 by either the chief executive officer or the chief financial
465 officer of the reporting insurer. In addition to the summary
466 statement, the office may require the filing of any supporting
467 information relating to the ceding of such risks as it deems
468 necessary. If the summary statement prepared by the ceding
469 insurer discloses that the net effect of a reinsurance treaty or
470 treaties (or series of treaties with one or more affiliated
471 reinsurers entered into for the purpose of avoiding the
472 following threshold amount) at any time results in an increase
473 of more than 25 percent to the insurer's surplus as to
474 policyholders, then the insurer shall certify in writing to the
475 office that the relevant reinsurance treaty or treaties comply
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476 with the accounting requirements contained in any rule adopted
477 by the commission under subsection (15) (14). If such
478 certificate is filed after the summary statement of such
479 reinsurance treaty or treaties, the insurer shall refile the
480 summary statement with the certificate. In any event, the
481 certificate must state that a copy of the certificate was sent
482 to the reinsurer under the reinsurance treaty.
483 Section 2. This act shall take effect July 1, 2021.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 735 Preemption of Local Occupational Licensing
SPONSOR(S): Harding
TIED BILLS: IDEN./SIM. BILLS: SB 268
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 13 Y, 4 N Wright Anstead
2) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
The Florida Constitution grants local governments broad home rule authority. Non-charter county governments
may exercise those powers of self-government that are provided by general or special law. 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. Likewise, municipalities have 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.
General law directs a number of state agencies and licensing boards to regulate many professions and
occupations. General law can also authorize or preempt local regulation of professions and occupations, which
is typically done specifically and individually by subject matter, business type, or occupation.
The bill expressly preempts the licensing of occupations to the state and supersedes any local government
licensing of occupations. However, any licensing of occupations adopted prior to July 1, 2021, will continue to
be effective until July 1, 2023, at which time it will expire. Any licensing of occupations authorized by general
law is exempt from the preemption.
The bill specifically prohibits local governments from requiring a license for a person whose job scope does not
substantially correspond to that of a contractor or journeyman licensed by the Construction Industry Licensing
Board, and specifically precludes local governments from requiring a license for: painting, flooring, cabinetry,
interior remodeling, handyman services, driveway or tennis court installation, decorative stone, tile, marble,
granite, or terrazzo installation, plastering, stuccoing, caulking, canvas awning installation, and ornamental iron
installation.
The bill also expressly authorizes counties and municipalities to issue journeyman licenses in the plumbing,
pipe fitting, mechanical and HVAC trades, as well as, the electrical and alarm system trades, which is the
current practice by counties and municipalities.
The bill does not appear to have a fiscal impact on state or local governments.
The bill has an effective date of July 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:
Present Situation
Local Government Authority
The Florida Constitution grants local governments broad home rule authority. 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, municipalities3 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
A "special district" is a unit of local government created for a particular purpose, with jurisdiction to
operate within a limited geographic boundary. Special districts are created by general law,5 special act,6
local ordinance,7 or by rule of the Governor and Cabinet.8 A special district has only those powers
expressly provided by, or reasonably implied from, the authority provided in the district’s charter.
Special districts provide specific municipal services in addition to, or in place of, those provided by a
municipality or county.9
A “dependent special district” is a special district where the membership of the governing body is
identical to the governing body of a single county or municipality, all members of the governing body
are appointed by the governing body of a single county or municipality, members of the district’s
governing body are removable at will by the governing body of a single county or municipality, or the
district’s budget is subject to the approval of the governing body of a single county or municipality.10 An
“independent special district” is any district that is not a dependent special district.11
Revenue Sources Authorized in the Florida Constitution12
The Florida Constitution limits the ability of local governments to raise revenue for their operations. The
Florida Constitution provides:
No tax shall be levied except in pursuance of law. No state ad valorem taxes13
shall be levied upon real estate or tangible personal property. All other forms of
taxation shall be preempted to the state except as provided by general law.14
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. 189.031(3), F.S.
6 Id.
7 S. 189.02(1), F.S.
8 S. 190.005(1), F.S. See, generally, s. 189.012(6), F.S.
9 2018 – 2020 Local Gov’t Formation Manual, p. 62,
https://myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType=Committees&CommitteeId=3025&Session=2019&Doc
umentType=General%20Publications&FileName=2018-2020%20Local%20Government%20Formation%20Manual%20Final.pdf (last
visited Dec 19, 2019).
10 S. 189.012(2), F.S.
11 S. 189.012(3), F.S.
12 The Florida Legislature, Office of Economic and Demographic Research, 2019 Local Government Financial Information Handbook, p.
1, http://edr.state.fl.us/Content/local-government/reports/lgfih19.pdf.
13 “Ad valorem tax” means a tax based upon the assessed value of property.” Section 192.001(1), F.S.
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Counties, school districts, and municipalities shall, and special districts may, be
authorized by law to levy ad valorem taxes and may be authorized by general
law to levy other taxes, for their respective purposes, except ad valorem taxes on
intangible personal property and taxes prohibited by this constitution.15
However, not all local government revenue sources are taxes requiring general law authorization.
When a county or municipal revenue source is imposed by ordinance, the question is whether the
charge is a valid assessment or fee. As long as the charge is not deemed a tax, the imposition of the
assessment or fee by ordinance is within the constitutional and statutory home rule powers of county
and municipal governments. If the charge is not a valid assessment or fee, it is deemed a revenue
source requiring general law authorization.
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.16
Preemption
State preemption precludes a local government from exercising authority in a particular area, and
requires consistency with the state constitution or state statute.17 A local government enactment may
be found inconsistent with state law if (1) the Legislature has preempted a particular subject area to the
state or (2) the local regulation conflicts with a state statute.18
Florida law recognizes two types of preemption: express and implied. Express preemption requires a
specific legislative statement; it cannot be implied or inferred.19 Express preemption of a field by the
Legislature must be accomplished by clear language stating that intent.20 When local ordinances have
been enacted in the face of state preemption, the effect has been to find such ordinances null and
void.21
Implied preemption is a legal doctrine created to address those situations in which the courts may have
been concerned by the legislature’s failure to expressly preempt areas which, for all intents and
purposes, seemed dominated by the state. Findings of implied preemption are for a very narrow class
of areas in which the state has legislated pervasively.22
Professions and Occupations
General law directs a number of state agencies and licensing boards to regulate certain professions
and occupations. For example, the Department of Business and Professional Regulation (DBPR)
currently regulates approximately 25 professions and occupations.23
14 Art. VII, s. 1(a), Fla. Const.
15 Art. VII, s. 9(a), Fla. Const.
16 EDR, supra note 12, at 9.
17 James R. Wolf and Sarah Harley Bolinder, The Effectiveness of Home Rule: A Preemption and Conflict Analysis, 83 Fla. B.J. 92
(June 2009), available at https://www.floridabar.org/the-florida-bar-journal/the-effectiveness-of-home-rule-a-preemption-and-conflict-
analysis/.
18 Id.
19 See City of Hollywood v. Mulligan, 934 So. 2d 1238, 1243 (Fla. 2006); Phantom of Clearwater, Inc. v. Pinellas County, 894 So. 2d
1011, 1018 (Fla. 2d DCA 2005), approved in Phantom of Brevard, Inc. v. Brevard County, 3 So. 3d 309 (Fla. 2008).
20 Mulligan, 934 So. 2d at 1243.
21 See, e.g., Nat’l Rifle Ass’n of Am., Inc. v. City of S. Miami, 812 So.2d 504 (Fla. 3d DCA 2002).
22 Wolf and Bolinder, supra note 17.
23 S. 20.165, F.S.
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General law determines whether local governments are able to regulate occupations and businesses,
and to what degree.24 If state law preempts regulation for an occupation, then, generally, local
governments may not regulate that occupation.25 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 worker’s compensation insurance coverage by a contractor; 26
assessing local fees and rules regarding low-voltage alarm system projects;27
tobacco and nicotine products;28
firearms, weapons, and ammunition;29
employment benefits;30
polystyrene products;31
public lodging establishments and public food service establishments;32 and
disposable plastic bags.33
Conversely, Florida law also specifically grants local jurisdictions the right to regulate businesses,
occupations and professions in certain circumstances.34 For example, Florida law specifically
authorizes regulations relating to:
zoning and land use;
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”;35
the levy of local business taxes;36
building code inspection fees;37
tattoo establishments;38
massage practices;39
child care facilities;40
taxis and other vehicles for hire;41 and
waste and sewage collection.42
Construction Professional Licenses
Chapter 489, F.S., relates to “contracting,” with part I addressing the licensure and regulation of
construction contracting, and part II addressing the licensure and regulation of electrical and alarm
system contracting.
Construction contractors are either certified or registered by the Construction Industry Licensing Board
(CILB) housed within DBPR. The CILB consists of 18 members who are appointed by the Governor
24 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.
25 Id.; Wolf and Bolinger, supra note 17.
26 S. 553.80(7)(d), F.S.
27 S. 489.503(14), F.S.
28 Ch. 569, F.S., and s. 386.209, F.S.
29 S. 790.33(1), F.S.
30 S. 218.077, F.S.
31 S. 500.90, F.S.
32 S. 509.032, F.S.
33 S. 403.7033, F.S.
34 Supra note 25.
35 S. 166.221, F.S.
36 Ch. 205, F.S.
37 S. 166.222, F.S.
38 S. 381.00791, F.S.
39 S. 480.052, F.S.
40 S. 402.306, F.S
41 S. 125.01(1)(n), F.S.
42 S. 125.01(1)(k), F.S.
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and confirmed by the Senate. The CILB meets to approve or deny applications for licensure, review
disciplinary cases, and conduct informal hearings relating to discipline.43
"Certified contractors" are individuals who pass the state competency examination and obtain a
certificate of competency issued by DBPR. Certified contractors are able to obtain a certificate of
competency for a specific license category and are permitted to practice in that category in any
jurisdiction in the state.44
“Certified specialty contractors” are contractors whose scope of work is limited to a particular phase of
construction, such as drywall or demolition. Certified specialty contractor licenses are created by the
CILB through rulemaking. Certified specialty contractors are permitted to practice in any jurisdiction in
the state.
“Registered contractors” are individuals that have taken and passed a local competency examination
and can practice the specific category of contracting for which he or she is approved, only in the local
jurisdiction for which the license is issued.45
The CILB licenses the following types of contractors:46
Statutory Licenses Specialty Licenses
Air Conditioning- Classes A, B, and C Drywall
Building Demolition
General Gas Line
Internal Pollutant Storage Tank Lining Glass and Glazing
Applicator Industrial Facilities
Mechanical Irrigation
Plumbing Marine
Pollutant Storage Systems Residential Pool/Spa Servicing
Pool/Spa- Classes A, B, and C Solar Water Heating
Precision Tank Tester Structure
Residential Swimming Pool Decking
Roofing Swimming Pool Excavation
Sheet Metal Swimming Pool Finishes
Solar Swimming Pool Layout
Underground Excavation Swimming Pool Piping
Swimming Pool Structural
Swimming Pool Trim
Tower
Current law provides that local jurisdictions may approve or deny applications for licensure as a
registered contractor, review disciplinary cases, and conduct informal hearings relating to discipline of
registered contractors licensed in their jurisdiction.47 Local jurisdictions are not barred from issuing and
requiring construction licenses that are outside the scope of practice for a certified contractor or
certified specialty contractor, such as painting and fence erection licenses. Local governments may
only collect licensing fees that cover the cost of regulation.48
Locally registered contractors that are required to hold a contracting license to practice their profession
in accordance with state law must register with DBPR after obtaining a local license. However, persons
43 S. 489.107, F.S.
44 S. 489.105, F.S.
45 S. 489.103, F.S.
46 S. 489.105(a)-(q), F.S.; Rr. 61G4-15.015-040, F.A.C.
47 Ss. 489.117, 489.131 F.S.
48 EDR, supra note 12, at 9.
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holding a local construction license whose job scope does not substantially correspond to the job scope
of a certified contractor or a certified specialty contractor are not required to register with DBPR. 49
Electrical contractors, alarm system contractors, and electrical specialty contractors are certified or
registered under the ECLB. Certified contractors can practice statewide and are licensed and regulated
by ECLB. Registered contractors are licensed and regulated by a local jurisdiction and may only
practice within that locality.50
Electrical contractors are contractors who have the ability to work on electrical wiring, fixtures,
appliances, apparatus, raceways, and conduits which generate, transmit, transform, or utilize electrical
energy in any form. The scope of an electrical contractor’s license includes alarm system work.51
Alarm system contractors are contractors who are able to lay out, fabricate, install, maintain, alter,
repair, monitor, inspect, replace, or service alarm systems. An “alarm system” is defined as “any
electrical device, signaling device, or combination of electrical devices used to signal or detect a
burglary, fire, robbery, or medical emergency.”52
Electrical certified specialty contractors are contractors whose scope of work is limited to a particular
phase of electrical contracting, such as electrical signs. The ECLB creates electrical certified specialty
contractor licenses through rulemaking. Certified electrical specialty contractors can practice statewide.
The ECLB has created the following certified specialty contractor licenses:
Lighting maintenance specialty contractor;
Sign specialty electrical contractor;
Residential electrical contractor;
Limited energy systems specialty contractor; and
Utility line electrical contractor.53
Journeyman
A journeyman is a skilled worker in a building trade or craft. There is no state requirement for licensure
as a journeyman, but the construction and electrical contractor practice acts account for the fact that
counties and municipalities issue journeyman licenses. A person with a journeyman license must
always work under the supervision of a licensed contractor, but the state does not regulate journeymen
activities or issue journeymen licenses.54
However, ch. 489, F.S., allows tradesman to be licensed as a journeyman in one local jurisdiction and
work in multiple jurisdictions without having to take another examination or pay an additional licensing
fee to qualify to work in the other jurisdictions (county or municipality). Specifically, s. 489.1455(1) of
part I, F.S., specifies:
An individual who holds a valid, active journeyman license in the plumbing/pipe fitting,
mechanical, or HVAC trades issued by any county or municipality in this state may work as a
journeyman in the trade in which he or she is licensed in any county or municipality of this state
without taking an additional examination or paying an additional license fee.
The statutory criteria for licensure reciprocity between local jurisdictions for journeymen include:55
scoring at least 75 percent on an approved proctored examination for that construction trade;
completing a registered apprenticeship program and demonstrating verifiable practical
experience in the particular trade;
completing coursework approved by the Florida Building Commission specific to the discipline;
and
49 Ss. 489.105, & 489.117(4), F.S.
50 See generally s. 489.505, F.S.
51 Ss. 489.505(12), & 489.537(7), F.S.
52 S. 489.505(1)-(2), F.S.
53 S. 489.505(19), & 489.511(4), F.S; Rule 61G6-7.001, F.A.C.
54 Ss. 489.103, 489.1455, 489.503, & 489.5335, F.S.
55 S. 489.1455, F.S. A similar reciprocity option applies to journeyman in the electrical trades. S. 489.5335, F.S.
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not having a license suspended or revoked within the last 5 years.
Effect of the Bill
The bill defines the following terms:
“Local government” means a county, municipality, special district, or political subdivision of the
state.
“Occupation” means a paid job, profession, work, line of work, trade, employment, position,
post, career, field, vocation, or craft.
"Licensing" means any training, education, test, certification, registration, or license that is
required for a person to perform an occupation along with any associated fee.
The bill expressly preempts occupational licensing to the state. This preemption supersedes any local
government licensing requirement of occupations unless:
the licensing of occupations by local governments is authorized by general law; or
the local licensing scheme for an occupation was imposed before July 1, 2021. However, any
such local licensing scheme expires on July 1, 2023.
The bill prohibits local governments that license an occupation that qualifies for the exemption until July
1, 2023, from imposing additional licensing requirements on that occupation and from modifying such
licensing.
The bill provides that any local licensing of an occupation not authorized under the provisions of the bill
or otherwise authorized by general law does not apply and may not be enforced.
The bill provides that the preemption applies to licensing that is outside the scope of state contractor
licensing provisions. Specifically, it provides that a county or municipality may not require a license for a
person whose job scope does not substantially correspond to a contractor category licensed by the
CILB. The bill specifically precludes counties and municipalities from requiring a license for certain job
scopes, including, but not limited to, painting, flooring, cabinetry, interior remodeling, handyman
services, driveway or tennis court installation, decorative stone, tile, marble, granite, or terrazzo
installation, plastering, stuccoing, caulking, canvas awning installation, and ornamental iron installation.
The bill also expressly authorizes counties and municipalities to issue journeyman licenses in the
plumbing, pipe fitting, mechanical and HVAC trades, as well as, the electrical and alarm system trades,
which is the current practice by counties and municipalities. The licensing of those specific local
journeyman is exempt from the preemption in the bill.
B. SECTION DIRECTORY:
Section 1 Creates s. 163.21, F.S., relating to licensing of occupations preempted to the state.
Section 2 Amends s. 489.117, F.S., relating to registration; specialty contractors.
Section 3 Amends s. 489.1455, F.S., relating to journeyman; reciprocity; standards.
Section 4 Amends s. 489.5335, F.S., relating to journeyman; reciprocity; standards.
Section 5 Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
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1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill will have an indeterminate positive impact on the private sector. Workers may have to pay less
in licensing and examination fees in some local jurisdictions. There may be an increase in the number
of people in the workforce practicing their chosen professions.
D. FISCAL COMMENTS:
The fiscal impact of the bill on local governments is indeterminate.
III. 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:
The bill neither authorizes nor requires administrative rulemaking by executive branch agencies.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 735 2021
1 A bill to be entitled
2 An act relating to preemption of local occupational
3 licensing; creating s. 163.211, F.S.; providing
4 definitions; preempting licensing of occupations to
5 the state; providing exceptions; prohibiting local
6 governments from imposing additional licensing
7 requirements or modifying licensing unless specified
8 conditions are met; specifying that certain local
9 licensing that does not meet specified criteria does
10 not apply and may not be enforced; amending s.
11 489.117, F.S.; specifying that certain specialty
12 contractors are not required to register with the
13 Construction Industry Licensing Board; prohibiting
14 local governments from requiring certain specialty
15 contractors to obtain a license under specified
16 circumstances; specifying job scopes for which a local
17 government may not require a license; amending ss.
18 489.1455 and 489.5335, F.S.; authorizing counties and
19 municipalities to issue certain journeyman licenses;
20 providing an effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Section 163.211, Florida Statutes, is created
25 to read:
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26 163.211 Licensing of occupations preempted to state.—
27 (1) DEFINITIONS.-As used in this section:
28 (a) "Licensing" means any training, education, test,
29 certification, registration, or license that is required for a
30 person to perform an occupation in addition to any associated
31 fee.
32 (b) "Local government" means a county, municipality,
33 special district, or political subdivision of the state.
34 (c) "Occupation" means a paid job, profession, work, line
35 of work, trade, employment, position, post, career, field,
36 vocation, or craft.
37 (2) PREEMPTION OF OCCUPATIONAL LICENSING TO THE STATE.-The
38 licensing of occupations is expressly preempted to the state and
39 this section supersedes any local government licensing
40 requirement of occupations with the exception of the following:
41 (a) Any local government that imposed licenses on
42 occupations before January 1, 2021. However, any such local
43 government licensing of occupations expires on July 1, 2023.
44 (b) Any local government licensing of occupations
45 authorized by general law.
46 (3) EXISTING LICENSING LIMIT.-A local government that
47 licenses occupations and retains such licensing as set forth in
48 paragraph (2)(a) may not impose additional licensing
49 requirements on that occupation or modify such licensing.
50 (4) LOCAL LICENSING NOT AUTHORIZED.—Local licensing of an
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51 occupation that is not authorized under this section or
52 otherwise authorized by general law does not apply and may not
53 be enforced.
54 Section 2. Paragraph (a) of subsection (4) of section
55 489.117, Florida Statutes, is amended to read:
56 489.117 Registration; specialty contractors.—
57 (4)(a) A person holding a local license whose job scope
58 does not substantially correspond to either the job scope of one
59 of the contractor categories defined in s. 489.105(3)(a)-(o), or
60 the job scope of one of the certified specialty contractor
61 categories established by board rule, is not required to
62 register with the board to perform contracting activities within
63 the scope of such specialty license. A local government, as
64 defined in s. 163.211, may not require a person to obtain a
65 license for a job scope which does not substantially correspond
66 to the job scope of one of the contractor categories defined in
67 s. 489.105(3)(a)-(o) and (q) or authorized in s. 489.1455(1).
68 For purposes of this section, job scopes for which a local
69 government may not require a license include, but are not
70 limited to, painting; flooring; cabinetry; interior remodeling;
71 driveway or tennis court installation; handyman services;
72 decorative stone, tile, marble, granite, or terrazzo
73 installation; plastering; stuccoing; caulking; and canvas awning
74 and ornamental iron installation.
75 Section 3. Section 489.1455, Florida Statutes, is amended
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76 to read:
77 489.1455 Journeyman; reciprocity; standards.—
78 (1) Counties and municipalities are authorized to issue
79 journeyman licenses in the plumbing, pipe fitting, mechanical,
80 or HVAC trades.
81 (2)(1) An individual who holds a valid, active journeyman
82 license in the plumbing, pipe fitting plumbing/pipe fitting,
83 mechanical, or HVAC trades issued by any county or municipality
84 in this state may work as a journeyman in the trade in which he
85 or she is licensed in any county or municipality of this state
86 without taking an additional examination or paying an additional
87 license fee, if he or she:
88 (a) Has scored at least 70 percent, or after October 1,
89 1997, at least 75 percent, on a proctored journeyman Block and
90 Associates examination or other proctored examination approved
91 by the board for the trade in which he or she is licensed;
92 (b) Has completed an apprenticeship program registered
93 with a registration agency defined in 29 C.F.R. s. 29.2 and
94 demonstrates 4 years' verifiable practical experience in the
95 trade for which he or she is licensed, or demonstrates 6 years'
96 verifiable practical experience in the trade for which he or she
97 is licensed;
98 (c) Has satisfactorily completed specialized and advanced
99 module coursework approved by the Florida Building Commission,
100 as part of the building code training program established in s.
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101 553.841, specific to the discipline or, pursuant to
102 authorization by the certifying authority, provides proof of
103 completion of such coursework within 6 months after such
104 certification; and
105 (d) Has not had a license suspended or revoked within the
106 last 5 years.
107 (3)(2) A local government may charge a registration fee
108 for reciprocity, not to exceed $25.
109 Section 4. Section 489.5335, Florida Statutes, is amended
110 to read:
111 489.5335 Journeyman; reciprocity; standards.—
112 (1) Counties and municipalities are authorized to issue
113 journeyman licenses in the electrical and alarm system trades.
114 (2)(1) An individual who holds a valid, active journeyman
115 license in the electrical or alarm system trade issued by any
116 county or municipality in this state may work as a journeyman in
117 the trade in which he or she is licensed in any other county or
118 municipality of this state without taking an additional
119 examination or paying an additional license fee, if he or she:
120 (a) Has scored at least 70 percent, or after October 1,
121 1997, at least 75 percent, on a proctored journeyman Block and
122 Associates examination or other proctored examination approved
123 by the board for the electrical trade in which he or she is
124 licensed;
125 (b) Has completed an apprenticeship program registered
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126 with a registration agency defined in 29 C.F.R. s. 29.2 and
127 demonstrates 4 years' verifiable practical experience in the
128 electrical trade for which he or she is licensed, or
129 demonstrates 6 years' verifiable practical experience in the
130 electrical trade for which he or she is licensed;
131 (c) Has satisfactorily completed specialized and advanced
132 module coursework approved by the Florida Building Commission,
133 as part of the building code training program established in s.
134 553.841, specific to the discipline, or, pursuant to
135 authorization by the certifying authority, provides proof of
136 completion of such curriculum or coursework within 6 months
137 after such certification; and
138 (d) Has not had a license suspended or revoked within the
139 last 5 years.
140 (3)(2) A local government may charge a registration fee
141 for reciprocity, not to exceed $25.
142 Section 5. This act shall take effect July 1, 2021.
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HB 797
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 797 Florida Life and Health Insurance Guaranty Association
SPONSOR(S): Robinson, W.
TIED BILLS: IDEN./SIM. BILLS: SB 1470
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N Hinshelwood Luczynski
2) State Administration & Technology 14 Y, 0 N Lee Topp
Appropriations Subcommittee
3) Commerce Committee Hinshelwood Hamon
SUMMARY ANALYSIS
An insurance guaranty association ensures that policyholders’ paid insurance premiums are protected and
outstanding claims are settled, up to limits provided by law, if their insurer is liquidated. The Florida Life and
Health Insurance Guaranty Association (FLAHIGA) is the guaranty association for most insurance companies
that write life and health insurance or annuities in Florida. The bill makes the following changes to conform to
the Life and Health Insurance Guaranty Association Model Act:
Adds a definition for the term “Moody’s Corporate Bond Yield Average”.
Amends the definition of “person” to include “limited liability company” and “governmental body or
entity”.
Clarifies that, in dealing with an impaired domestic insurer, the FLAHIGA may assume or reissue
covered policies, in addition to guaranteeing and reinsuring the policies.
Expressly provides that the FLAHIGA has the right to appear or intervene before a court or agency in
another state.
Provides that, for purposes of the FLAHIGA’s standing to appear before any court in this state, the
FLAHIGA’s powers and duties include reissuing or modifying covered policies.
Provides that the FLAHIGA may recover payment of improper claims.
Clarifies that the FLAHIGA has the authority to join an organization of other state guaranty associations
to further the purposes and to carry out the powers and duties of the FLAHIGA.
As to Class A assessments, which pay the FLAHIGA’s general administrative expenses, removes the
cap of $250, permits the assessments to be made on a pro rata basis, and allows the FLAHIGA’s board
to credit the assessments against future assessments related to insurer insolvencies.
Provides that, if an insurer’s assessment is deferred because the assessment would endanger the
insurer’s financial solvency, the insurer must pay the assessment once it regains financial strength.
Removes the reduced assessment cap for nonprofit annuity insurers that issue policies to educational
groups, thus making such insurers subject to the assessment cap for all other annuity insurers.
Directs that the FLAHIGA establish a procedure for removing a board member if that member becomes
impaired or insolvent and establish a policy and procedure to address conflicts of interest.
The bill has no fiscal impact on state or local governments and an indeterminate impact on the private sector.
The bill provides an effective date of July 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
Insurer Insolvency
States primarily regulate insurance companies, and the state of domicile serves as the primary
regulator for insurers. In Florida, the Office of Insurance Regulation (OIR) licenses and regulates the
activities of insurers and other risk-bearing entities.1 The OIR monitors the solvency of insurers,
examines insurers, and takes administrative action, if necessary.
Chapter 631, F.S., relating to insurer insolvency and guaranty payments, governs the receivership
process for insurance companies in Florida. Federal law specifies that insurance companies cannot file
for bankruptcy.2 Instead, they are either “rehabilitated” or “liquidated” by the state. In Florida, the
Division of Rehabilitation and Liquidation of the Department of Financial Services (DFS) is responsible
for rehabilitating or liquidating insurance companies.3
Florida operates five insurance guaranty funds and associations4 to ensure that policyholders of
liquidated insurers are protected with respect to insurance premiums paid and settlement of
outstanding claims, up to limits provided by law.5 A guaranty association generally is a not-for-profit
corporation created by law and is directed to protect policyholders from financial losses and delays in
claims payments and settlements due to the insolvency of an insurance company. A guaranty
association accomplishes its mission by assuming responsibility for settling claims and refunding
unearned premiums6 to policyholders. Insurers are required by law to participate in guaranty
associations as a condition of transacting business in Florida.
The bill makes changes to one of the five guaranty funds and associations – the Florida Life and Health
Insurance Guaranty Association (FLAHIGA), which is the guaranty association for most health and life
insurers.
1 S. 20.121(3), F.S.
2 The Bankruptcy Code expressly provides that "a domestic insurance company" may not be the subject of a federal
bankruptcy proceeding. 11 U.S.C. s. 109(b)(2). The exclusion of insurers from the federal bankruptcy court process is
consistent with federal policy generally allowing states to regulate the business of insurance. See 15 U.S.C. ss. 1011-
1012.
3 Typically, insurers are put into liquidation when the company is insolvent whereas insurers are put into rehabilitation for
numerous reasons, one of which is an unsound financial condition. The goal of rehabilitation is to return the insurer to a
sound financial condition. The goal of liquidation, however, is to dissolve the insurer. See s. 631.051, F.S., for the grounds
for rehabilitation and s. 631.061, F.S., for the grounds for liquidation.
4 The FLAHIGA (ss. 631.711 – 631.738, F.S.) generally is responsible for claims settlement and premium refunds for
health and life insurers who are insolvent. The HMOCAP (ss. 631.811 – 631.828, F.S.) offers assistance to members of
insolvent health maintenance organizations, and the Florida Workers’ Compensation Insurance Guaranty Association (ss.
631.901 – 631.932, F.S.) is directed by law to protect policyholders of insolvent workers’ compensation insurers. The
Florida Self-Insurers Guaranty Association (ss. 440.385 – 440.386, F.S.) protects policyholders of insolvent individual self-
insured employers for workers’ compensation claims. The Florida Insurance Guaranty Association (ss. 631.50 – 631.70,
F.S.) is responsible for paying claims for insolvent insurers for most remaining lines of insurance, including residential and
commercial property, automobile insurance, and liability insurance, among others.
5 “Before the creation of guaranty associations, a typical claimant could have waited for years for payment of a claim and
then still receive only a fraction of what was due under the terms of the policy or contract. Guaranty associations, subject
to statutory limitations, were created to alleviate these problems and ensure the stability of the insurance market.
Specifically, in the event of a life/health insurer liquidation, the guaranty mechanism provides for the continuation of
eligible contracts that would otherwise terminate.” National Association of Insurance Commissioners, Guaranty
Associations/Funds, https://www.naic.org/cipr_topics/topic_guaranty_associations.htm (last visited Feb. 26, 2021).
6 The term “unearned premium” refers to that portion of a premium that is paid in advance, typically for six months or one
year, and which is still owed on the unexpired portion of the policy.
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The FLAHIGA
Statutory provisions relating to the FLAHIGA, which was created in 1979, are contained in ch. 631, part
III, F.S. The FLAHIGA is a nonprofit corporation and is governed by a board of directors composed of at
least nine but not more than 11 member insurance companies.7 All insurance companies (with limited
exceptions) licensed to write life and health insurance or annuities in Florida are required, as a
condition of doing business in Florida, to be a member of the FLAHIGA.8
Plan of Operation
The FLAHIGA’s operations are set forth in a plan of operation. Amendments to the plan of operation
must be submitted to the DFS for approval and are effective upon written approval by the DFS.9 The
plan of operation must:10
Establish procedures for handling the FLAHIGA’s assets.
Establish the amount and method of reimbursing the FLAHIGA’s board members for expenses
incurred by them as board members, though board members are not otherwise compensated by
the FLAHIGA for their services.11
Establish regular places and times for meetings of the board of directors.
Establish procedures for keeping records of all financial transactions of the FLAHIGA, its
agents, and the board of directors.
Establish procedures whereby selections for the board of directors are made and submitted to
the DFS.
Establish any additional procedures for assessments.
Contain additional provisions necessary or proper for the execution of the powers and duties of
the FLAHIGA.
Additionally, the plan of operation may delegate duties of the FLAHIGA, except the power to borrow
and to assess its members, to a corporation, association, or other organization which performs or will
perform functions similar to those of this association, or its equivalent, in two or more states.12 This
provision contemplates membership in and delegation of duties to the National Organization of Life and
Health Insurance Guaranty Associations discussed below.
Insolvency Process
In the event a member insurer is found to be insolvent and is ordered to be liquidated by a court, a
receiver takes over the insurer under court supervision and processes the assets and liabilities through
liquidation. Upon liquidation, the FLAHIGA automatically becomes liable for the policy obligations that
the liquidated insurer owed to its Florida policyholders.13 The FLAHIGA services the policies, collects
premiums, and pays valid claims under the policies. The FLAHIGA’s rights under the policies are those
that applied to the insurer prior to liquidation. The FLAHIGA may cancel the policy if the insurer could
have done so, but normally the FLAHIGA continues the policies until it can transfer to, or substitute the
policies with, a new, stable insurer with approval of the OIR.
The FLAHIGA’s aggregate liability with respect to one life may not exceed the following:
Life insurance death benefit: $300,000 per insured life.
Life insurance cash surrender: $100,000 per insured life.
Health insurance or long-term care insurance: $300,000 per insured life.
7 Ss. 631.715(1) and 631.716(1), F.S.
8 S. 631.715(1), F.S.
9 S. 631.721(1)(a), F.S.
10 S. 631.721(3), F.S.
11 S. 631.716(3), F.S.
12 S. 631.721(4), F.S.
13 Generally, the FLAHIGA covers only policyholders and certificate holders that were valid Florida residents on the date
that a member insurer is declared insolvent and liquidated. However, non-residents of Florida and beneficiaries of covered
persons are covered by the FLAHIGA under limited circumstances. s. 631.713(2), F.S.
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Annuity cash surrender: $250,000 for deferred annuity contracts per contract owner.
Annuity in benefit: $300,000 per contract owner.
Basic hospital expense, basic medical-surgical, or major medical expense health insurance
policies (other than long-term care insurance policies): $500,000 per insured life.14
Additionally, the FLAHIGA will only cover a policy or contract to the extent that:
The interest rate on which the policy or contract is based, averaged over the four-year period
immediately preceding the date on which the member insurer becomes impaired or insolvent, is
less than the Moody’s Corporate Bond Yield Average (averaged for that same four-year period)
minus two percentage points.
The interest rate on which the policy or contract is based, on and after the date on which the
member insurer becomes an impaired or insolvent, is less than the Moody’s Corporate Bond
Yield Average minus three percentage points.
The FLAHIGA statutes do not currently define the term “Moody’s Corporate Bond Yield Average”.
Powers and Duties of the FLAHIGA
The FLAHIGA carries out its duties pursuant to authority granted by and directives contained in statute.
Among the powers statutorily granted to the FLAHIGA is the authority to:
Guarantee or reinsure, or cause to be guaranteed, assumed, or reinsured, any or all of the
covered policies of an impaired domestic insurer;15 and
Take such legal action as may be necessary to avoid payment of improper claims.16
Additionally, the FLAHIGA has standing to appear before any court in this state which has jurisdiction
over an impaired or insolvent insurer to which the FLAHIGA is or may become obligated.17 Such
standing extends to all matters germane to the powers and duties of the FLAHIGA, including but not
limited to, proposals for reinsuring or guaranteeing the covered policies of the impaired or insolvent
insurer and the determination of the covered policies and contractual obligations. While the statute
expressly provides the FLAHIGA standing to appear in courts of this state, the statute does not
expressly provide the FLAHIGA the right to appear or intervene before a court or agency in another
state.
Assessment of Members
By law, the FLAHIGA is divided into three operating accounts:18
The health insurance account;
The life insurance account; and
The annuity account.
The FLAHIGA is authorized to levy two types of assessments to carry out its responsibilities:
Class A assessments may be levied for the purpose of covering the FLAHIGA’s general
administrative costs and for the cost of examining a member insurer that the FLAHIGA’s board
believes in good faith may be impaired or insolvent.19 These assessments may only be made on
a non-pro rata basis up to $250 per member per calendar year.20 Additionally, Class A
assessments may not be credited against future Class B assessments.21
14 S. 631.717(12), F.S.; FLAHIGA, Frequently Asked Questions, https://www.flahiga.org/FAQ (last visited Feb. 26, 2021).
15 S. 631.717(1)(a), F.S.
16 S. 631.717(13)(f), F.S.
17 S. 631.717(7), F.S.
18 S. 631.715(2)(a), F.S.
19 Ss. 631.718(2)(a) and 631.723(3), F.S.
20 S. 631.718(3)(a), F.S.
21 Id.
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Class B assessments are authorized to fund the FLAHIGA’s duties related to a specific
insolvency.22 Except for assessments related to long-term care insurance insolvencies, Class B
assessments are based on an insurer’s pro rata share of all premiums collected by insurers in
this state on policies covered by the account during the three years prior to the assessment.23
Except for assessments related to long-term care insurance insolvencies, an insurer’s
assessment for each account may not exceed, in any one calendar year, 1 percent of the
insurer’s average premiums written in the covered account during the three-year period
preceding the year in which the assessment is made.24 An insurer may offset any assessment
against either its premium tax or corporate income tax liability in 5 percent increments over the
20-year period following the year in which the assessment was paid.25 When assessments
related to insolvencies are imposed, the FLAHIGA must issue a certificate of contribution to
each insurer paying such assessment for the amount of the assessment paid.26 A certificate of
contribution may be shown by the insurer in its financial statement as an asset in such form and
for such amount, if any, and period of time as the OIR approves.27 However, any amount of
assessment offset against the insurer’s premium tax or corporate income tax liability may not be
shown as an asset of the insurer.28
Currently, there is a cap on assessment of any member insurer that is a nonprofit insurance company
which issues annuity contracts or group annuity contracts pursuant to s. 121.35, F.S.,29 or for the
benefit of employees of Florida educational institutions.30 Such nonprofit insurance companies may not
be assessed in any one calendar year more than the greater of:31
The amount which the company paid to this state in the previous year as premium tax and
corporate tax on the business to which the FLAHIGA statutes apply, or
0.1 percent of written premium on such business in this state.
The FLAHIGA may abate or defer, in whole or in part, the assessment of a member insurer if, in the
opinion of the board, payment of the assessment would endanger the ability of the member insurer to
fulfill its contractual obligations.32 In the event an assessment against a member insurer is abated, or
deferred in whole or in part, the amount by which such assessment is abated or deferred may be
assessed against the other member insurers.33
National Organization of Life and Health Insurance Guaranty Associations (NOLHGA)34
NOLHGA is a voluntary membership organization founded in 1983 when state life and health insurance
guaranty associations saw the need for a mechanism to help them coordinate their efforts to provide
protection to policyholders when a life or health insurance company insolvency affects people in
multiple states. Today, NOLHGA membership includes life and health insurance guaranty associations
of all 50 states and the District of Columbia.
When an insurer licensed in multiple states is declared insolvent, NOLHGA, on behalf of affected
member state guaranty associations, assembles a task force of guaranty association officials. This task
force analyzes the company’s commitments to policyholders; ensures that covered claims are paid;
22 S. 631.718(2)(b), F.S.
23 S. 631.718(3)(c), F.S.
24 S. 631.718(5)(a), F.S.
25 S. 631.72(1), F.S.
26 S. 631.718(8), F.S.
27 Id.
28 Id.
29 Section 121.35, F.S., requires the Department of Management Services to establish an optional retirement program
under which contracts providing retirement and death benefits may be purchased for eligible members of the State
University System who elect to participate in the program.
30 S. 631.718(9), F.S.
31 Id.
32 S. 631.718(4), F.S.
33 Id.
34 NOLHGA, About Us, https://www.nolhga.com/aboutnolhga/main.cfm/location/whatisnolhga (last visited Feb. 26, 2021).
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and, where appropriate, arranges for covered policies to be transferred to a healthy insurer. The task
force may also support the efforts of the receiver to dispose of the company’s assets in a way that
maximizes their value. When there is a shortfall of estate assets needed to pay the claims of covered
policyholders, guaranty associations assess the licensed insurers in their states a proportional share of
the funds needed.
NOLHGA’s coordination of the workout of a multi-state insolvency significantly reduces costs to
guaranty associations because the NOLHGA task force avoids the need for each state guaranty
association to hire its own legal and financial experts. This coordination of effort also helps reduce the
length of time a receiver may require to develop a plan of rehabilitation or otherwise resolve a multi-
state insolvency.
The National Association of Insurance Commissioners (NAIC) – Life and Health Guaranty Association
Model Act
The NAIC is the U.S. standard-setting and regulatory support organization created and governed by the
chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.35
Through the NAIC, state insurance regulators establish standards and best practices, conduct peer
reviews, and coordinate their regulatory oversight.36 OIR Commissioner David Altmaier currently serves
as the NAIC President.37
The NAIC has promulgated and periodically updates a model act for use by states in governing their
Life and Health Insurance Guaranty Associations.38 Below are pertinent provisions in the most recent
model act. Italicized words indicate portions of the model act that the bill adds to the FLAHIGA statutes.
Definitions:
o “Moody’s Corporate Bond Yield Average” means the monthly average corporates as
published by Moody’s Investors Service, Inc., or any successor thereto.39
o “Person” means an individual, corporation, limited liability company, partnership,
association, governmental body or entity, or voluntary organization.40
Powers of the guaranty association state that the association may guarantee, assume, reissue,
or reinsure, or cause to be guaranteed, assumed, reissued, or reinsured, any or all of the
policies or contracts of the impaired insurer.41
The guaranty association’s standing to appear or intervene before a court or agency in this state
extends to all matters germane to the powers and duties of the association, including, but not
limited to, proposals for reinsuring, reissuing, modifying, or guaranteeing the policies or
contracts of the impaired or insolvent insurer and the determination of the policies or contracts
and contractual obligations.42 The guaranty association shall also have the right to appear or
intervene before a court or agency in another state with jurisdiction over an impaired or
insolvent insurer for which the association is or may become obligated or with jurisdiction over
any person or property against whom the association may have rights through subrogation or
otherwise.43 These provisions enable the guaranty association to protect its interest and the
best interests of the policyholders, contract owners, certificate holders, or enrollees in the
handling of an impairment or insolvency by providing that the association’s standing to appear in
courts with jurisdiction over an insolvent insurer will extend to any matters concerning the duties
of the association.44
35 NAIC, About the NAIC, https://www.naic.org/index_about.htm (last visited Feb. 26, 2021).
36 Id.
37 Id.
38 NAIC, Life and Health Insurance Guaranty Association Model Act, 2018, http://www.naic.org/store/free/MDL-520.pdf
(last visited Feb. 26, 2021).
39 Id. at 9 and 37.
40 Id. at 9 and 38.
41 Id. at 12.
42 Id. at 15.
43 Id.
44 Id. at 20.
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The guaranty association may take such legal action as may be necessary or appropriate to
avoid or recover payment of improper claims.45
The guaranty association may join an organization of one or more other state associations of
similar purposes, to further the purposes and administer the powers and duties of the
association.46 This provision is intended to explicitly recognize that prompt and efficient
discharge of the guaranty association’s obligations will be greatly facilitated, especially in
multistate insolvencies, by acting in concert through NOLHGA to develop and, where
appropriate, carry out coordinated plans.47
The amount of a Class A assessment shall be determined by the board and may be authorized
and called on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be
credited against future Class B assessments.48
The guaranty association may abate or defer, in whole or in part, the assessment of a member
insurer if, in the opinion of the board, payment of the assessment would endanger the ability of
the member insurer to fulfill its contractual obligations. In the event an assessment against a
member insurer is abated, or deferred in whole or in part, the amount by which the assessment
is abated or deferred may be assessed against the other member insurers in a manner
consistent with the basis for assessments set forth in this section. Once the conditions that
caused a deferral have been removed or rectified, the member insurer shall pay all
assessments that were deferred pursuant to a repayment plan approved by the Association.49
The plan of operation shall:
o Establish procedures whereby a director may be removed for cause, including in the
case where a member insurer director becomes an impaired or insolvent insurer.50
o Require the board of directors to establish a policy and procedures for addressing
conflicts of interest.51
Effect of the Bill
Definitions
In conformity with the NAIC model act, the bill:
Adds a definition for “Moody’s Corporate Bond Yield Average” and defines the term as meaning
the monthly average corporate bond yields published by Moody’s Investor Services, Inc., or
any successor thereto.52
Adds “limited liability company” and “governmental body or entity” to the definition of “person”.
Powers and Duties of the FLAHIGA
In conformity with the NAIC model act, the bill adds that:
The FLAHIGA has authority to assume or reissue, or cause to be reissued, any or all of the
covered policies of an impaired domestic insurer.
The FLAHIGA has right to appear or intervene before a court or agency in another state which
has jurisdiction over:
o An impaired or insolvent insurer for which the FLAHIGA is or may become obligated; or
o A person or property against whom the FLAHIGA may have rights through subrogation
or otherwise.
For purposes of the FLAHIGA’s standing to appear before any court in this state, the
FLAHIGA’s powers and duties include reissuing or modifying covered policies.
45 Id. at 16.
46 Id.
47 Id. at 20.
48 Id. at 21.
49 Id. at 22.
50 Id. at 24.
51 Id.
52 The term “Moody’s Corporate Bond Yield Average” is used in the context of an interest rate cap on FLAHIGA’s
coverage of policies or contracts of the impaired or insolvent insurer.
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The FLAHIGA has the power to take such legal action as may be necessary to recover
payment of improper claims.
The FLAHIGA has the power to join an organization of other state guaranty associations to
further the purposes and to carry out the powers and duties of the FLAHIGA (i.e., membership
in NOLHGA).53
Assessments
In conformity with the NAIC model act, the bill removes the cap of $250 on Class A assessments,
permits Class A assessments to be made on either a pro rata or non-pro rata basis, and allows the
FLAHIGA’s board to credit Class A assessments against future Class B assessments. The ability to
credit Class A assessments against future Class B assessments provides budget flexibility. However,
since Class A assessments are much smaller than Class B assessments, this change may not
significantly decrease liability for Class B assessments.
The bill removes the cap on assessment of any member insurer that is a nonprofit insurance company
which issues annuity contracts or group annuity contracts pursuant to s. 121.35, F.S., or for the benefit
of employees of Florida educational institutions. Such companies would still be subject to assessment
caps applicable to all member insurers, and the FLAHIGA maintains its ability to abate or defer the
assessment of a member insurer if payment of the assessment would put the member insure at risk of
becoming impaired or insolvent.
Also in conformity with the NAIC model act, the bill adds a provision that would cause a member
insurer to pay all assessments that were deferred, once the conditions that caused a deferral have
been removed or rectified.
Plan of Operation
In conformity with the NAIC model act, the bill directs that the FLAHIGA’s plan of operation must:
Establish a procedure for removing a member of the board of directors when that member
becomes an impaired or insolvent insurer.
Require the board of directors to establish a policy and procedures for addressing conflicts of
interest.
B. SECTION DIRECTORY:
Section 1. Amends s. 631.714, F.S., relating to definitions.
Section 2. Amends s. 631.717, F.S., relating to powers and duties of the association.
Section 3. Amends s. 631.718, F.S., relating to assessments.
Section 4. Amends s. 631.721, F.S., relating to plan of operation.
Section 5. Provides an effective date of July 1, 2021.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
53 The FLAHIGA is already a member of NOLHGA, and the FLAHIGA’s plan of operation is already permitted to delegate
many of the FLAHIGA’s duties to NOLHGA.
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None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The fiscal impact on the private sector is indeterminate. The bill may result in increased costs to some
insurance companies, because it removes the reduced assessment cap for nonprofit annuity insurers
that issue policies to educational groups, provides that a member insurer must pay all assessments
that were deferred once the insurer regains financial strength, removes the cap on Class A
assessments, and allows Class A assessments to be made on a pro rata basis. However, for these
same reasons, the bill may equally result in decreased costs to other insurance companies. Overall, the
bill may lead to better financial strength of the FLAHIGA, the safety net for insurance companies that
write life and health insurance or annuities in Florida.
D. FISCAL COMMENTS:
None.
III. 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 does not confer agency rulemaking authority nor require an agency to promulgate rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 797 2021
1 A bill to be entitled
2 An act relating to the Florida Life and Health
3 Insurance Guaranty Association; amending s. 631.714,
4 F.S.; defining the term "Moody's Corporate Bond Yield
5 Average" and redefining the term "person," to apply to
6 provisions relating to life and health insurance
7 guaranty of payments; amending s. 631.717, F.S.;
8 authorizing the Florida Life and Health Insurance
9 Guaranty Association to assume, reissue, and cause to
10 be reissued covered polices of impaired insurers under
11 certain circumstances; revising the association's
12 standing before a court; providing that the
13 association has the right to appear or intervene
14 before a court or agency in another state under
15 certain circumstances; authorizing the association to
16 join certain organizations for specified purposes;
17 amending s. 631.718, F.S.; authorizing the board of
18 directors of the association to credit specified
19 assessments against certain future assessments under
20 certain circumstances; deleting provisions prohibiting
21 credits against future insolvency assessments and
22 provisions limiting the amount assessed; requiring
23 member insurers to pay deferred assessments under
24 certain circumstances; deleting provisions limiting
25 the amount that may be assessed against specified
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26 member insurers; amending s. 631.721, F.S.; providing
27 additional requirements for the association's plan of
28 operation; providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. Subsections (8), (9), and (10) of section
33 631.714, Florida Statutes, are renumbered as subsections (9),
34 (10), and (11), respectively, present subsection (9) is amended,
35 and a new subsection (8) is added to that section, to read:
36 631.714 Definitions.—As used in this part, the term:
37 (8) "Moody's Corporate Bond Yield Average" means the
38 monthly average corporate bond yields published by Moody's
39 Investors Service, Inc., or any successor thereto.
40 (10)(9) "Person" means any individual, corporation,
41 limited liability company, partnership, association,
42 governmental body or entity, or voluntary organization.
43 Section 2. Paragraph (a) of subsection (1), subsection
44 (7), and paragraph (f) of subsection (13) of section 631.717,
45 Florida Statutes, are amended, and paragraph (h) is added to
46 subsection (13) of that section, to read:
47 631.717 Powers and duties of the association.—
48 (1) If a domestic insurer is an impaired insurer, the
49 association may, subject to the approval of the impaired insurer
50 and the department:
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51 (a) Guarantee, assume, reissue, or reinsure, or cause to
52 be guaranteed, assumed, reissued, or reinsured, any or all of
53 the covered policies of the impaired insurer;
54 (7) The association shall have standing to appear before
55 any court in this state which has jurisdiction over an impaired
56 or insolvent insurer to which the association is or may become
57 obligated under this part. Such standing shall extend to all
58 matters germane to the powers and duties of the association,
59 including but not limited to, proposals for reinsuring,
60 reissuing, modifying, or guaranteeing the covered policies of
61 the impaired or insolvent insurer and the determination of the
62 covered policies and contractual obligations. The association
63 also has the right to appear or intervene before a court or
64 agency in another state which has jurisdiction over:
65 (a) An impaired or insolvent insurer for which the
66 association is or may become obligated; or
67 (b) A person or property against whom the association may
68 have rights through subrogation or otherwise.
69 (13) The association may:
70 (f) Take such legal action as may be necessary to avoid or
71 recover payment of improper claims.
72 (h) Join an organization of other state guaranty
73 associations to further the purposes and to carry out the powers
74 and duties of the association.
75 Section 3. Paragraph (a) of subsection (3) and subsections
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76 (4) and (9) of section 631.718, Florida Statutes, are amended,
77 and paragraphs (b) and (c) of subsection (3) of that section are
78 republished, to read:
79 631.718 Assessments.—
80 (3)(a) The amount of any Class A assessment shall be
81 determined by the board and may be made on a pro rata or non-pro
82 rata basis. If on a pro rata basis, the board may credit the
83 assessment against future Class B assessments The assessment may
84 not be credited against future insolvency assessments and may
85 not exceed $250 per member insurer in any one calendar year.
86 (b)1. The amount of any Class B assessment, except for
87 assessments related to long-term care insurance, must be
88 allocated for assessment purposes among the accounts pursuant to
89 an allocation formula, which may be based on the premiums or
90 reserves of the impaired or insolvent insurer.
91 2. The amount of the Class B assessment for long-term care
92 insurance written by the impaired or insolvent insurer must be
93 allocated according to a methodology included in the plan of
94 operation and approved by the department. The methodology must
95 provide for 50 percent of the assessment to be allocated to
96 health member insurers and 50 percent to be allocated to life
97 and annuity member insurers.
98 3. For the purposes of the methodology outlined in
99 subparagraph 2. and included in the plan of operation, the
100 health member insurers' share of the assessment must be
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101 calculated by including the assessable premiums of member health
102 maintenance organizations of the Florida Health Maintenance
103 Organization Consumer Assistance Plan.
104 (c) Class B assessments against member insurers for each
105 account must be based upon the premiums received on business in
106 this state by each assessed member insurer on policies or
107 contracts covered by each account for the 3 most recent calendar
108 years for which information is available preceding the year of
109 the assessment in proportion to premiums received on business in
110 this state for those calendar years by all assessed member
111 insurers. If the most recent 3 years of premium information is
112 not available for each member insurer, the board of directors
113 may use the premium information that is reasonably available.
114 (4) The association may abate or defer, in whole or in
115 part, the assessment of a member insurer if, in the opinion of
116 the board, payment of the assessment would endanger the ability
117 of the member insurer to fulfill its contractual obligations. In
118 the event an assessment against a member insurer is abated, or
119 deferred in whole or in part, the amount by which such
120 assessment is abated or deferred may be assessed against the
121 other member insurers in a manner consistent with the basis for
122 assessments set forth in this section. Once the conditions that
123 caused a deferral have been removed or rectified, the member
124 insurer shall pay all assessments that were deferred pursuant to
125 a repayment plan approved by the association.
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126 (9) Notwithstanding any provision to the contrary, no
127 member insurer that is a nonprofit insurance company which
128 issues annuity contracts or group annuity contracts pursuant to
129 s. 121.35, or for the benefit of employees of educational
130 institutions situated in this state may be assessed in any one
131 calendar year an amount greater than the amount which it paid to
132 this state in the previous year as premium tax and corporate tax
133 on the business to which this part applies or 0.1 percent of
134 written premium on such business in this state, whichever is
135 greater.
136 Section 4. Paragraphs (h) and (i) are added to subsection
137 (3) of section 631.721, Florida Statutes, and subsections (1)
138 and (2) of that section are republished, to read:
139 631.721 Plan of operation.—
140 (1)(a) The association shall submit to the department a
141 proposed plan of operation and any amendments thereto necessary
142 or suitable to assure the fair, reasonable, and equitable
143 administration of the association. The proposed plan of
144 operation and any amendments thereto shall become effective upon
145 approval in writing by the department.
146 (b) If at any time the association fails to submit
147 suitable amendments to the plan, the department shall, after
148 notice and hearing, adopt such reasonable rules as are necessary
149 to effectuate the provisions of this part. Such rules shall
150 continue in force until modified by the department or superseded
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151 by a proposed plan submitted by the association and approved by
152 the department.
153 (2) All member insurers shall comply with the approved
154 plan of operation.
155 (3) The plan of operation shall, in addition to
156 requirements enumerated elsewhere in this part:
157 (h) Establish a procedure for removing a member of the
158 board of directors when that member becomes an impaired or
159 insolvent insurer.
160 (i) Require the board of directors to establish a policy
161 and procedures for addressing conflicts of interest.
162 Section 5. This act shall take effect July 1, 2021.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 823 Alarm System Contractors
SPONSOR(S): Regulatory Reform Subcommittee, Mariano
TIED BILLS: IDEN./SIM. BILLS: SB 998
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 17 Y, 0 N, As CS Brackett Anstead
2) Commerce Committee Brackett Hamon
SUMMARY ANALYSIS
Electrical contractors, alarm system contractors, and electrical specialty contractors are certified by or
registered with the Electrical Contractors’ Licensing Board (ECLB) of the Department of Business and
Professional Regulation (DBPR). Certified contractors can practice statewide and are licensed and regulated
by the ECLB. Registered contractors are licensed and regulated by a local jurisdiction and may practice within
that locality. Registered contractors are also required to register their license with the ECLB.
An “alarm system” is defined as “any electrical device, signaling device, or combination of electrical devices
used to signal or detect a burglary, fire, robbery, or medical emergency.
The Florida Building Code (Building Code) must be applied, administered, and enforced uniformly and
consistently from jurisdiction to jurisdiction. Local governments have the power to inspect all buildings,
structures, and facilities within their jurisdiction in protection of the public’s health, safety, and welfare, and to
enforce the Building Code. It is unlawful for a person or corporation to construct, alter, repair, or demolish a
building without obtaining a permit from the local enforcing agency.
Current law requires an electrical and alarm system contractor to obtain a building permit before installing,
replacing, or repairing a fire alarm system.
Current law also requires electrical and alarm system contractors to include their license number in every offer
of service, business proposal, or advertisement, regardless of medium. However, an advertisement does not
include business stationery or any promotional novelties such as balloons, pencils, trinkets, or articles of
clothing.
The bill:
Provides that an electrical contractor or an alarm system contractor does not have to include their
license number in an advertisement for alarm system contracting, if the advertisement directs
consumer’s to the contractor’s website and the website includes their license number.
Provides that an electrical or alarm system contractor is not required to obtain a fire alarm permit before
beginning repairs on a fire alarm system, if the contractor applied for a fire alarm permit prior to
beginning the repairs.
Clarifies that repairs to a fire alarm system are not considered complete until the required fire alarm
permit has been obtained and approved by the local enforcement agency.
The bill does not have a fiscal impact on state and local governments.
The bill provides for an effective date of July 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:
Present Situation
Contractors
Contractors are regulated by ch. 489, F.S., which outlines the law pertaining to contractors in the state
of Florida. Part I of ch. 489, F.S., covers contracting regulated by the Construction Industry Licensing
Board (CILB) and pt. II of ch. 489, F.S., covers contracting regulated by the Electrical Contractors’
Licensing Board (ECLB). Both boards are housed in the Department of Business and Professional
Regulation (DBPR).
Electrical contractors, alarm system contractors, and electrical specialty contractors are certified by or
registered with the ECLB. Certified contractors can practice statewide and are licensed and regulated
by ECLB. Registered contractors are licensed and regulated by a local jurisdiction and may practice
within that locality.1
Electrical contractors may work on electrical wiring, fixtures, appliances, apparatus, raceways, and
conduits which generate, transmit, transform, or utilize electrical energy in any form.2
Alarm system contractors may lay out, fabricate, install, maintain, alter, repair, monitor, inspect,
replace, or service alarm systems. An “alarm system” is defined as “any electrical device, signaling
device, or combination of electrical devices used to signal or detect a burglary, fire, robbery, or medical
emergency.”3
Electrical certified specialty contractors are contractors whose scope of work is limited to a particular
phase of electrical contracting, such as electrical signs. Certified electrical specialty contractors can
practice statewide. The ECLB creates electrical certified specialty contractor licenses through
rulemaking, and has created the following certified specialty contractor licenses:4
Lighting maintenance specialty contractor;
Sign specialty electrical contractor;
Residential electrical contractor;
Limited energy systems specialty contractor;
Utility line electrical contractor; and
Two-Way Radio Communications Enhancement Systems contractor.
The scope of work for certified electrical contractors includes any work that an alarm system contractor
is able to perform.5
Registered electrical contractors may install raceways for alarm systems.6 They may also bid on
electrical contracts, which include alarm systems as part of the contract, but they must subcontract the
work on such alarm systems to an alarm system contractor.7
State Fire Marshal
1
See generally s. 489.505, F.S.
2
S. 489.505(12), F.S.
3
S. 489.505(1)-(2), F.S.
4
Ss. 489.505(19), and 489.511(4), F.S; Rule 61G6-7.001, F.A.C.
5
S. 489.537(7), F.S.
6
A “raceway” is an enclosed channel designed to hold wires, cables, or busbars. Mike Holt, Understanding Raceways, EC&M (Feb.
13, 2018) https://www.ecmweb.com/national-electrical-code/code-basics/article/20903368/understanding-
raceways#:~:text=The%20NEC%20defines%20a%20raceway,permitted%20in%20this%20Code%20%5BArt. (last visited Mar. 3,
2021).
7
S. 489.537(2)(b), F.S.
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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 (Division
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.8 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.
The State Fire Marshal also adopts by rule the Florida Fire Prevention Code (Fire Code), which
contains all fire safety laws and 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.9
The State Fire Marshall adopts a new edition of the Fire Code every three years. When adopting a new
edition of the Fire Code, the State Fire Marshal must adopt the most recent version of the National Fire
Protection Association (NFPA) Standard 1, Fire Prevention Code, and the NFPA 101 Life Safety
Code.10
State law requires all municipalities, counties, and special districts with fire safety responsibilities to
enforce the Fire Code as the minimum fire prevention code to operate uniformly among local
governments and in conjunction with the Florida Building Code.11 Each county, municipality, and
special district with fire safety enforcement responsibilities must employ or contract with a fire safety
inspector (certified by the State Fire Marshal) to conduct all fire safety inspections required by law.12
The Florida Building Code
In 1974, Florida adopted legislation requiring all local governments to adopt and enforce a minimum
building code that would ensure that Florida’s minimum standards were met. Local governments could
choose from four separate model codes. The state’s role was limited to adopting all or relevant parts of
new editions of the four model codes. Local governments could amend and enforce their local codes,
as they desired.13
In 1992, Hurricane Andrew demonstrated that Florida’s system of local codes did not work. Hurricane
Andrew easily destroyed those structures that were allegedly built according to the strongest code. The
Governor eventually appointed a study commission to review the system of local codes and make
recommendations for modernizing the system. The 1998 Legislature adopted the study commission’s
recommendations for a single state building code and enhanced the oversight role of the state over
local code enforcement. The 2000 Legislature authorized implementation of the Florida Building Code
(Building Code), and that first edition replaced all local codes on March 1, 2002.14 The current edition of
the Building Code is the seventh edition, which is referred to as the 2020 Florida Building Code.15
Part IV of ch. 553, F.S., is known as the “Florida Building Codes Act” (Act). The purpose and intent of
the Act is to provide a mechanism for the uniform adoption, updating, interpretation, and enforcement
8
S. 633.104, F.S.
9
Ss. 633.202(1) and (2), F.S.
10
Id. The NFPA is the National Fire Protection Association. Founded in 1896, the NFPA delivers information and knowledge through
no more than 300 consensus codes and standards, research, training, education, outreach and advocacy. NFPA, About NFPA,
https://www.nfpa.org/about-nfpa (last visited Feb. 4, 2021).
11
The Florida Building Code is the statewide building code for all construction in the state. Every local government must enforce the
Florida Building Code and issue building permits. See generally ch. 553, F.S.
12
S. 633.216(1), F.S.
13
The Florida Building Commission Report to the 2006 Legislature, Florida Department of Community Affairs, p. 4,
http://www.floridabuilding.org/fbc/publications/2006_Legislature_Rpt_rev2.pdf (last visited Feb. 15, 2021).
14
Id.; DBPR, Building Code Information System, https://floridabuilding.org/c/default.aspx# (last visited on Feb. 15, 2021).
15
Florida Building Commission Homepage, https://floridabuilding.org/c/default.aspx (last visited Feb. 21, 2021).
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DATE: 3/12/2021
of a single, unified state building code. The Building Code must be applied, administered, and enforced
uniformly and consistently from jurisdiction to jurisdiction. 16
The Florida Building Commission (Commission) was statutorily created to implement the Building
Code. The Commission, which is housed within the DBPR, is a 19-member technical body made up of
design professionals, contractors, and government experts in various disciplines covered by the
Building Code. The Commission reviews several International Codes published by the International
Code Council,17 the National Electric Code, and other nationally adopted model codes to determine if
the Building Code needs to be updated and adopts an updated Building Code every three years.18
Enforcement of the Florida Building Code
It is the intent of the Legislature that local governments have the power to inspect all buildings,
structures, and facilities within their jurisdiction in protection of the public’s health, safety, and welfare.19
Every local government must enforce the Florida Building Code and issue building permits.20
Current law also requires State universities, Florida College System institutions, and public school
districts to enforce the Building Code for their building projects, including conducting plan review and
inspections. State universities, Florida College System institutions, and public school districts must use
or contract with licensed building officials, inspectors, and plan examiners, and may elect to use a local
government’s building department to review plans and perform inspections.21
It is unlawful for a person, firm, or corporation to construct, erect, alter, repair, secure, or demolish any
building without first obtaining a building permit from the local government or from such persons as
may, by resolution or regulation, be directed to issue such permit, upon the payment of reasonable fees
as set forth in a schedule of fees adopted by the enforcing agency.22
A building permit is an official document or certificate issued by the local building official that authorizes
performance of a specific activity.23 A building official is a local government employee or a person
contracted by a government entity who supervises building code activities, including plans review,
enforcement, and inspection.24 Any construction work that requires a building permit also requires plans
and inspections by the building official to ensure the work complies with the Building Code.25 Generally
speaking, a permit that passes the required inspections is considered completed or closed.26
Time-Period to Review Building Permit Applications
Fire protection systems, including fire alarms, must be installed, repaired, operated, and maintained in
accordance with the Fire Code and the Building Code.27
16
See S. 553.72(1), F.S.
17
The International Code Council (ICC) is an association that develops model codes and standards used in the design, building, and
compliance process to “construct safe, sustainable, affordable and resilient structures.” International Code Council, About the ICC,
https://www.iccsafe.org/about/who-we-are/ (last visited Feb. 21, 2021).
18
Ss. 553.73, and 553.74, F.S.
19
S. 553.72, F.S.
20
Ss. 125.01(1)(bb), 125.56(1), and 553.80(1), F.S.
21
S. 553.80(6), F.S.
22
See Ss. 125.56(4)(a) and 553.79(1), F.S.
23
S. 468.603(2), F.S; S. 202 of the Seventh edition of the Florida Building Code (Building).
24
S. 468.603(2), F.S.; S. 202 of the Seventh edition of the Florida Building Code (Building).
25
Ss. 107, 110.1, and 110.3 of the Seventh edition of the Florida Building (Building).
26
Doug Wise, Closing Inactive & Excluded Building Permits, Palm Beach County Planning, Zoning & Building Department,
Building Division, http://discover.pbcgov.org/pzb/building/BuildingCodes/PBO-
126%20%E2%80%93%20Closing%20Inactive%20and%20Excluded%20Building%20Permits.pdf (last visited Mar. 15, 2019).
27
Sections 202 and 901.2 of the Seventh edition of the Florida Building Code (Building).
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Current law requires local governments to review certain building permit applications within a specific
time-period of receiving the applications. Current law has established time-periods for local
governments to review applications for the following building permits:28
accessory structure;
alarm permit;
nonresidential buildings less than 25,000 square feet;
electric;
irrigation permit;
landscaping;
mechanical;
plumbing;
residential units other than a single family unit;
multifamily residential not exceeding 50 units;
roofing;
signs;
site-plan approvals and subdivision plats not requiring public hearings or public notice; and
lot grading and site alteration associated with the permit application set forth in this subsection.
When a local government receives an application for one of the above building permits, it must:29
Inform the applicant within 10 days of receiving the application, what information, if any, is
needed to complete the application.
o If the local government fails to provide written notice to the applicant within the 10-day
window, the application is deemed to be properly completed.
Notify the applicant within 45 days of the application being deemed complete, if additional
information is necessary to determine the sufficiency of the application;
o If additional information is needed the local government must specify what additional
information is necessary.
o The applicant may submit the additional information to the local government or request
that the local government act on the application without the additional information.
Approve, approve with conditions, or deny the application within 120 days following receipt of
the completed application.
o This period is tolled during the time an applicant is responding to a request for additional
information and may be extended by mutual consent of the parties.
These time-periods do not apply when a law, agency rule, or local ordinance specify different
timeframes for review of local building permit applications, for permits for wireless communication
facilities, or when both parties agree to an extension.30
Uniform Fire Alarm Permit
During the 2019 Legislative Session, the Legislature passed HB 1393, which created s. 553.7921 and
created a uniform fire alarm permit application. An electrical or alarm system contractor must file a
uniform fire alarm permit application with a local enforcement agency in order to obtain a fire alarm
permit.31
28
S. 553.792(2), F.S.
29
S. 553.792(1), F.S.
30
Id.
31
S. 553.7921(1); See House Analysis of 2019 House Bill 1393 (Jun. 27, 2019).
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A local enforcement agency is an agency of local government, a local school board, a community
college board of trustees, or a university board of trustees in the State University System with
jurisdiction to make inspections of buildings and to enforce the Building Code.32
The Uniform Fire Alarm Permit Application must include the following information:33
The name and address of the owner of the property;
The name, address, and license number of the contractor;
A description sufficient to identify the property to be improved, including the property’s address
and legal description;
A description of the work being performed; and
The owner and the contractor’s signature.
An electrical or alarm system contractor cannot install, replace, or repair a fire alarm until they obtain a
fire alarm permit. Thus, electrical and alarm system contractors are unable to begin repairs on fire
alarms until they obtain a permit.34
Advertisements
Current law requires construction contractors and electrical and alarm system contractors to have their
license number in every offer of service, business proposal, or advertisement, regardless of
medium. However, advertisement does not include business stationery or any promotional novelties
such as balloons, pencils, trinkets, or articles of clothing.35
According to DBPR, if an advertisement does not include a contractor’s license number, it is a warning
sign that the contractor may be an unlicensed contractor.36
According to industry members, many states require contractors to include their license number in their
advertisements. This results in alarm system companies that operate in multiple states having to create
separate advertisements, including television, radio, and print ads, for each state or having to list all of
their license numbers in an advertisement.37
Effect of the Bill
An electrical or alarm system contractor is not required to obtain a fire alarm permit before beginning
repairs on a fire alarm system if:
the fire alarm was previously permitted by the local enforcement agency; and
the contractor applied for a fire alarm permit prior to beginning the repairs.
The bill clarifies that repairs to a fire alarm system are not considered complete until the required fire
alarm permit has been obtained and approved by the local enforcement agency.
The bill provides that an electrical contractor or an alarm system contractor does not have to include
their license number in an advertisement38 for alarm system contracting if:
The alarm system contractor maintains a website that contains his or her license number; and
The alarm system contractor’s advertisement directs consumers to the contractor’s website.
32
S. 553.71(5), F.S.
33
S. 553.7921(2), F.S.
34
S. 553.7921(1); See House Analysis of 2019 House Bill 1393 (Jun. 27, 2019).
35
Ss. 489.119(5), and 489.521(7)(b), F.S.
36
Any person without a license who advertises himself or herself or a business organization as available to practice electrical or alarm
system contracting commits unlicensed contracting. S. 489.531(1)(b), F.S.; DBPR, Tips for Hiring a Contractor,
http://www.myfloridalicense.com/dbpr/reg/documents/Construction-Brochure-English.pdf?x40199 (last visited Mar. 3, 2021).
37
Email from Holly Borgmann, Vice President of Government Affairs, ADT, RE: ADT one pager on advertising, (Mar. 4, 2021).
38
“Advertisement” includes newspaper, magazine, flyer, billboard, phone book, Internet, and broadcast advertisements.
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DATE: 3/12/2021
B. SECTION DIRECTORY:
Section 1. Amends s. 489.521, F.S., providing an exemption to having to include a license number
in an alarm system advertisement.
Section 2. Amends s. 553.7921, F.S., provides that a contractor may begin repairs on a fire alarm
system under certain conditions.
Section 3. Providing an effective date of July 1, 2021.
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:
The bill may have a positive impact on the private sector by allowing electrical and alarm system
contractors to begin repairs on fire alarm systems without having to wait to obtain a permit, and
allowing companies to advertise in multiple states using the same advertisement.
D. FISCAL COMMENTS:
None.
III. 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:
None.
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DATE: 3/12/2021
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 8, 2020, the Regulatory Reform Subcommittee adopted two amendments and reported the bill
favorably as a committee substitute. The committee substitute:
Clarifies that electrical contractors that are performing alarm system contracting, in addition to alarm
system contractors, are not required to include their license number in an advertisement, if the
advertisement includes the contractor’s website and the website includes the contractor’s license
number.
Clarifies that a repaired alarm system is not compliant with the Florida Building Code, Florida Fire
Code, and any other applicable codes, until the local enforcement agency has approved the repair.
The analysis is drafted to the committee substitute as passed by the Regulatory Reform Subcommittee.
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DATE: 3/12/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 823 2021
1 A bill to be entitled
2 An act relating to alarm system contractors; amending
3 s. 489.521, F.S.; providing that advertisements for
4 alarm system contracting do not have to include the
5 contractor's registration or certification number
6 under certain circumstances; amending s. 553.7921,
7 F.S.; authorizing a contractor to begin repairing a
8 specified fire alarm system under certain conditions;
9 providing that a repaired fire alarm system is not
10 compliant with applicable codes and standards until
11 certain conditions are met; conforming provisions to
12 changes made by the act; providing an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Paragraph (b) of subsection (7) of section
17 489.521, Florida Statutes, is amended to read:
18 489.521 Business organizations; qualifying agents.—
19 (7)
20 (b) The registration or certification number of a
21 contractor shall be stated in each offer of services, business
22 proposal, or advertisement, regardless of medium, used by that
23 contractor. For the purposes of this part, the term
24 "advertisement" does not include business stationery or any
25 promotional novelties such as balloons, pencils, trinkets, or
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26 articles of clothing. This paragraph does not apply to a
27 newspaper, magazine, flyer, billboard, phone book, Internet, or
28 broadcast advertisement for alarm system contracting as long as
29 the contractor maintains an Internet website that contains the
30 contractor's registration or certification number and the
31 advertisement directs consumers to the contractor's Internet
32 website.
33 (c) The board shall assess a fine of not less than $100 or
34 issue a citation to any contractor who fails to include that
35 contractor's certification or registration number when
36 submitting an advertisement for publication, broadcast, or
37 printing. In addition, any person who claims in any
38 advertisement to be a certified or registered contractor, but
39 who does not hold a valid state certification or registration,
40 commits a misdemeanor of the second degree, punishable as
41 provided in s. 775.082 or s. 775.083.
42 Section 2. Section 553.7921, Florida Statutes, is amended
43 to read:
44 553.7921 Fire alarm permit application to local
45 enforcement agency.—
46 (1) A contractor must file a Uniform Fire Alarm Permit
47 Application as provided in subsection (2) with the local
48 enforcement agency and must receive the fire alarm permit
49 before:
50 (a) installing or replacing a fire alarm if the local
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51 enforcement agency requires a plan review for the installation
52 or replacement. If the local enforcement agency requires a fire
53 alarm permit in order to repair; or
54 (b) Repairing an existing alarm system that was previously
55 permitted by the local enforcement agency, a contractor must
56 file a Uniform Fire Alarm Permit Application as provided in
57 subsection (2) but may begin work before receiving the permit if
58 the local enforcement agency requires a fire alarm permit for
59 the repair. A repaired fire alarm system is not in compliance
60 with applicable codes and standards until the required permit
61 has been issued and the local enforcement agency has approved
62 the repair.
63 (2) A Uniform Fire Alarm Permit Application must be
64 submitted with any drawing, plan, and supporting documentation
65 required by a local enforcement agency for a project for which a
66 plan review or fire alarm permit is required under subsection
67 (1). The application may be submitted electronically or by
68 facsimile and must be signed by the owner, or the owner's
69 authorized representative, and the contractor, or the
70 contractor's agent. The application must contain the following
71 information, in a substantially similar form:
72 UNIFORM FIRE ALARM
73 PERMIT APPLICATION
74 Tax Folio No......... Application No.........
75 Owner's or Representative's Name.................................
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76 Property Address.................................................
77 City.................... State................ Zip............
78 Phone Number....................
79 Fee Simple Titleholder's Name (if other than
80 owner)..........................................................
81 ......
82 Fee Simple Titleholder's Address (if other than
83 owner)..........................................................
84 ......
85 Description of
86 Work............................................................
87 ....
88 New Install........ Replacement........
89 Addition........ Other........
90 Construction Type................................................
91 Proposed Use.....................................................
92 Alarm Contractor's Name..........................................
93 Alarm Contractor's Address.......................................
94 City.................... State................ Zip............
95 Phone Number....................
96 Alarm Contractor's License
97 Number....................
98 Application is hereby made to obtain a permit to do the work or
99 installation as indicated. I certify that no work or
100 installation has commenced before the filing of this permit
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101 application and that all of the foregoing information is true
102 and accurate.
103 ...(Signature of Owner or Owner's Representative)...
104 Printed Name................................
105 ...(Signature of Contractor or Agent)...
106 Printed Name................................
107 Section 3. This act shall take effect July 1, 2021.
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hb0823-01-c1
HB 855
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 855 Barber Services
SPONSOR(S): Morales and others
TIED BILLS: IDEN./SIM. BILLS: SB 1176
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 16 Y, 0 N Wright Anstead
2) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
Barbers and barbershops are regulated by the Barbers’ Board under the Department of Business and
Professional Regulation.
A barber’s license is required to perform barbering services, all barbering services must be performed in
registered barbershops, and arrangements for such services must be made through a registered barbershop.
However, services may be performed outside of a barbershop if they are provided:
for a client of ill health;
in connection with the motion picture, fashion photography, theatrical, or television industry;
for a manufacturer trade show demonstration; or
for an educational seminar.
The bill:
allows barbers to shampoo, cut, or arrange hair in a location other than a registered barbershop at any
time; and
allows barbers to do so without making arrangements through a registered barbershop.
The bill does not have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0855b.COM
DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Barbering
Barbers and barbershops are regulated by ch. 476, F.S., and licensed by the Barbers’ Board (board)
under the Department of Business and Professional Regulation (DBPR).
‘Barbering’ means any of the following practices when done for remuneration and for the public, but not
when done for the treatment of disease or physical or mental ailments: shaving, cutting, trimming,
coloring, shampooing, arranging, dressing, curling, or waving the hair or beard or applying oils, creams,
lotions, or other preparations to the face, scalp, or neck, either by hand or by mechanical appliances.”1
A barber’s license is required to perform barbering services.2 To be eligible for licensure, barbers must:3
be at least 16 years old,
complete the required training for barbers, which is between 600 and 900 hours,4
pass the written examination,5 and
pay a $218.50 application fee,6 plus a $5 unlicensed activity fee.7
There are 11,713 barbers and 5,434 restricted barbers in the state. For the 2019-2020 Fiscal Year,
DBPR received 845 complaints against barbers, and took 112 disciplinary actions.8
Barbershops
In Florida, barbershops must be registered.9 Barbershops are inspected periodically by DBPR, in
accordance with sanitary standards set forth by the board.10
Generally, all barbering services must performed in registered barbershops, except services provided:11
in a location other than a registered barbershop, including, but not limited to, a nursing home,
hospital, or residence, for a client of ill health who is unable to go to a registered barbershop;
o Arrangements for the performance of such barber services must be made through a
registered barbershop.
in connection with the motion picture, fashion photography, theatrical, or television industry;
for a manufacturer trade show demonstration; or
for an educational seminar.
1 S. 476.034(2), F.S.
2 S. 476.144(1), F.S.
3 S. 476.114, F.S.
4 Barbers are eligible to take the examination after 600 hours. If their examination is not successful, the full 900 hours
must be completed. S. 476.114(2)(c), F.S. There is also an option to be a barber with a restricted license, which is 600
hours training in total and restricts such barbers from applying chemical solutions or preparations to hair. S. 476.144(6),
F.S.; R. 61G3-16.006, F.A.C.
5 R. 61-35.006, F.A.C.
6 Email from Conner Mann, Legislative Affairs Coordinator, Florida Department of Business and Professional Regulation,
RE: Barbers (Mar. 1, 2021).
7 S. 455.2281, F.S.
8 DBPR, supra note 6.
9 S. 476.184(1), F.S.
10 S. 476.184(2), F.S.
11 S. 476.188, F.S.
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Cosmetology and Cosmetology Salons
Cosmetologists, nail specialists, facial specialists, full specialists, and related salons in the state are
regulated in accordance with ch. 477, F.S., and licensed by the Board of Cosmetology under DBPR. A
cosmetology or specialty license is required to perform cosmetology services.12
In Florida, cosmetology and specialty salons must be licensed.13 Such salons are inspected periodically
by DBPR, in accordance with sanitary standards set forth by the Board of Cosmetology.14
Generally, cosmetology services must be performed by a cosmetologist or specialist in a licensed
cosmetology or specialty salon. However, cosmetologists and specialists are allowed to perform hair
shampooing, hair cutting, hair arranging, nail polish removal, nail filing, nail buffing, and nail cleansing
outside of a salon.15
Section 477.0263 specifies the following exceptions to the general rule that cosmetology services be
performed in a salon:16
services provided for a client who for reasons of ill health is unable to go to a licensed salon;
services provided for a motion picture, fashion photography, theatrical, or television industry;
services provided for a photography studio salon;
services provided for a manufacturer trade show demonstration;
services provided for an educational seminar;
services provided for a special event;17 and
hair shampooing, hair cutting, hair arranging, nail polish removal, nail filing, nail buffing, and
nail cleansing, regardless of whether the service is in connection with a special event.
Prior to 2020, a cosmetologist or specialist was prohibited from performing cosmetology services
outside a salon except in limited circumstances and was required to book appointments or
arrangements through a salon for services provided outside the salon, similar to current requirements
for barbers.18 In 2020, the law was changed to allow cosmetologists and specialists to perform a limited
number of cosmetology services outside of a salon and to do so without making such arrangements
through a salon.
Effect of the Bill
The bill allows barbers to shampoo, cut, or arrange hair outside of a registered barbershop at any
time, and allows barbers to do so without making arrangements or appointments through a registered
barbershop.
The bill provides an effective date of July 1, 2021.
B. SECTION DIRECTORY:
Section 1: Amends s. 476.188, F.S.; providing an exception to the requirement to make outside
bookings through a registered barbershop.
Section 2: Provides an effective date.
12 S. 477.014, F.S.
13 S. 477.025(1), F.S.
14 S. 477.025(9), F.S.; Ch. 61G5-20, F.A.C.
15 Id.
16 S. 477.0263(1)-(4), F.S.
17 Defined by board rule as a wedding or fashion show. R. 61G5-20.0015(1), F.A.C.
18 S. 477.0263(4), F.S. (2019).
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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:
The bill will allow barbers to practice shampooing, hair cutting, or hair arranging without needing to
perform such services in a barbershop or to make appointments for such services through a
barbershop, which will bring them in line with current cosmetology requirements. This will provide
barbers with more flexibility to offer their customers more services outside a barbershop.
D. FISCAL COMMENTS:
None.
III. 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:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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DATE: 3/12/2021
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 855 2021
1 A bill to be entitled
2 An act relating to barber services; amending s.
3 476.188, F.S.; authorizing a barber to shampoo, cut,
4 or arrange hair in a location other than a registered
5 barbershop without specified arrangements; providing
6 an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Subsection (2) of section 476.188, Florida
11 Statutes, is amended to read:
12 476.188 Barber services to be performed in registered
13 barbershop; exception.—
14 (2) Pursuant to rules established by the board, barber
15 services may be performed by a licensed barber in a location
16 other than a registered barbershop, including, but not limited
17 to, a nursing home, hospital, or residence, when a client for
18 reasons of ill health is unable to go to a registered
19 barbershop. Arrangements for the performance of barber services
20 in a location other than a registered barbershop shall be made
21 only through a registered barbershop. However, a barber may
22 shampoo, cut, or arrange hair in a location other than a
23 registered barbershop without such arrangements.
24 Section 2. This act shall take effect July 1, 2021.
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hb0855-00
CS/HB 1055
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1055 Pub. Rec./Trade Secrets
SPONSOR(S): Government Operations Subcommittee, Gregory
TIED BILLS: IDEN./SIM. BILLS: SB 1446
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Government Operations Subcommittee 14 Y, 0 N, As CS Villa Smith
2) Commerce Committee Wright Hamon
3) State Affairs Committee
SUMMARY ANALYSIS
Florida law contains a variety of provisions that make trade secret information exempt or confidential and
exempt from public record requirements. Some exemptions only protect trade secrets, while others protect
“proprietary business information” and define that term to specifically include trade secrets. Some exemptions
also provide a specific process that an agency must use when protecting trade secret information under the
exemption.
A majority of these exemptions rely on one of two different statutory definitions. Some of the exemptions define
the term in accordance with the Uniform Trade Secrets Act, and some define the term in accordance with
Florida’s Criminal Statutes.
The bill creates a public record exemption for trade secrets held by an agency that would apply to those
agencies that do not have an agency specific public record exemption for trade secrets. The bill defines the
term “trade secret” to have the same meaning as the definition currently codified in the Uniform Trade Secrets
Act.
The bill requires a person who submits a record claimed to contain a trade secret to an agency to mark the
record clearly with the words “trade secret” and to submit with the record a notice verifying, under penalty of
perjury, that the record contains a trade secret.
The bill provides for repeal of the exemption on October 2, 2026, unless reviewed and saved from repeal
through reenactment by the Legislature. The bill provides a public necessity statement as required by the
Florida Constitution.
The bill may have a minimal fiscal impact on the state and local governments. See Fiscal Comments.
Article I, s. 24(c) of the Florida Constitution requires a two-thirds vote of the members present and
voting for final passage of a newly created or expanded public record or public meeting exemption.
The bill creates a new public record exemption; thus, it requires a two-thirds vote for final passage.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Public Records
Article I, s. 24(a) of the Florida Constitution sets forth the state’s public policy regarding access to
government records. This section guarantees every person a right to inspect or copy any public record
of the legislative, executive, and judicial branches of government. The Legislature, however, may
provide by general law for the exemption of records from the requirements of article I, s. 24(a) of the
Florida Constitution.1 The general law must state with specificity the public necessity justifying the
exemption2 and must be no more broad than necessary to accomplish its purpose.3
Public policy regarding access to government records is addressed further in s. 119.07(1)(a), F.S.,
which guarantees every person a right to inspect and copy any state, county, or municipal record,
unless the record is exempt. Furthermore, the Open Government Sunset Review Act 4 provides that a
public record exemption may be created or maintained only if it serves an identifiable public purpose. In
addition, it may be no broader than necessary to meet one of the following purposes:5
Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption.
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision.
Protect trade or business secrets.
The Open Government Sunset Review Act also requires the automatic repeal of a public record
exemption on October 2nd of the fifth year after its creation or substantial amendment, unless the
Legislature reenacts the exemption.6
Trade Secrets
Florida law contains a variety of provisions that make trade secret information exempt or confidential
and exempt7 from public record requirements. Some exemptions only protect trade secrets, while
others protect “proprietary business information” and define that term to specifically include trade
secrets.
The following are examples of public record exemptions for trade secrets:
Section 119.071(1)(f), F.S., exempts data processing software that is a trade secret and
obtained by an agency under a licensing agreement that prohibits its disclosure, and agency
produced data processing software that is sensitive.
Section 125.0104(9)(d)3., F.S., exempts trade secret information held by a county tourism
promotion agency.
1 Art. I, s. 24(c), FLA. CONST.
2 This portion of a public record exemption is commonly referred to as a “public necessity statement.”
3 Art. I, s. 24(c), FLA. CONST.
4 S. 119.15, F.S.
5 S. 119.15(6)(b), F.S.
6 S. 119.15(3), F.S.
7 There is a difference between records the Legislature designates as exempt from public record requirements and those
the Legislature deems confidential and exempt. A record classified as exempt from public disclosure may be disclosed
under certain circumstances. See WFTV, Inc. v. The School Board of Seminole, 874 So. 2d 48, 53 (Fla. 5th DCA 2004),
review denied 892 So. 2d 1015 (Fla. 2004); City of Riviera Beach v. Barfield, 642 So. 2d 1135 (Fla. 4th DCA 1994);
Williams v. City of Minneola, 575 So. 2d 687 (Fla. 5th DCA 1991). If the Legislature designates a record as confidential
and exempt from public disclosure, such record may not be released by the custodian of public records to anyone other
than the persons or entities specifically designated in statute. See Attorney General Opinion 85-62 (August 1, 1985).
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Section 331.326, F.S., makes trade secrets held by Space Florida or discussed by Space
Florida’s board confidential and exempt.
Section 365.174(4), F.S., makes proprietary confidential business information submitted by a
provider of voice communication services to the board of directors of the E911 Board, the
Division of State Technology within the Department of Management Services, or the
Department of Revenue as an agent of the E911 Board confidential and exempt.
Section 381.83, F.S., makes trade secrets obtained by the Department of Health confidential
and exempt.
Section 403.7046(2) and (3)(b)2., F.S., makes trade secret information contained in certain
reports to the Department of Environmental Protection and local governments confidential and
exempt.
Section 499.051(7)(b), F.S., makes trade secret information contained in a complaint or
obtained by the Department of Business and Professional Regulation pursuant to an
investigation under the Florida Drug and Cosmetic Act confidential and exempt.
Section 573.123(2), F.S., makes trade secret information subject to a marketing order issued by
the Department of Agriculture and Consumer Services confidential and exempt.
Section 601.10(8)(b), F.S., makes trade secret information held by the Department of Citrus
confidential and exempt.
Section 601.76, F.S., makes certain formulas required to be filed with the Department of
Agriculture and Consumer Services confidential and exempt.
Section 815.04(3), F.S., makes data, programs, and supporting documentation that is a trade
secret and resides or exist internal or external to a computer, computer system, computer
network, or electronic device and that is held by an agency confidential and exempt.
While some of these exemptions do not define the term “trade secret,” a majority of them rely on one of
two different statutory definitions. Some of the exemptions define the term in accordance with the
Uniform Trade Secrets Act, which defines the term as follows:
“Trade Secret” means information, including a formula, pattern, compilation,
program, device, method, technique, or process that:
(a) Derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its
disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.8
Other exemptions define the term in accordance with Florida’s criminal statutes, which define the term
as follows:
“Trade secret” means the whole or any portion or phase of any formula, pattern,
device, combination of devices, or compilation of information which is for use, or is
used, in the operation of a business and which provides the business an
advantage, or an opportunity to obtain an advantage, over those who do not know
or use it. The term includes any scientific, technical, or commercial information,
including financial information, and includes any design, process, procedure, list
of suppliers, list of customers, business code, or improvement thereof. Irrespective
of novelty, invention, patentability, the state of the prior art, and the level of skill in
the business, art, or field to which the subject matter pertains, a trade secret is
considered to be:
1. Secret;
2. Of value;
3. For use or in use by the business; and
4. Of advantage to the business, or providing an opportunity to obtain an
advantage, over those who do not know or use it
8 S. 688.002(4), F.S.
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when the owner thereof takes measures to prevent it from becoming available to
persons other than those selected by the owner to have access thereto for limited
purposes.9
In addition, some exemptions provide a specific process that an agency10 must use when protecting
trade secret information under the exemption. For instance, some exemptions require the party that
submits information claimed to be a trade secret to designate the information as protected, and some
exemptions require the agency to determine whether information claimed to be a trade secret
constitutes a trade secret.11
Effect of the Bill
The bill creates a public record exemption for trade secrets held by an agency. The public record
exemption would apply to those agencies that do not have an agency specific public record exemption
for trade secrets.
The bill defines the term “trade secret” to have the same meaning as the definition currently codified in
the Uniform Trade Secrets Act, which includes information that is a formula, pattern, compilation,
program, device, method, technique, or process that:
Derives independent economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use; and
Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The bill requires a person who submits a record claimed to contain a trade secret to an agency to mark
the record clearly with the words “trade secret” and to submit with the record a notice verifying that the
record contains a trade secret. Verification occurs by signing a written declaration under penalty of
perjury. Failure to submit the notice constitutes a waiver of any claim by the submitter that the record
contains a trade secret.
The bill authorizes an agency to disclose a trade secret, together with the notice of trade secret, to an
officer or employee of another agency or governmental entity whose use of the trade secret is within
the scope of his or her lawful duties and responsibilities.
The bill specifies that an agency employee who, while acting in good faith and in the performance of his
or her duties, releases records pursuant to the process created by the bill is not liable, civilly or
criminally, for release of the records.
The bill provides a public necessity statement as required by the Florida Constitution, specifying that
the public record exemption is necessary to protect trade secret information provided to an agency by
an individual or business because disclosure of such information to competitors of those businesses
would be detrimental to the business. In addition, the exemption is necessary to protect trade secret
information created by an agency in furtherance of the agency’s duties and responsibilities, and
disclosure of such information would be detrimental to the effective and efficient operation of the
agency.
The bill provides for repeal of the exemption on October 2, 2026, unless reviewed and saved form
repeal through reenactment by the Legislature.
9 S. 812.081(1)(c), F.S.
10 The term “agency” is defined to mean any state, county, district, authority, or municipal officer, department, division,
board, bureau, commission, or other separate unit of government created or established by law including, for the
purposes of chapter 119, F.S., the Commission on Ethics, the Public Service Commission, and the Office of Public
Counsel, and any other public or private agency, person, partnership, corporation, or business entity acting on behalf of
any public agency. S. 119.011(2), F.S.
11 See S. 381.83, F.S.
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B. SECTION DIRECTORY:
Section 1 creates s. 688.01, F.S., relating to a trade secret exemption from inspecting or copying public
records.
Section 2 amends s. 688.001, F.S., relating to a short title.
Section 3 amends s. 688.006, F.S., relating to preservation of secrecy.
Section 4 provides a public necessity statement.
Section 5 provides an effective date of upon becoming a law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill does not appear to have an impact on state government revenues.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill does not appear to have an impact on local government revenues.
2. Expenditures:
See Fiscal Comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
The bill could have a minimal fiscal impact on agencies because agency staff responsible for complying
with public record requests may require training related to creation of the public record exemption. In
addition, agencies could incur costs associated with redacting the confidential and exempt information
prior to releasing a record. The costs, however, would be absorbed, as they are part of the day-to-day
responsibilities of agencies.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The 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 and municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
Vote Requirement
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Article I, s. 24(c) of the Florida Constitution requires a two-thirds vote of the members present and
voting for final passage of a newly created public record or public meeting exemption. The bill
creates a new public record exemption; thus, it requires a two-thirds vote for final passage.
Public Necessity Statement
Article I, s. 24(c) of the Florida Constitution requires a public necessity statement for a newly created
or expanded public record or public meeting exemption. The bill creates a new public record
exemption; thus, it includes a public necessity statement.
Breadth of Exemption
Article I, s. 24(c) of the Florida Constitution requires a newly created public record or public meeting
exemption to be no broader than necessary to accomplish the stated purpose of the law. The bill
creates a public record exemption for trade secrets held by an agency. As such, the exemption does
not appear to be in conflict with the constitutional requirement that it be no broader than necessary to
accomplish its purpose.
B. RULE-MAKING AUTHORITY:
The bill does not appear to create a need for rulemaking or rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 10, 2021, the Government Operations Subcommittee adopted an amendment and reported the
bill favorably as a committee substitute. The amendment removed the contract or agreement information
that was excluded from the definition of the term “trade secret” in the bill. The amendment aligned the
definition of trade secret to match the definition in the Uniform Trade Secrets Act.
This analysis is drafted to the committee substitute as approved by the Government Operations
Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1055 2021
1 A bill to be entitled
2 An act relating to public records; creating s. 688.01,
3 F.S.; providing definitions; providing an exemption
4 from public records requirements for a trade secret
5 held by an agency; providing notice requirements;
6 providing an exception to the exemption; providing
7 that an agency employee is not liable for the release
8 of certain records; providing for future legislative
9 review and repeal of the exemption; amending ss.
10 688.001 and 688.006, F.S.; conforming cross-
11 references; providing a statement of public necessity;
12 providing an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Section 688.01, Florida Statutes, is created to
17 read:
18 688.01 Trade secret exemption from inspecting or copying
19 public records.—
20 (1) DEFINITIONS.—As used in this section, the term:
21 (a) "Agency" has the same meaning as in s. 119.011.
22 (b) "Trade secret" has the same meaning as in s. 688.002.
23 (2) PUBLIC RECORD EXEMPTION.—A trade secret held by an
24 agency is confidential and exempt from s. 119.07(1) and s.
25 24(a), Art. I of the State Constitution.
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26 (3) SUBMISSION OF TRADE SECRET TO AN AGENCY.—
27 (a) If a person who submits records to an agency claims
28 that such submission contains a trade secret, such person shall
29 submit to the agency a notice of trade secret at the time he or
30 she submits such records to the agency. Failure to do so
31 constitutes a waiver of any claim by such person that the record
32 contains a trade secret. The notice must provide the name,
33 telephone number, and mailing address of the person claiming the
34 record contains a trade secret. Such person is responsible for
35 updating his or her contact information with the agency.
36 (b) Each page of a record or specific portion of a record
37 that contains a trade secret must be clearly marked with the
38 words "trade secret."
39 (c) When submitting a notice of trade secret to the
40 agency, the submitting party must verify to the agency through a
41 written declaration in the manner provided in s. 92.525 the
42 following:
43
44 [...I have/my company has...] read the definition of a
45 trade secret in s. 688.01, Florida Statutes, and [...I
46 believe/my company believes...] the information contained in
47 this record is a trade secret as defined in s. 688.01, Florida
48 Statutes.
49 [...I have/my company has...] taken measures to prevent the
50 disclosure of the record or specific portion of the record
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CS/HB 1055 2021
51 claimed to be a trade secret to anyone other than those who have
52 been selected to have access for limited purposes, and [...I
53 intend/my company intends...] to continue to take such measures.
54 The record or specific portion of the record claimed to be
55 a trade secret is not, and has not been, reasonably obtainable
56 without [...my/our...] consent by other persons by use of
57 legitimate means.
58 The record or specific portion of the record claimed to be
59 a trade secret is not publicly available elsewhere.
60
61 (4) AGENCY ACCESS.—An agency may disclose a trade secret,
62 together with the notice of trade secret, to an officer or
63 employee of another agency or governmental entity whose use of
64 the trade secret is within the scope of his or her lawful duties
65 and responsibilities.
66 (5) LIABILITY.—An agency employee who, while acting in
67 good faith and in the performance of his or her duties, releases
68 a record containing a trade secret pursuant to this act is not
69 liable, civilly or criminally, for such release.
70 (6) OPEN GOVERNMENT SUNSET REVIEW.—This section is subject
71 to the Open Government Sunset Review Act in accordance with s.
72 119.15 and shall stand repealed on October 2, 2026, unless
73 reviewed and saved from repeal through reenactment by the
74 Legislature.
75 Section 2. Section 688.001, Florida Statutes, is amended
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CS/HB 1055 2021
76 to read:
77 688.001 Short title.—Sections 688.001-688.01 Sections
78 688.001-688.009 may be cited as the "Uniform Trade Secrets Act."
79 Section 3. Section 688.006, Florida Statutes, is amended
80 to read:
81 688.006 Preservation of secrecy.—In an action under ss.
82 688.001-688.01 ss. 688.001-688.009, a court shall preserve the
83 secrecy of an alleged trade secret by reasonable means, which
84 may include granting protective orders in connection with
85 discovery proceedings, holding in camera hearings, sealing the
86 records of the action, and ordering any person involved in the
87 litigation not to disclose an alleged trade secret without prior
88 court approval.
89 Section 4. The Legislature finds that it is a public
90 necessity that trade secrets held by an agency be made
91 confidential and exempt from s. 119.07(1), Florida Statutes, and
92 s. 24(a), Article I of the State Constitution. The Legislature
93 recognizes that an agency may create trade secret information in
94 furtherance of the agency's duties and responsibilities and that
95 disclosure of such information would be detrimental to the
96 effective and efficient operation of the agency. If such trade
97 secret information were made available to the public, the agency
98 could suffer great economic harm. In addition, the Legislature
99 recognizes that in many instances, individuals and businesses
100 provide trade secret information for regulatory or other
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101 purposes to an agency and that disclosure of such information to
102 competitors of those businesses would be detrimental to the
103 businesses. Without the public record exemption, those entities
104 would hesitate to cooperate with an agency, which would impair
105 the effective and efficient administration of governmental
106 functions. As such, the Legislature's intent is to protect trade
107 secret information of a confidential nature that includes a
108 formula, pattern, compilation, program, device, method,
109 technique, or process used that derives independent economic
110 value, actual or potential, from not being generally known to,
111 and not being readily ascertainable by proper means by, other
112 persons who can obtain economic value from its disclosure or
113 use. Therefore, the Legislature finds that the need to protect
114 trade secrets is sufficiently compelling to override this
115 state's public policy of open government and that the protection
116 of such information cannot be accomplished without this
117 exemption.
118 Section 5. This act shall take effect upon becoming a law.
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HB 6073
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 6073 Individual Wine Containers
SPONSOR(S): LaMarca
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 16 Y, 1 N Thompson Anstead
2) Commerce Committee Thompson 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 administers and enforces the Beverage Law.
Current law addressing limitations on the size of individual wine containers provides the following:
The sale of wine in an individual container that holds more than one gallon of wine is prohibited.
Wine may be sold in a reusable container of 5.16 gallons.
Distributors and manufacturers are allowed to sell wine to other distributors and manufacturers in
containers of any size.
Except for restaurants in certain situations, wine sold or offered for sale by a licensed vendor to be
consumed off the premises must be in the unopened original container.
Violations are a second-degree misdemeanor.
The bill repeals the law relating to limitations on the size of individual wine containers.
The bill does not appear to have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/12/2021
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Beverage Law
In Florida, the Beverage Law1 regulates the manufacture, distribution, and sale of wine, beer, and liquor
by manufacturers, distributors, and vendors.2 The Division of Alcoholic Beverages and Tobacco
(Division) in the Department of Business and Professional Regulation (DBPR) administers and
enforces the Beverage Law.3
“Alcoholic beverages” are defined 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.4
The license and registration classifications used in the Beverage Law include the following:
“Manufacturers” are those “licensed to manufacture alcoholic beverages and distribute the same
at wholesale to licensed distributors and to no one else within the state, unless authorized by
statute.”
“Distributors” are those “licensed to sell and distribute alcoholic beverages at wholesale to
persons who are licensed to sell alcoholic beverages.”
“Importers” are those licensed to sell, or to cause to be sold, shipped, and invoiced, alcoholic
beverages to licensed manufacturers or licensed distributors, and to no one else in this state.5
“Vendors” are those “licensed to sell alcoholic beverages at retail only” and may not “purchase
or acquire in any manner for the purpose of resale any alcoholic beverages from any person not
licensed as a vendor, manufacturer, bottler, or distributor under the Beverage Law.”6
Wine Container Limitations
“Wine” is defined as all beverages made from fresh fruits, berries, or grapes, either by natural
fermentation or by natural fermentation with brandy added, in the manner required by the laws and
regulations of the United States, and includes all sparkling wines, champagnes, combination of the
aforesaid beverages, sake, vermouths, and like products. Sugar, flavors, and coloring materials may be
added to wine to make it conform to the consumer’s taste, except that the ultimate flavor or the color of
the product may not be altered to imitate a beverage other than wine or to change the character of the
wine.7
Current law prohibits the sale of wine in an individual container that holds more than one gallon.
However, wine may be sold in a reusable container of 5.16 gallons.8
Distributors and manufacturers are authorized to sell wine to other distributors and manufacturers in
containers of any size.9
Except for restaurants in certain situations,10 wine sold or offered for sale by a licensed vendor to be
consumed off-premises must be in the unopened original container.11
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
See s. 561.14, F.S.
3
S. 561.02, F.S.
4
S. 563.01, F.S.
5
S. 561.01(5), F.S.
6
S. 561.14, F.S.
7
S. 564.01(1), F.S.
8
S. 564.05, F.S.
9
Id.
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Violations are a second-degree misdemeanor, punishable by a maximum $500 fine12 and 60 days in
prison.13
Effect of the Bill
The bill repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
B. SECTION DIRECTORY:
Section 1 Repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
Section 2 Provides for an effective date.
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:
The bill will allow the sale of wine in an individual container of any size. This may have a positive fiscal
impact on businesses that sell wine.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
10
S. 564.09, F.S. The exception allows restaurant patrons to leave the premises with “one unsealed bottle of wine for consumption off
the premises,” provided certain conditions are met. The wine bottle must be partially consumed with a full course meal, securely
resealed by the licensee or one of its employees, secured in a bag or container, wrapped in a way that shows it was previously opened,
attached to a dated receipt indicating the full course meal, and transported in a locked vehicle glove compartment, locked trunk, or
behind the last upright seat of a motor vehicle that is not equipped with a trunk.
11
S. 564.05, F.S.
12
S. 775.083(1)(e), F.S.
13
Section 775.082(4)(b), F.S.
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Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not appear to create a need for rulemaking or rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
N/A
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 6073 2021
1 A bill to be entitled
2 An act relating to individual wine containers;
3 repealing s. 564.05, F.S., relating to the limitation
4 of size of individual wine containers; providing an
5 effective date.
6
7 Be It Enacted by the Legislature of the State of Florida:
8
9 Section 1. Section 564.05, Florida Statutes, is repealed.
10 Section 2. This act shall take effect July 1, 2021.
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