Tallahassee Watch

By Hannah Wallace February 28, 2006

Sarasota and Manatee counties are in a unique position this legislative session: the issues of most interest to local business-especially builders and developers-are also top priorities for the state, and almost every one of our legislators chairs an influential committee. Here's what some Tallahassee insiders have to say about this year's most important business-related legislation.

GROWTH MANAGEMENT Last year, the Florida legislature passed Senate Bill 360, also known as the 2005 Growth Management Act. Sponsored by Bradenton's Republican Sen. Mike Bennett, chair of the community affairs committee, the sweeping bill aims to address the availability of critical services, pumping $1.1 billion into the Department of Transportation for new roads and more than $200 million for schools and water services.

At issue now is the bill's vague language, which must be refined before its implementation deadlines arrive in 2007. It requires counties to have a "financially feasible" plan before building and says developers must pay their "proportionate share" of the cost, but it doesn't define "financially feasible" or provide any guidelines for determining a proportionate share.

IMPACT FEES One of the provisions in SB 360 created the Florida Impact Fee Review Task Force to study and recommend revisions to the way the government collects impact fees. In the debate before the bill passed, the Senate wanted to give the state authority over the collection of fees, but local officials and the House charged that the bill would choke off a chief source of county revenue and lead to large property tax hikes. The 15 task force members represent local governments, school boards, builders and developers. In a surprise move, Sen. Bennett urged Senate President Tom Lee, Republican of Brandon, to appoint one of the most vocal opponents of his impact fee policies to the panel: Sarasota County Commissioner Jon Thaxton.

The task force submitted its report in February, setting the stage for another round of impact fee debates this session. Tallahassee lobbyists expect to see renewed opposition to the state's attempts to regulate counties. "Once you go down that slippery slope of limiting local authority by statute, they [the county governments] view that as limiting their ability to collect revenue," says Janet Bowman, legal director of 1,000 Friends of Florida, a nonprofit, growth-management watchdog group. "So the question is, to what extent do these changes constrain their ability to use impact fees as a significant source of revenue?"

Another area of concern is "pay and go," the language in SB 360 that requires impact fees to be a 100-percent credit against the developer's proportionate share of taxes and costs. "This could mean a developer can pay their share of the improvement and then go ahead and build, whether or not the improvement gets done," says Bowman.

But Wade Hopping, a Tallahassee lawyer and lobbyist whose clients include the Florida Home Builders Association, says it's only fair to pay and go, because the alternative is for builders to pay their fair share and then stop and wait for all the other parties to pay as well. "It's really a chicken-and-egg issue. Should the money to pay for schools come before the kids arrive, or should the kids come first?" says Hopping.

CITIZENS PROPERTY INSURANCE Citizens Property Insurance, Florida's state-run "insurer of last resort," is required by law to have the highest rates in the state, so as not to compete with private insurers. It originally set its rates at 20 percent above other companies. But now that the actual risk has become painfully evident with the 2004 and 2005 hurricanes and its subsequent $1 billion deficit, the company raised rates by a statewide total average of 79.8 percent last year. The latest hike, approved in December, raised high-risk rates by 50.2 percent in Sarasota County and 48.8 percent in Manatee, driving premiums in both counties to more than $2,500.

Now Citizens is asking for a 11 percent assessment to cover its 2005 damages-which means the premiums of every property owner in the state will go up 11 percent, regardless of insurer. And that's in addition to the 6.8 percent assessment that took effect in January to cover Citizens' $516 million damages from 2004. The new rate increases still await approval from state officials, but legislators from Sarasota-Manatee's delegation say they're working on longer-term solutions.

Sarasota's Rep. Donna Clarke, a Republican who is on the House insurance committee, says the state has long been working with Washington to create a federal insurance company to be a second tier to Citizens. This would spread the cost out on a national basis and cover any disaster covered by the Federal Emergency Management Agency. "It would help any state recover not only in terms of cleanup, but economically as well," says Clarke, who is also running for Congress.

LOBBYIST REFORM In a December 2005 special session the legislature passed a major lobbying-reform bill that means lobbyists and public officials cannot buy each other meals or drinks, thus ending a longstanding Tallahassee deal-making tradition. "Will it impact how we do business on a day-to-day basis? No," says Rep. Ron Reagan of Bradenton, who as chair of the House ethics committee was one of the bill's chief sponsors. "I think it will have a significant impact on very large events like these lobster dinners where several hundred people attend. But you know what, tell me the cost, and I'll buy my own ticket."

Hopping agrees that buying lunch or coffee was never a real deal-clincher anyway. "If I could buy you for that, you weren't worth buying," he says. His concerns are with the new income-disclosure requirements, which are a particular strain on lobbyists and lawyers like himself, whose personal compensation is difficult to distinguish from his firm's, and may come from various sources that are difficult to interpret as political or not. "The bookkeeping is going to be a nightmare," he says.

Curiously, the bill doesn't ban contributions from lobbyists to campaigns or political action committees.

"Things done in special sessions often have unintended consequences unless they're planned out ahead of time," says Hopping. "I don't know how they're going to fix it without losing face. They shot at a turkey and hit an ant. Other than public perception, they didn't punish lobbyists."

DRILLING IN THE GULF When the U.S. House of Representatives approved legislation for drilling in the Arctic National Wildlife Refuge, many saw it as a first step toward drilling off the coasts of California and Florida, since the bill also provided funding for underwater exploratory research. And when Hurricanes Katrina, Rita and Wilma disrupted refineries and pipelines and drove oil prices through the roof, Florida lawmakers had to redouble their efforts to block any congressional action to drill in the Gulf of Mexico.

Although the issue is increasingly becoming a federal one, the state legislature this session will consider legislation banning drilling in state-controlled waters.

Rep. Clarke, as chair of the water and natural resources committee, has introduced HB 229, which bans drilling in the state's jurisdiction, defined in the Florida constitution as within three miles' distance of the east coast and three leagues' depth in the Gulf, which is as much as nine miles' distance in some areas. The state is already prohibited from leasing any submerged land or issuing any permits for drilling, but Clarke's bill would explicitly ban drilling altogether.

The bill also calls for an assessment and protection of fuel distribution and bulk-storage systems around the state. "Until 2004, we thought that Orlando would never be hit by a hurricane," says Clarke. "We have a fuel storage facility there... We need an update on the [transportation and storage] process, where it's going and how it gets there," and whether it's able to withstand a hurricane.

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