Miami Herald: 2010 legislative session to take on big business issues

The Miami Herald publlished this article on February 28, 2010.

BY BEATRICE E. GARCIA

Jump-starting the Florida economy and creating new jobs are the two big areas where business owners want action during this year’s legislative session.

But lawmakers’ ability to pass measures that bring about substantial changes will be limited by the state’s nearly $3 billion budget deficit. But they will still have tools such as tax credits, refunds and incentives to provide much-needed relief for businesses during one of the worst economic downturns the state has seen.

A massive jobs bill, along with a measure to scale back a huge unemployment tax hike that business owners face this year, are among the first bills lawmakers will tackle as they return to Tallahassee Tuesday for the 60-day 2010 session.

After jobs, problems in the real estate market and with property insurance are the other main issues legislators will handle. Although the state hasn’t seen a major hurricane since 2005, the withering financial condition of many Florida-based insurers has industry executives as well as regulators and lawmakers on edge.

Insurers are pushing for passage of a bill that would totally deregulate insurance rates, saying they need to charge “adequate rates” to build up sufficient reserves to cover losses from future hurricanes that hit the state. For consumers, deregulation could mean sharp increases in premiums.

“People are entitled to be insured by the company of their choice,” says Barney Bishop, president and chief executive of Associated Industries of Florida, a business lobbying group. “When the governor and his regulators arbitrarily and capriciously limit our choice that hurts our marketplace.”

Sean Shaw, the state’s insurance consumer advocate, has a different view.“I’m all for a free market. But property insurance rates in Florida don’t need to be uncapped. That’s just a crazy solution.”

One provision in a comprehensive insurance bill taking shape late last week would allow insurers to raise their rates as much as 10 percent a year. That kind of steady but limited increase is what lawmakers put in place in 2009 for Citizens Property Insurance, the state-run insurer.

This will be the first of three years that Citizens is allowed to raise its rates 10 percent. The insurer’s rates had been frozen from 2007 through 2009.

“A glide path — a slow gradual increase — is a good thing” for insurers as well as consumers, says David Daniel, director of government relations for the Florida Chamber.

Here are some of proposals of interest to both small and large businesses as well as consumers:

UNEMPLOYMENT TAX

The first order of business will be for both the state House of Representatives and the Senate to vote on bills that would reduce a planned increase in unemployment tax. As it stands now, the rate would increase from the current $8.40 per employee to $100.30. A bill filed by state Rep. Dave Murzin, R-Pensacola, and Rep. Jennifer Carroll, R-Fleming Island, would cap the increase at $25 this year. The hike would be put off for two years. But the pain of a tax increase can’t be avoid indefinitely because the money is needed to restore the state’s unemployment trust fund, which has been surviving on $1.1 billion of federal loans since last year. The recession has zapped the fund, which provides payment to jobless workers.

The state is pushing its first quarter tax collections into April so lawmakers can pass the bills lowering the tax increase. A floor vote is expected Tuesday or Wednesday.

JOBS

A massive 115-page “Jobs for Florida” bill, introduced by Sen. Don Gaetz, R-Niceville, comes with high hopes for boosting economic growth. Among its provisions are: providing incentives for manufacturing and hiring out-of-work people, extending a tax credit to companies creating 50 new jobs, creating a low-interest loan program for Florida companies with fewer than 50 employees, and increasing tax incentives used to lure companies to the Sunshine State.

The jobs bill also seeks to double the promotions budget for Florida’s tourism industry in an effort to lure Northern visitors fed up with harsh winters.

While Gaetz’s bill has moved quickly through the Senate, no companion bill has emerged yet in the Florida House.

Sen. Mike Haridopolos, the incoming Senate president, is backing a bill (SB1430) that revises corporate tax, sales and user tax credits to lure production companies back to Florida in an effort to create jobs. The bill would likely benefit a group of video-game developers now clustered around Orlando.

Another job-related bill, The Space Transition and Revitalization Act, would provide as much as $25 million a year over the next five years to provide assistance to expand or revamp Space Coast businesses hurt by the shutdown of the NASA shuttle program later this year.

PROPERTY INSURANCE

Insurers and several large business groups back the measure to deregulate rates because they fear bankrupt insurance companies mean higher surcharges on all policies. Florida residents are still paying for the shortfalls suffered by Citizens Property Insurance and the Florida Hurricane Catastrophe Fund, which provides low-cost back-up coverage to insurers operating in this state.

The legislature passed a similar, though more restrictive, bill in 2009 that Gov. Charlie Crist vetoed. He’s already said if the deregulation bill passes this year, he’ll take the same action.

While deregulation may be a nonstarter, several other insurance-related issues could affect businesses and consumers if they win passage. Among them:

• Public adjusters: Many insurers blame aggressive public adjusters, who represent homeowners in insurance disputes, for the slew of recently reopened claims that date back to Hurricane Wilma in 2005. A bill filed by by Sen. Mike Bennett, R-Bradenton, and Rep. Janet Long, D-St. Petersburg, would require public adjusters to wait 30 days before they could contact homeowners who have suffered a loss. It would also restrict how public adjusters advertise their services.
• Insurance rate relief: This proposal would establish a fund to provide no-interest loans to help low- and moderate-income families pay homeowners insurance premiums. Money for the fund would come from surtaxes levied on building-related permits.
• Insurance fraud: Insurers say they’ve seen an alarming increase in insurance-related fraud, especially with staged accidents and clinics billing for unneeded care. As of late Friday, the insurance fraud bill was drafted but not yet filed. Filing deadline for all bills is Tuesday.

PUBLIC SERVICE

Directly aimed at preventing some of the recent abuses discovered in Florida’s Public Service Commission, a Senate bill would require PSC commissioners, who regulate electric, natural gas and telecom companies, to follow the same code of conduct applied to judges. The measure, which has gotten favorable reviews by key Senate committees, would also require commissioners to post oral and written communication on the PSC’s website within 72 hours of any outside communication.

BANKING

The Florida Bankers Association is pushing for state legislation that would allow for nonjudicial foreclosures, in an effort to move the proceedings outside the court system.

Numerous other states allow for nonjudicial foreclosure; some states have both judicial and nonjudicial proceedings.

“Condo associations are upset with us. They say we’re not foreclosing fast enough,” said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association, a large trade group.

DiMarco said banks would still be obligated to work with delinquent homeowners to try to head off a foreclosure prior to filing a foreclosure action, but once they did file, they could take possession more quickly in many instances.

CRUISE AND SHIPPING

Cruise and shipping lines in Florida are urging the state legislature to change the use, regulation and pay rates of harbor pilots, who board vessels and guide them into ports.

INDUSTRIES

Any legislative debate is likely to draw on a recent study by Florida’s Office of Program Policy Analysis and Government Accountability, which details the use and regulation of harbor pilots in the state’s 11 deep-water ports.

The study estimated harbor pilots earn from $100,000 a year to more than $400,000 a year, depending on differences in pilotage rates and shipping volume at various ports.

The Florida Harbor Pilots Association favors the status quo, arguing its 97 professional pilots provide a vital watchdog service at a reasonable cost.

Shipping firms have been pushing for years for changes in the way Florida harbor pilots are used and compensated, with some arguing, among other things, that their own pilots could guide vessels safely into port and save money.

“Pilotage costs are passed on to the consumer,” said Michele M. Paige, who is president of the Florida Alliance of Maritime Organizations, a trade group of cruise and cargo interests that is pushing for the changes. She is also president of the Florida-Caribbean Cruise Association.

TOURISM

Carol Dover, a key lobbyist for hotels in Florida, said she’s most concerned about these bills expected to be considered this session:

• Gambling: A proposal to bring casino gambling to large resorts in Florida will draw the ire of Dover’s group, the Florida Restaurant and Lodging Association. But the association backs the proposed Florida compact with the Seminole tribe that would give the state a share of gambling revenue at the tribe’s casinos, including the Seminole Hard Rock in Hollywood.

“So long as it’s keeping [gambling] contained in one location, then we can support it,” said Dover, the association’s president. “When we start talking about gambling going all over Florida, our members say, `Wait a minute.’ ”

• Online hotel taxes: The hotel industry endorses a plan that would protect Expedia, Orbitz and other online travel agencies from paying lodging taxes on the full amount the sites charge travelers.

Because the sites secure rooms at a discount, they only pay Florida lodging taxes on those reduced prices. But lawsuits from some counties, including Miami-Dade, seek to have the sites charge travelers hotel taxes on the marked-up price. The online travel agencies claim the mark-up accounts for service fees and does not constitute a higher room rate subject to hotel taxes. (Hotels generally match prices on Expedia and Orbitz, but Florida collects fewer taxes on the rooms sold on those sites.)

The lodging association argues the new tax system would make Florida more costly to vacationers, and could force hotels themselves to collect the taxes the sites would be paying.

• Sun Life Stadium: Dover said she’s waiting for allies of the Miami Dolphins to file a bill that would allow Miami-Dade County to raise hotel taxes from 6 percent to 7 percent to fund about $200 million in renovations to Sun Life. Some of the funds would go to the Miami Beach Convention Center. Dover said the association would oppose the plan.

CONSUMER PROTECTIONS

• Investor fraud: For a third year, some lawmakers are hoping to pass a bill to strengthen Florida’s investor fraud laws, especially after another 800 complaints came in during 2009.

A bill sponsored by Bennett, the Republican senator from Bradenton, would give seniors, who are often victims of investment fraud, an unconditional refund within 30 days of purchasing an annuity and lower surrender penalties.

Bills would also prevent insurance agents whose licenses have been revoked from selling annuities. Agents who commit fraud as defined by the bill would face third-degree felony charges. Consumers can verify which licenses an agent holds by going to http://www.myfloridacfo.com/Data/AAR_ALIS1

• Debt collection: Several bills aim to rein in and regulate debt collectors after thousands of complaints about them were filed with the state in 2009.

SB 938/HB 311 would license debt settlement services, including taking fingerprints and doing background checks. SB 7054 would expand the authority of the attorney general to take action against out-of-state debt collectors under Florida’s Deceptive and Unfair Trade Practices Act.