Committee Weeks Underway
This week the Florida legislature will begin its second of six “committee weeks” where legislation is introduced for initial discussion and consideration by lawmakers in preparation for the opening 60-day legislative session on Tuesday, March 5. The session is scheduled to end Friday May 3.
The only bill the legislature has to pass by law each year is the state budget. Lawmakers and incoming Governor Ron DeSantis received some good news going into the holiday break: stronger than expected tax collections will mean an additional $461.5 million in revenue projections in the current 2018-2019 budget year that ends this June 30 and another $380.5 million increase in the 2019-2020 fiscal year that starts July 1.
The current state budget includes $3.5 billion in reserves for future financial challenges, such as perhaps, recovery from Hurricane Michael. There’s always a big lag in reimbursements from the Feds to states after natural disasters. Updated reports show Florida spent $776 million in general fund revenues and trust fund money for Hurricane Irma response and recovery.
While much of that is expected to be reimbursed by FEMA, as of this past September 1, the state had received only $69.6 million for direct Irma-related costs and another $47.6 million to pay for displaced students. It’s part of the reason many local municipalities and counties impacted by Hurricane Michael want the state to front them expected federal reimbursements, as they lack reserves and bonding capacity in many cases to pay upfront recovery costs on their own.
Among the many issues we’ll be keeping an eye on in the 2019 Florida legislature will be Assignment of Benefits (AOB) reform, as we’ve outlined in previous stories. For a recap of last year’s failed reform efforts, read LMA Backgrounder: Assignment of Benefits (AOB) 2018. For the complete picture of AOB Abuse in Florida and what we’re doing about it, visit our AOB webpage.
Now on to some of the bills of interest that have been filed to date!
Assignment of Benefits (AOB) – Senator Doug Broxson (R-Pensacola) takes over chairmanship of the Senate Banking and Insurance Committee from Senator Anitere Flores. Broxson, an insurance agent by trade, is a longtime advocate for AOB reform. The senator has filed SB 122, which would prohibit policyholders from transferring their rights to attorney fees in claims disputes to third parties, such as repair or restoration contractors.
Essentially, the three-page bill says that attorney fees must be awarded to a named insured or beneficiary and can’t be assigned or extended by agreements, which would eliminate the incentive for contractors to have customers sign AOBs. Please keep in mind this bill could change significantly throughout the session depending on stakeholder input/feedback, testimony during committee hearings, and other negotiations. So while this is a first draft, so to speak, we are encouraged that the Senate is looking at the issue this year.
Last year, as you may recall, the House passed a good bill early in the session (HB 7015 by Rep. Jay Trumbull) but the Senate never considered it. The House bill included a lot of commonsense provisions including requiring written estimates for work and allowing policyholders to rescind an AOB without fees or penalties within a certain amount of time. So far, the Broxson bill doesn’t include that.
The Restoration Association of Florida opposes the bill as too broad, “punishing the whole group for the bad practices of a few.” Supporters say the bill simply clarifies the original intent of the law. No hearing date has been scheduled.
Chairing the House Insurance and Banking Subcommittee this session will be Rep. Cyndi Stevenson (R-St. Aug), an accountant by trade.
The effort to reform AOB abuse has gained a new ally. Former Florida insurance commissioner Kevin McCarty was elected chairman of the Florida Association for Insurance Reform, which is pushing for changes to the AOB system. You can read more about Kevin & FAIR here.
I attended the National Association of Public Insurance Adjusters meeting in Savannah last month to speak on AOB. As many of you know, public adjusters are concerned about AOB and its impact on their business. One of the notable audience members, Chip Merlin of the Merlin Law Group, had compliments and commentary about my presentation, which you can read here.
Also of note on the AOB front: The Florida Defense Lawyers Association is forming a Bad Faith committee. One-way attorney fees and bad faith seem to go together in certain insurance claims litigation. Many believe a solution to AOB abuse must also involve reform of Bad Faith. We’ve covered this on The Florida Insurance Roundup podcast episode on Bad Faith (and listening to former OIR General Counsel Belinda Miller’s comment beginning at 11:42 into the program is instructive about the market being “out of balance.”)
Communications While Driving – Where efforts failed last year to make texting while driving a primary offense (from the current secondary offense, where you can be ticketed during a traffic stop made for another reason), this year’s efforts so far are concentrated on the much broader distracted driving created by any wireless communications device.
SB 76 by Senator Wilton Simpson (R-Trilby) and HB 45 by Rep. Emily Slosberg (D-Boca Raton), essentially barring any hand-held devices while driving. SB 76 creates the “Florida Ban on Wireless Communications Devices While Driving Law”; prohibiting a person from operating a motor vehicle while listening or talking on a wireless communications device for the purpose of voice interpersonal communication. It also makes it a primary offense. So instead of just prohibiting texting, it would not include listening or talking on such a device for voice as well as non-voice communication. Exceptions are radio broadcasts, navigation assistance, and safety-related alerts.
HB 45 creates the “Hands-free Florida Law” and is similar but seemingly less stringent, in that it does allow the use of a hands-free device for voice communication. It prohibits operation of a motor vehicle while holding or touching a wireless communications device. It has similar exceptions; requires law enforcement officer to note the offender’s race on the citation and to the DHSMV; requires a report to Governor and Legislature; and also makes it a primary offense. No hearing dates for either bill have been scheduled.
Concealed Weapons Licenses – SB 108 by Senator Lauren Book (R-Plantation) transfers the concealed weapons licensing program of the Department of Agriculture and Consumer Services to the Department of Law Enforcement (FDLE). No hearing date has been scheduled.
Property-Assessed Clean Environment – HB 63 by Rep. Ray Rodrigues (R-Fort Myers), would allow the use of Property-Assessed Clean Environment (PACE) funds to get folks off septic tanks and connected to municipal sanitary sewer systems or to retrofit to an advanced onsite treatment system. No hearing date has been scheduled.