EMPLOYER Summer 2005 • Vol. 5, No. 2

LegalReform Senate Backs Away from Meaningful Lawsuit Reform By Mary Ann Stiles and Tamela Perdue

lthough the Legislature spent lawyers classify as deep pockets will continue as long hours debating the merits of the targets for frivolous litigation. The legal What’s Inside Ameaningful legal reform, at the end of system’s economic toll will continue to rise. the session all that talk resulted in only a little By the end of 2003, that cost had risen to $246 Common Sense tinkering around the edges of the state’s civil billion or $845 for each person living in the The Vote Not Taken justice system. . Remember, every time a business by Jon L. Shebel The two chambers were a study in contrasts is sued, it incurs additional unexpected costs Why Business throughout this debate. Under the leadership even if it wins the lawsuit. To every citizen of Is Calling for a of Speaker Allan Bense (R-Panama City), the this state that means higher prices for the Special Session House of Representatives advanced a mean- products and services we use every day. by Barney T. Bishop III ingful legal reform agenda. The vehicle for Many Florida business owners and execu- that, HB 1513 by Rep. Don Brown (R-DeFuniak tives are joining together in a quest to solve the Personal ID Security Springs), would have leveled the playing field state’s tort problems. The scope of problems is and Business for all businesses and individuals by eliminat- vast, but Florida’s business leaders are united Obligations ing the unfair doctrine of joint and several and dedicated to working with the Legislature by Nick Iarossi liability, which requires one defendant to front over the next year to bring about significant Some Wins, the entire damage award if other defendants, change to protect Florida’s future. Some Losses even those that are more negligent, can’t afford by Keyna Cory to pay their share. Where Change is Needed HB 1513 also contained venue reforms and At the session’s onset, AIF released an agenda Water for the Future measures to protect sellers of products from of 23 different reforms that state business and by Keyna Cory liability, in certain situations, for damages industry leaders considered worthy of legisla- Caution Guides caused by a manufacturer. Although they had tive attention; asbestos and streetlight reforms Medicaid Reform the chance, the Senate never debated HB 1513 that passed were a part of that package.The key by Bob Asztalos and they never took it up for a vote, choosing concept that still requires the immediate atten- instead to weaken other legal reform measures, tion of the Legislature is the abolition of the Mixed Results forcing the business community to withdraw doctrine of joint and several liability. by Mark Flynn its support for those bills. Imposed on the state by the courts and not Session Business the Legislature, joint and several has been Report The Fight Must Continue mockingly called the “deep pocket” rule, Because the Legislature failed to enact com- because it lets plaintiff lawyers drag minimally AIF’s Lobby Team prehensive legal reform, businesses that plaintiff liable businesses into lawsuits because they

(Please see page 3)

A publication of ssociated Industries of Florida Service Corporation Common Sense

that a chamber of the Florida Legislature repealed joint and several. Now all we needed was a chance in the . Someone from AIF’s team of lobbyists made the case to every single senator: that true and meaningful tort reform cannot be accomplished without the passage of HB 1513. Then we The Vote Not Taken waited and looked forward to the debate among By Jon L. Shebel, Publisher the 40 men and women of the Florida Senate, many of whom we supported in their cam- fter 35 years as a lobbyist for Associated paigns. Who would cast votes in favor of a more Industries of Florida, the one lesson I’ve balanced legal system? A learned is that you never take a But on the one bill that employers across this legislator’s support for granted. When someone state wanted to pass, nothing happened. Not we count on votes against us, we may be one word of debate was spoken, not one vote disappointed but we still respect opposition recorded on joint and several liability in the based on conscience, knowledge, and the Florida Senate. It was as if the issue did not exist. interests of the legislator’s constituents. Since then employers from all over the Some members of the business community country have flooded my phone and e-mail have come to take for granted that a Republi- with the question: What happened? can-controlled Legislature automatically I’m not sure I can answer that, but I will say translates to a pro-business Legislature. While “Do not give up.” often true, it hasn’t always been the case on Many business people are frustrated and some of the most critical issues for Florida want to use the 2006 election to retaliate against employers. That was the case with workers’ legislators who did not stand up for a fair and compensation a few years ago, and this year balanced legal system. EMPLOYER with legal reform. Right now, though, we need cooler heads to There are a number of good and positive prevail so that we can achieve the goal we seek, Published by Associated Industries changes that need to be made in our legal which is a fair legal system. To that end, AIF is of Florida Service system, but let’s be clear. If Florida lawmakers supporting the call for a special session. We Corporation to inform really want to make a difference in the state’s encourage Gov. Bush, House Speaker Allan readers about issues pertinent to Florida’s legal system, they have to eliminate joint and Bense (R-Panama City) and Senate President business community. several liability. Tom Lee (R-Brandon) to reintroduce HB 1513, to © 2005. All rights We’re not asking them to take an unprec- make it available for debate and finally a vote. reserved. edented and risky step. In the past several Stay tuned. I believe that under the solid PUBLISHER years, 26 other states have recognized the error leadership of Gov. Bush, House Speaker Bense, Jon L. Shebel of their ways and repealed joint and several. All and Senate President Lee we will have an ASSOCIATE PUBLISHER of them, and some were our close neighbors, opportunity to find out which senators and Stephen B. Trickey boosted their economies by injecting evenhand- representatives want to give you relief and EDITOR edness into their court systems. Florida busi- those who are okay with you running your Jacquelyn Horkan nesses still labor under an irrational and unjust business with a target on your back for unwar- DESIGNER civil justice system. ranted and unfair lawsuits. Once we know that, J. Gregory Vowell In the Florida House, the courage of people then we can discuss how it will reflect in the EDITORIAL OFFICES like Rep. Don Brown and Speaker Allan Bense ■ 516 North Adams St. 2006 election season. Post Office Box 784 gave the business community all we really Tallahassee, FL wanted and that was a chance for the members Jon L. Shebel is chief executive officer 32302-0784 of the Florida House to cast a vote up or down of Associated Industries of Florida Phone: (850) 224-7173 Fax: (850) 224-6532 on the issue of joint and several liability. Thanks and affiliated companies E-mail: [email protected] to their leadership, 2005 was the first time ever (e-mail: [email protected]).

2 Employer Advocate • Summer 2005 Legal Reform

(from page 1) have the ability to pay awards that the truly and their attorneys have more opportunities to With an negligible cannot afford. organize attacks against businesses. Without ever-expanding This theory is applied to economic damages significant legal reform, no industry is safe. marketplace and in tort actions in Florida and has been problem- Gov. Bush needs the support of the House atic in cases where the primary or most respon- speaker and the Senate president to act now, to newly available sible defendant is bankrupt or otherwise call a special session for the sole purpose of technology, greedy judgment proof, as well as in cases where the enacting tort reform and ensuring Florida’s plaintiffs and their plaintiff settles with one defendant but subse- continued economic prosperity. attorneys have quently is awarded a greater amount of dam- more opportunities ages. In such instances the settling defendant is our legal reform proposals that did pass the still responsible for the difference between the F full Legislature were asbestos reform, to organize settlement amount and the award. liability protection for utility companies in attacks against This rule gives plaintiffs and their attorneys certain instances of streetlight malfunction, road businesses. incentives to search out the most financially builders’ protection and vicarious liability. viable defendant against whom a cause of action can be generated. This rule should be Asbestos Reform replaced with a system that holds the defendant HB 1019, the Asbestos and Silica Compensa- liable only for that portion of damages caused tion Fairness Act of 2005, by Rep. Joe Pickens by its own individual negligence. (R-Palatka), was co-sponsored by Reps. Dean Cannon (R-Winter Park), Jennifer Carroll (R- Why Act Now? Jacksonville), Dudley Goodlette (R-Naples), Florida citizens, including business owners Denise Grimsley (R-Sebring), Ed Homan (R- and executives, have elected government leaders Tampa), Dave Murzin (R-Pensacola), and John who realize that our current system, which Stargel (R-Lakeland). confers financial rewards upon the few, needs to Asbestos is a generic term for a family of be changed to ensure a fair and equitable demo- fibers that has been used for hundreds of years cratic government for all of Florida’s citizens. in thousands of materials preferred for its Gov. , the strongest advocate for the fireproof and flexible characteristics. In the business community, who called for significant 1960s, however, studies began linking asbestos tort reform throughout this legislative session, to several health conditions, most commonly leaves office at the beginning of 2007. asbestosis — a scarring of the lung tissue — and The time may never be better to achieve the mesothelioma — cancer of the pleural lining important goal of meaningful and lasting legal around the chest and abdomen. reform, and it may be that true reform can only Although state courts do not categorize cases be achieved during a special legislative session by type, making it difficult to ascertain the this summer. The time to act is now before the number of asbestos cases in state forums, balance of power in the legislative bodies shifts statistics from the federal courts are illuminat- to future leaders who may not be as conservative ing — and disturbing. From 1966 through the or inclined to tackle such an important issue. end of the 1970s, approximately 950 asbestos- The longer we wait, the longer businesses related cases were filed in federal courts.This will be stuck in these unpredictable situations. number rose dramatically in the first half of the Some businesses could afford to provide better 1980s, with approximately 10,000 cases filed benefits and wages to their employees, pass from 1980 to 1984. A lull in litigation occurred additional savings onto their customers, expand between 1995 and 1998, but by 1999 a new wave their operations, start new endeavors — if the of litigation began, primarily because the courts bottom line were better protected against allowed thousands of people to receive compen- frivolous lawsuits. sation even if they had no evidence of injury or With an ever-expanding marketplace and damage resulting from the alleged asbestos newly available technology, greedy plaintiffs exposure.T oday in South Florida, there are over

Employer Advocate • Summer 2005 3 Legal Reform

The asbestos 800 separate asbestos cases waiting to be tried One of the most significant problems caused litigation swamp — and bogging down the state court system. by this ruling has been the increased liability has bankrupted The asbestos litigation swamp has bank- utility companies face for streetlights that don’t rupted more than 70 American companies, and light, even if they have no knowledge or aware- more than 70 the resources from which truly injured indi- ness of the outage to make necessary repairs. American viduals may recover are dwindling. With these This decision has also had the predictable effect companies, and facts in mind, business advocates asked the that Florida utility companies have been forced the resources from Legislature to pass a bill that preserves re- to defend against frivolous lawsuits, incurring which truly injured sources and provides recovery for those who significant costs that undermine their ability to are truly injured by shutting off the spigot for provide service to Florida’s residents and individuals may those who have suffered no harm. The bill does businesses in the most cost-effective manner. recover are protect those who fear that they will develop Offering a comprehensive solution to this dwindling. symptoms later in life by basing the statute of problem is HB 135, sponsored by Rep. Dwight limitations on the actual onset of symptoms, Stansel (D-Live Oak) and cosponsored by Reps. rather than exposure as it is now. Kevin Ambler (R-Tampa), Dennis Baxley (R- HB 1019 requires plaintiffs to show actual Ocala), Dean Cannon (R-Winter Park), Larry physical impairment based on certainspecified Cretul (R-Ocala), Denise Grimsley (R-Sebring), medical criteria before they can bring an asbestos- Ed Homan (R-Tampa), Dave Murzin (R- related claim (this does not apply to those who Pensacola), William Proctor (R-St. Augustine), have been diagnosed with mesothelioma). It also Franklin Sands (D-Ft. Lauderdale), and John demands that plaintiffs provide evidence of Stargel (R-Lakeland). physical impairment before their cases can proceed. This bill provides protection to all utility After this bill becomes law, plaintiffs will also be providers from liability for damages affected by required to submit a sworn statement specifying the malfunction or failure of a streetlight unless the locations and dates for the alleged exposure. the utility company failed to maintain the light The bill prohibits any award of punitive in good condition. All utility providers must damages and prohibits any award based on the notify their customers of the designated proce- fear or risk of cancer in instances where the dures for the response to any and all notices plaintiff has not been diagnosed. that a light is not working.Once a utility This act will go a long way to restoring sanity provider receives actual notice of a non-work- to this area of law and business by ensuring that ing streetlight, it must make the repairs within those who are injured and truly sick will be 60 days, except in the case of natural disasters compensated while preserving resources for or weather related conditions beyond the those who become sick in the future. provider’s control, in which case additional time frames for repairs are specified. Effective Date: July 1, 2005 Senate vote: 32-8 Effective Date: Upon becoming law House vote: 103-13 Senate vote: 37-1 Final action: Pending House vote: 112-1 Final action: Pending Streetlights In 2003 the Florida Supreme Court ruled that Road Builders’ Protection a utility company had a legal duty to third Rep. Ray Sansom (R-Ft. Walton Beach) was parties, who are not their customers, for acci- the chairman of the House Transportation dents occurring in areas where street lights are Committee and primary sponsor of HB 1681. not working properly because of an alleged Although this bill addresses a myriad of trans- failure of the utility company to maintain the portation issues, for the business community its street light [Clay Elec. Coop. v. Johnson Inc., 873 most important feature is a limitation of legal So. 2d 1182 (Fla. 2003)]. (continued on page 20)

4 Employer Advocate • Summer 2005 Legal&Judicial

Why Business is Calling for a Special Session By Barney T. Bishop III

he number one issue for the business community during the 2005 Legislative T Session was reform of the civil justice system, or what is popularly called “tort reform.” Consequently, AIF and 48 other companies and associations created the Florida to try and get our political leaders to call a Coalition for Legal Reform (FCLR) to deal with special session. this very important issue. Special sessions focus lawmaker attention on Meeting every Monday throughout Decem- a limited menu of issues. Legislators will be ber, January, and February, the group crafted a impatient to get back to their businesses and 111-page bill outlining recommended changes families and vacation plans. Success doesn’t to Florida law.The cornerstone of the bill was always come quickly; the long, hot summer of the repeal of joint and several liability, a court- medical-malpractice reform in 2003 was proof of adopted doctrine that forces solvent defendants that. But if the groundwork is properly laid, a to pay for the wrongs committed by insolvent special session could give the business commu- defendants. We believe that this is unfair — nity much-needed relief from Florida’s civil- and our polling shows that most people agree justice nightmare. — but in Florida it’s the law. We have a challenge before us, but we can The House this past session did something turn that into an opportunity. We must be no legislative body has ever done in the history united if we ever expect to be successful. The of this state: it passed a bill that repealed joint business community has shown that we can and several liability. come together in the session. We have the That bill was sent to the Florida Senate and, governor on our side and the leadership of the despite the fact that Republicans control the House. Now, we must work the Senate. It will Senate handily, the bill was never even brought not be easy and it ain’t gonna be pretty, but our up for discussion. window of opportunity ends next May when We have a governor in Jeb Bush who made the 2006 session is over. Between now and then, tort reform a mainstay of his legislative we must be persistent and tenacious. agenda. W e have a House Speaker in Allan Let Gov. Jeb Bush and House Speaker Allan Bense who likewise made tort reform the Bense know you support a special session on linchpin of his agenda.The only missing party legal reform. Let your senator know that you’ll is the Senate. The unfortunate fact is that the be watching what he or she does. And watch plaintiff bar has successfully curried favor with out for news from AIF on all the developments certain key Republican senators who control in the months ahead. ■ the fate of legal reform. How do we counteract that? Our options Barney T. Bishop III is president of are to wait for the next legislative session in Associated Industries of Florida 2006, an election year, which lessens our and affiliated companies chances to accomplish anything meaningful, or (e-mail: [email protected]).

Employer Advocate • Summer 2005 5 Legal&Judicial

Personal ID Security and Business Obligations By Nick Iarossi

n response to the recent epidemic of security breaches whereby unauthorized persons ments. The bill provides that a person who Igained access to personal customer informa- maintains unencrypted computerized personal tion through company databases, the 2005 information on behalf of another business must Florida Legislature passed House Bill 481 by notify the business within 10 days if its system Speaker Pro Tempore Leslie Waters (R-St. security has been breached. The two companies Petersburg). This new law requires companies can then agree upon which company will send to notify consumers when their unencrypted notification to the affected consumers, if needed. computerized personal information has been If an agreement cannot be reached, however, the acquired by an unauthorized person. Sen. Dave company with the direct relationship to the Aronberg (D-Greenacres) carried the legislation consumer will be liable for the notification. in the Senate with the help of Sen. Skip Businesses with a primary or functional Campbell (D-Tamarac). federal regulator are exempt from the Florida A broad spectrum of businesses worked law if the federal regulator has established tirelessly with Rep. Waters, the Office of the security breach notification procedures. Attorney General, and the statewide prosecutor The legislation provides deadlines for to draft and lobby the legislation. There was a consumer notification of a breach. Late notifica- shared feeling among members of the business tions will be subject to civil penalties enforced community that they needed to take a proactive by the Department of Legal Affairs. role after it became apparent that legislators Effective Date: July 1, 2005 wanted to address the issue. The business Senate vote: 38-0 community wanted a fair and reasonable bill House vote: 112-0 that would protect consumers without placing Final action: Awaiting governor’s signature unnecessary burdens on businesses. Unlike similar legislation that passed in Fair Competition California, the new Florida legislation provides Most people believe that governmental entities for exemptions that clarify when notification is should limit themselves to services that the not required after a breach. These exemptions private sector cannot or should not provide, such were developed to prevent notification when a as police and fire protection. It’s a little known determination was made by the business main- fact, however, that many private sector compa- taining the computerized information that nies have to compete against governmental identity theft was an unlikely result of the breach. entities for business. Many governmental entities An entity that maintains data on behalf of are in the solid waste business and some are now another company must meet separate require- getting into the telecommunications business,

6 Employer Advocate • Summer 2005 using tax dollars to compete with taxpayers. Florida Adopts Model Act for For many years, AIF has supported legisla- Partnerships tion that would level the playing field when the By Mary Ann Stiles and Tamela Perdue private sector is forced to compete against a local government to provide certain services. In B 1056 by Sen. Ron Klein (D- Beach) 2000, AIF supported the efforts of the solid Sdeals with the formation, continuation and waste industry in the passage of the Fair dissolution of limited partnerships, based on Competition Act. In recent years the telecom- the model act developed by the National munications industry has tried to duplicate that Conference of Commissioners on Uniform State success, and this year the hard work paid off. Laws and modified by The Florida Bar to Rep. Frank Attkisson (R-Kissimmee) filed the accommodate Florida-specific issues. Governmental Authority Provision of Communi- This lengthy bill contains over 120 sections. cations Services Act of 2005, which was subse- For an overview of some of the bill’s important quently amended onto HB 1322 and enacted by sections, log onto AIF’s Web site (aif.com) and the Legislature. The bill prevents governments open the Information Center. from providing certain services, including high speed Internet access, cable service, or telecom- Effective Date: January 1, 2006 munications services unless a private sector Senate vote: 40-0 provider is not available. The governmental House vote: 112-0 authority must do research and hold public Final action: Awaiting action by governor hearings before providing such services. Effective Date: Upon becoming law Mary Ann Stiles and Tamela Perdue are Senate vote: 32-2 with the law firm of Stiles, Taylor & Grace, House vote: 111-4 of which Stiles is the founding partner. Final action: Signed into law by governor. Both are consultants to Associated Industries of Florida and Stiles serves Nick Iarossi is an attorney with Capital City as general counsel Consulting, a Tallahassee-based lobbying firm (e-mail: [email protected]; (e-mail: [email protected]). [email protected]).

The Florida Coalition for Legal Reform is a group of Florida companies and associations working together for reason, sanity, and equity in our state’s legal system.

Coalition members belong to every segment of Florida’s economy, employing millions of workers and serving residents and visitors alike. • We believe Florida deserves a legal system that treats defendants and plaintiffs impartially, one that makes sure the truly injured get the help they need without “Striving“Striving wasting time and money on cases that don’t belong in the courthouse. • We believe that Florida deserves a legal system that doesn’t drive up the cost of forfor anan goods and services simply to line the pockets of a few plaintiffs and their lawyers. • We believe that Florida deserves a legal system that protects citizens by punishing EquitableEquitable wrongdoers, not one that operates like a game of chance, dispensing justice by the luck of the draw, where companies have no way of knowing whether a court LegalLegal will find them negligent for something they are doing with all good intentions. • We believe that Florida deserves a legal system that is a model for the rest of the System”System” nation and the world. To find out more about the Coalition, log onto www.FlaLegalReform.com. Finance & Taxation

method. This opened the door for the Some Wins, Department of Revenue to define substitute communications as intercom systems, two-way radio systems, computer networks, and a host Some Losses of other devices that lawmakers never intended to tax as communication systems. By Keyna Cory No one realized the magnitude of the prob- lem until the Department of Revenue held a IT Florida later n the closing minutes of the 2005 Legislative workshop on August 1, 2003, to draft rules on estimated the tax Session, a united business community what was considered a substitute communica- gained passage of its top taxation priority tions system for the purposes of taxation. As could have cost I — repeal of the substitute communications the discussion went on the list of taxable items Florida businesses systems tax. grew longer and longer. IT Florida later esti- $200 million to For a piece of legislation that never received a mated the tax could have cost Florida busi- $500 million a year negative vote and enjoyed the full support of nesses $200 million to $500 million a year if enforced. Even individuals could have been if enforced. Gov. Jeb Bush, passage of SB 2070 was no easy task. It took a major push by the Coalition to forced to pay taxes on computer systems they Repeal the Substitute Communications Systems used in their homes. Tax, with its 47 members, ranging from small To make matters worse, Florida was the only businesses to the state’s largest associations, state in the nation with such a tax. Therefore, including Associated Industries of Florida (AIF). businesses were wary about relocating to Even organizations such as Florida TaxWatch, Florida because of the uncertainty of whether Enterprise Florida, and IT Florida joined the the substitute communication systems tax was efforts of the coalition to abolish this tax. going to be enforced and, if so, what would be This costly tax was inadvertently enacted included in the definition. Why would any five years ago when the Legislature embarked company want to relocate to Florida and on a major rewrite of Florida’s communications possibly have to pay up to 14 percent tax on its tax law to bring it up to date with the explosion internal communications systems? of technology choices. To correct the problem, the Florida House of The 2000 rewrite followed a 1985 overhaul Representatives unanimously passed HB 49 by when the term “substitute communications Rep. John Stargel (R-Lakeland) during the first systems” was added to the list of services week of the Legislative Session. Rep. Stargel’s subject to gross receipts and sales tax. In 1985 bill enjoyed bipartisan support with 58 co- most of the communications services we take sponsors. for granted today were not yet in existence; the In the Senate, supporters of the repeal land-line telephone was still the most common encountered several road blocks. Sen. Mike means of communication. Haridopolos (R-Melbourne) sponsored SB 818, The original intent of taxing substitute the companion to HB 49, with the bipartisan communications systems was to provide equal support of 23 co-sponsors. Unfortunately, that tax treatment on an in-house telephone system bill was never heard. Instead, Sen. Lee and telephone service purchased from a com- Constantine (R-Altamonte Springs), chairman mercial provider. By 2000, the tax’s potential of the Senate Committee on Utilities and scope had evolved along with innovations in Communications, amended his version of the communications technology. Those innovations repeal, SB 2070, so that it merely suspended were not properly addressed by the Legislature application of the tax for two years while when it defined taxable communications creating a task force to review the matter. services as those that transmit or route voice, At every committee stop along the way, Sen. data, audio, video or any other information or Constantine was asked by his fellow senators to signals by any existing or future medium or change his bill to a full repeal, but it was not

8 Employer Advocate • Summer 2005 Taxation With the positive fiscal situation in Florida, the business community had hoped to repeal some taxes that repress our state’s economy. In his state of the state address Gov. Bush men- tioned several taxes that were ripe for repeal. While the House supported his ideas the Florida Senate proved recalcitrant and chose not to back many of his proposals. The following is a report on the sales tax exemptions supported by AIF. until the final hours of the session that the bill was amended to include the full repeal and What Passed … returned to the House for final passage. SB 2070 as passed by the Legislature not only Sales Tax Holiday contains the repeal, but also creates a nine- HB 101 by Representative Ray Sansom (R-Ft. member task force to consider how communica- Walton Beach) continues a seven-year tradition tions services should be taxed. of exempting from payment of sales tax certain The task force is charged with studying the purchases of clothing and school supplies. This following issues: year’s Sales Tax Holiday will begin on July 23 • national and state regulations and tax and last through July 31, and will apply to items policies relating to the communications of clothing valued under $50 and school sup- industry, including the Internet Tax plies valued under $10. Passage of this bill Freedom Act represents a one-time savings of $35.5 million • levels of tax revenue that have been for Floridians. generated by state communications Effective Date: July 1, 2005 services taxes and whether future revenues Senate vote: 38-0 will be sufficient to fund government House vote: 112-1 services and bonds Final action: Pending • options for funding such services and bonded indebtedness if future revenues Repeal of the Intangible Personal from communications services taxes are Property Tax found to be insufficient or unreliable Currently Florida statutes impose two • affect of communications services taxes on different intangible personal property taxes. An Florida’s competitiveness annual (or recurring) tax is imposed at the rate • how changes in communications of one mill on the value of stocks, bonds, notes, technology affect the ability to design and other intangible personal property. A one- tax laws time (or non-recurring) tax is due on obligations • administrative burdens imposed on service secured by liens on Florida realty at the rate of providers two mills. The bill appropriates $100,000 for task force Individuals and businesses are currently members’ expenses and $500,000 to pay for obligated to pay the recurring tax on stocks, experts, consultants, and services needed to bonds, notes, governmental leaseholds, and carry out their mission. interest in limited partnerships registered with the Effective Date: July 1, 2005 Securities and Exchange Commission. Current Senate vote: 40-0 law provides an exemption from the recurring tax House vote: 116-0 of $250,000 for individuals and $500,000 for Final action: Signed into law couples. The law also provides a $250,000 exemp-

Employer Advocate • Summer 2005 9 Finance & Taxation

tion for corporations and other legal entities. ensures that corporations subject to Florida HB 963 by Rep. Fred Brummer (R-Apopka), corporate income tax can base their calculations as it passed the House, repealed the one mill on current IRS rules. If the Legislature had not recurring tax imposed on stocks, bonds, notes, passed this legislation, corporations would have and other intangible property. The Senate, had to keep two sets of records: one for Florida however, objected to a full repeal and reduced and one for IRS. the millage rate to 0.5 mills in SB 2348, by Effective Date: Upon becoming law Senator Mike Haridopolos (R-Melbourne), Senate vote: 40-0 which passed both chambers. House vote: 116-0 No change was made to the two-mill non- Final action: Signed into law recurring tax imposed upon mortgages and real estate transactions. AIF supported the repeal of the intangible … And What Didn’t tax. It is wrong to penalize businesses and individuals who save or invest their money. Exemption on Manufacturing Since only three other states have a similar tax, Machinery & Equipment it is imperative that Florida becomes competi- Florida currently has more than 16,000 tive by removing this flawed tax. While this manufacturing facilities and roughly 14,000 session’s tax cut is a positive step, we hope that of them employ no more than 10 workers. next year the Legislature can eliminate the last Although the per-employee numbers are low, 0.5 mil of the intangible personal property tax. these are high-paying jobs. Effective Date: January 1, 2006 HB 27, sponsored by Rep. Matt Meadows Senate vote: 28-11 (D-Lauderhill), and SB 2312, by Sen. Rod Smith House vote: 86-30 (D-Gainesville), would have provided a much- Final action: Pending needed boost to efforts to retain these facilities in our state while attracting new manufacturing Corporate Piggyback plants. Under current tax law, Florida charges Each year the Florida Legislature must enact sales tax on the machinery and equipment used legislation that adopts the federal income tax to make a product and again when the product code as the basis for application of the state’s is finished. This is not the case in neighboring income tax. The passage of SB 1798, sponsored states, including Georgia, where sales tax is by Sen. Jeff Atwater (R-North Palm Beach) only charged on the finished product, not on the equipment that makes it. The Meadows-Smith bills would have alleviated that burden by broadening an exist- ing sales tax exemption for industrial machinery and equipment purchased for use in an expand- ing facility. The Legislature in 1996 lowered the maximum amount of sales taxes a business had to pay on industrial machinery and equipment from $100,000 in taxes per calendar year to the current $50,000. The proposed legislation would have completed the phase out by providing a full, rather than partial, sales tax exemption if the business can demonstrate that the purchases would be used to increase productive output at the facility by at least 10 percent. The bill passed the House but died in the Senate.

10 Employer Advocate • Summer 2005 relates to e-commerce. Currently 39 states and the District of Columbia have adopted such For the most current legislation. Had it passed, this legislation would information on bill have put Florida businesses on equal footing status, visit with out-of-state companies who are selling www.flsenate.gov products to Florida’s residents via the Internet, mail order, etc., by requiring these entities to and www.myflorida collect and remit Florida sales tax to the Depart- house.com ment of Revenue. Florida businesses lose customers every day to these virtual shops because consumers are not being assessed sales tax on e-commerce purchases. Although Florida law requires consumers to pay such taxes, few are aware of the requirement. The House rejected the proposal and the bill died in the Senate. Many legislators believe if they pass this legislation they are voting for a tax increase or a new Internet tax. AIF argues, however, that it is not a new tax but rather a more efficient way to collect taxes that are already due to the State of Florida.

Repeal of the Drink Tax Sales Tax Exemption for Research HB 1803 by the Finance and Tax Committee & Development and Rep. Fred Brummer (R-Apopka) and SB SB 2362 by Sens. Rod Smith (D-Gainesville) 1658 by Sen. Mike Fasano (R-New Port Richey) and Mike Fasano (R-New Port Richey) would would have repealed the tax on the retail sale of have exempted from sales tax machinery and alcoholic beverages for consumption on the equipment used predominately — at least 50 premises of a business establishment. percent of the time — for research and develop- The 15-year old drink tax was reduced by one- ment. The bill allowed the Legislature to review third in 1999, and again by one-half in 2000. the exemption by July 1, 2015. Enterprise Currently the tax rates are 3.34 cents per 1 ounce Florida and the Office of Program Policy of spirits or 4 ounces of wine; 1.34 cents per 12 Analysis and Government Accountability ounces of beer; and 2 cents per 12 ounces of cider. (OPPAGA) would have been in charge of As you can see this is not an easy tax to calculate. studying the effects of the exemption and Many small restaurant owners claim they spend reporting back to the Legislature. more money calculating the tax than they actually Neither the House companion bill nor the remit to the Department of Revenue. Senate bill passed this session. AIF supported the repeal of this tax to eliminate the cumbersome, expensive, and Streamlined Sales and Use Tax regressive burden on both Florida’s hospitality SB 56 by Sen. Skip Campbell (D-Tamarac) establishment and Florida’s consumers. The would have brought Florida law into compli- House voted to repeal the tax but the measure ance with the provisions of the national Stream- died in the Senate. ■ lined Sales and Use Tax Agreement and allowed Florida to petition for membership in the Keyna Cory is the president of Tallahassee-based agreement. Public Affairs Consultants, Inc., and a legislative The bill adopted definitions and procedures consultant to Associated Industries of Florida. to streamline Florida’s sales tax system as it (e-mail: [email protected])

Employer Advocate • Summer 2005 11 Environmental Regulation

Protection and Sustainability Program. The growth management bill (see page 19) allocated for $100 million in funding for the program in Water FY2005-06 from documentary stamp tax rev- enue, with general revenue kicking in another $100 million. the Future The money will be disbursed as follows: • $100 million will be allocated for By Keyna Cory alternative water supplies • $50 million for the TMDL (Total Maximum Communities must or several years, the Florida Senate has Daily Load) program now incorporate made a study of state regulation of water • $25 million for the Surface Water supplies and any public policy adjust- Improvement and Management (SWIM) planned alternative F ments necessary to protect this vital natural Program water supply resource.In a statewide tour , the Senate Com- • $25 million for the Disadvantaged Small projects in their mittee on Natural Resources heard the concerns Community Wastewater Grant Program. comprehensive of those living in the northern part of the state In future years the distribution will be 60 that their water would be piped to the lower percent for alternative water supplies, 20 plans. half of the peninsula, while residents of South percent for TMDL, 10 percent for SWIM, and Florida were more concerned about growth 10 percent for small communities. management and how to incorporate water Communities must now incorporate issues into growth policies. planned alternative water supply projects in In the 2005 Legislative Session that time and their comprehensive plans. Planners must effort came to fruition, with the perseverance of also ensure that adequate water supplies will Sen. Paula Dockery (R-Lakeland).SB 444, one of be available to serve a new development at the last bills passed this session, embodies a the time the certificate of occupancy is comprehensive rewrite of state water law, issued. making numerous changes to the state’s re- With the passage of this legislation, along source development efforts. with the growth management bill, local govern- The bill defines the roles of local govern- ments will have to work in tandem with the ments and water management districts and how water management districts to make sure water they should work together in developing a will be available for Florida’s future. regional water supply plan as well as alterna- Effective Date: Upon becoming law tive water supplies. Some of the changes Senate vote: 38-1 include provisions for priority funding assis- House vote: 114-0 tance from water management districts for the Final action: Pending development of alternative water supplies and provisions to encourage the formation of Contamination Notification regional water supply authorities and multi- CS/HB 937 by Rep. Bill Galvano (R- jurisdictional water supply entities. Bradenton) was inspired when residents of Funding for projects is also addressed in this Tallavest, a community within his district, legislation. It provides that applicants seeking discovered dangerous contaminants had help with funding for alternative water-supply leached into the ground from a nearby piece of projects provide at least 60 percent of the cost of property. The residents then found out that the the project. Each water management district Department of Environmental Protection (DEP) must set a goal of matching 100 percent of the knew of the contamination three years before state funding provided to the district for they did. alternative water-supply development. A new Rep. Galvano’s bill outlines guidelines for funding program was created entitled the Water notification when the property owner or the

12 Employer Advocate • Summer 2005 person providing site rehabilitation of a con- makes a determination that cost-effectiveness taminated area discovers that pollution has and environmental benefits warrant the in- migrated beyond the boundaries of the prop- crease. erty. The person in charge then has 10 days to The rest of the clean up on the site would advise the Division of Waste Management at occur when the site’s priority ranking number DEP, via certified mail and on a form adopted comes due. By removing some of the contami- by DEP, of what has occurred. Within 30 days nated soil at the time the tanks are upgraded, after that, DEP is required to send a copy to all the overall cost to clean up the site may be less. owners of record for the affected land. Effective Date: July 1, 2005 DEP may collaborate with the Department Senate vote: 39-0 of Health to establish procedures for respond- House vote: 117-0 ing to public inquiries about health risks Final action: Signed into law associated with contaminated sites. The legisla- tion will also require DEP to send a notice to Florida Incentive-Based Permitting Act the chair of the school board if one of district’s Had it passed, HB 137 by Rep. Dwight schools sits on affected property. The school Stansel (D-Live Oak) would have given incen- board will then have the responsibility to notify tives to businesses that kept good compliance teachers and parents in a way prescribed by records with the Department of Environmental DEP rule. Protection (DEP). The incentives included Rep. Bill Galvano demonstrated a great longer duration of permits, fewer inspections, commitment to working with the business and an expedited renewal process. To obtain community on this bill. He had a tough time the compliance incentives, an applicant had trying to balance the needs of the business to request them as part of the permit community with the draconian, punitive — and application. unworkable — measures favored by environ- DEP has adopted the motto, “More protec- mental activists. Thanks to his negotiating skills tion — less process,” a concept embodied in the and patience, Florida now has a good law that Florida Incentive-Based Permitting Act. The will protect property owners and businesses. proposed legislation would have benefited Effective Date: September 1, 2005 companies who have been in existence for four Senate vote: 39-0 out of the past five years with a good compli- House vote: 115-0 ance record. Final action: Signed into law Opponents of the legislation aired mislead- ing statements in the media, calling the bill a Underground Petroleum Storage Tanks “get out of jail free” card for polluters, although The Florida Legislature unanimously ap- the bill did nothing to limit DEP’s authority to proved a bill that encourages owners of under- shut down a bad facility, or to inspect a com- ground petroleum storage systems to upgrade pany it believed was polluting. their tanks to secondary containment in ad- The legislation enjoyed tremendous support vance of the December 31, 2009 deadline. in the House but the Senate companion bill died Owners and operators have been reluctant to in committee. AIF hopes the Florida Legislature upgrade in advance of their site’s priority will consider this bill again next year so that cleanup number because of the threat of finding good stewards of Florida’s natural resources contamination not previously detected and can be rewarded. ■ therefore increasing cost. Owners and operators will now be paid Keyna Cory is the president of Tallahassee- $50,000 for a single facility to remove and treat based Public Affairs Consultants, Inc., and limited soil contamination associated with the a legislative consultant to Associated tank upgrades; the reimbursement could go as Industries of Florida. high as $100,000 in some situations if DEP (e-mail: [email protected])

Employer Advocate • Summer 2005 13 Associated Industries of

AIF lobbyists, representing centuries of accumulated experience in politics and government, spent more th

OFFICERS DEAR FLORIDA EMPLOYER: Jon L. Shebel 2Chief Executive Officer of Associated0 Industries of By standing up for your right to Florida and affiliated corporations ... more than succeed, free from government 36 years as a lobbyist for AIF ... directs AIF’s legislative efforts based on AIF Board of Directors’ intrusion and interference, Associated positions ... graduated from The Citadel and Industries of Florida helps companies attended Stetson University College of Law. like yours grow. For most of this century, wherever Barney T. Bishop III President of Associated Industries of Florida … and whenever governmental officials former President & CEO, The Windsor Group ... former aide to state Treasurer Bill Gunter … have met, Associated Industries has former executive director of the Florida Democratic made sure they listen to the voice Party … more than 26 years of experience in legislative and political affairs … B.S. in political of the state’s employers. & judicial communication from Emerson College We champion the value of hard in Boston. work and productive endeavor and Mary Ann Stiles, Esq. General counsel of Associated Industries of Florida the incentive offered by the ability ... managing partner in the law firm of Stiles, to make a profit. We make sure Taylor, & Grace, P.A. ... more than 32 years of legislative and lobbying expertise before the government officials understand the Legislature and other branches of government ... consequences of their actions on graduate of Hillsborough Community College, Florida State University, and Antioch Law School. the ability to succeed in Florida. Like it or not, the decisions made Chris Verlander in Tallahassee can make the Senior vice president — corporate development of Associated Industries of Florida ... more than 25 difference between success and years of expertise in insurance lobbying activities failure in commerce. When those ... former president (1994-1997) and vice chairman (1997-1999) of American Heritage Life decisions are made, Associated Insurance Company ... B.S. from Georgia Tech Industries speaks out on the side and M.B.A. from the University of Florida. of success. If your company does not belong CONSULTANTS to Associated Industries, please Robert P. Asztalos Lobbied on health care issues at both the state consider the benefits of joining. and Federal levels since 1985. Partner with the With your support, we can grow in Buigas, Asztalos & Associates and the Director of Governmental Affairs for Delta Health Group ... our mission to promote a vigorous directed the Nursing Home profession’s litigation reform campaign in 2000-2001 and served as the economy, filled with the promise of Director of the Heal Healthcare in Florida Coalition, abundance for every person who consisting of health care, business and consumer groups that advocated medical liability reform calls Florida home. legislation in 2003 ... Master’s degree in Legislative Affairs and a Bachelor’s degree in Political Science from George Washington University. Jon L. Shebel, CHIEF EXECUTIVE OFFICER of Florida 2005 Lobbying Team han 10,000 hours in the Capitol during the 2004 Legislative Session advocating for your business interests.

Ronald L. Book, Esq. Guy Spearman, Esq. 0 05Principal shareholder of Ronald L. Book, P.A. … President, Spearman Management, Inc., former special counsel in Cabinet and legislative government relations consulting firm ... 31 years affairs for Gov. … and formerly of experience representing a variety of clients worked for the Florida House of Representatives … from small to large ... graduate of Auburn 33 years of experience in government and University and Florida State University College legislative activities representing public and private of Law. entities including many Fortune 500 Companies … areas of expertise include legislative and governmental affairs with an emphasis on sports, Gerald Wester health care, appropriations, education, local Managing partner, Capital City Consulting, LLC ... government, insurance, and taxation … graduate former chief deputy over Florida Department of of the University of Florida, Florida International Insurance’s regulatory staff ... more than 29 University and Tulane Law School. years of lobbying experience ... expertise in insurance, banking, and health care issues ... Keyna Cory Bachelor’s and master’s degrees from Florida President, Public Affairs Consultants, a public State University. affairs and governmental relations consulting firm ... more than 20 years of experience representing Mike Zagorac a variety of clients, from small entrepreneurs to Former senior vice president, public affairs for Fortune 500 companies, before the Florida Hill & Knowlton, Inc. ... former vice president of Legislature ... majored in political science at the public affairs for the Jack University of Florida. and vice president of the National Association of Chain Drug Stores ... more than 36 years of Mark Flynn experience in media and public relations, Senior vice president, The Windsor Group and a community affairs, and environmental issues ... public affairs consultant for more than a decade ... Bachelor’s degree from Purdue University and former economic development executive with M.B.A. degree from American University. extensive experience representing business on a broad range of issues ... has also worked for both a member of Congress and a member of the Florida House of Representatives ... graduate from the University of South Dakota with a B.S. in mass communications. Tamela Ivey Perdue, Esq. “The AIF staff is extremely Shareholder with the law firm of Stiles, Taylor & Grace, P.A. … more than 13 years legislative and legal experience, most recently representing insurers and the business community on workers’ competent and highly respected compensation and other legal issues ... established legal practice specializing in workers’ compensation defense … formerly worked in the Florida Senate as one of the best lobbying including the Majority Office, Rules Committee and Committee on Ethics and Elections … B.S. from Lee University and J.D. from Stetson University. groups in Tallahassee, and is, Jim Rathbun President of Rathbun & Associates ... more than as a result, very effective in 16 years of experience representing individuals and entities before the Legislature, state agencies, and the governor and Cabinet ... formerly worked with the Florida House of Representatives and served as representing business.” staff director of the House Republican Office ... B.S. from Florida State University. Lance Ringhaver, President – RINGHAVER EQUIPMENT COMPANY HealthCare

Caution Guides Medicaid Reform By Bob Asztalos

The debate has fter bitter debate, pressure from major shown that, while health care and advocate groups, and expressions of fear from average Florid- the current system A ians, the Legislature chose to pursue a go-slow is too expensive approach to Medicaid reform by creating two and inefficient, the pilot programs that will be under tight legisla- people of Florida tive review. Nevertheless, this bill can lay the don’t want to rush foundation for restructuring Medicaid as a more vibrant and patient-centered program. into another 40- Nearly all involved with Medicaid agree that year mistake. the current system is flawed. Recipients are solving the problems that plague the current limited in where they can seek treatment. national system. Wary of the governor’s ambi- Providers are unhappy with excessive paper- tious approach, lawmakers opted for a compro- work and low reimbursement rates. Government mise bill that creates two pilot projects. officials fear that the costs are uncontrolled and The first is an integrated long-term-care pilot unsustainable. Consensus breaks down, how- for individuals over the age of 60 in two parts of ever, when the discussion turns to solutions. the state to be determined by the Agency for In March, Gov. Jeb Bush opened the legisla- Health Care Administration (AHCA). Nursing tive session by calling for bold reform of Medic- home care is outside the pilot unless AHCA can aid. He proposed a two-pronged approach that justify its inclusion. would establish Florida as a leader in moderniz- The second pilot will incorporate all health care ing the 40-year old Medicaid program. services under a managed care model and will be Senior Health Choices would have shifted conducted in Broward, Duval, Baker, Clay, and most program participants over the age of 60 Nassau counties. AHCA is directed to develop the living in specified areas of the state into man- plans and obtain the necessary federal waivers, aged care networks for their long-term-care but it cannot implement the pilots until the services, which include nursing home, home Legislature approves the final plans. health, and adult day care as well as other post- The debate has shown that, while the current acute-care services. The plan would have system is too expensive and inefficient, the severed the direct relationship between health people of Florida don’t want to rush into care providers and the state, which administers another 40-year mistake. Many involved in the the Medicaid program. Instead, managed care discussions want to make sure that managed organizations would manage the services and care will provide a solution before trusting it as payments and ultimately save the state money. the model for protecting access to quality care For Florida’s other Medicaid recipients, the for the state’s needy and vulnerable citizens. governor proposed a managed-care system Effective Date: July 1, 2005 benefit package tailored to their individual Senate vote: 39-1 needs. Participants would be given options, House vote: 88-24 such as establishing Health Savings Accounts Final action: Signed into law with basic or catastrophic benefit packages, as well as being able to select plans based on the Bob Asztalos is a partner with Buigas, Asztalos types of benefits offered. & Associates and a legislative consultant to These two plans, if implemented, would Associated Industries of Florida. have established Florida as a laboratory for (e-mail: [email protected])

16 Employer Advocate • Summer 2005 Economic Development

strictions and regulations on both existing zones and on the creation of new ones. According to the Mixed Results Florida Revenue Estimating Conference, these By Mark Flynn changes will reduce state and local investment in enterprise zones by $6.1 million in the coming fis- he 2005 Regular Session of the Florida cal year and by $15.3 million in 2006-07. Legislature produced mixed results in All existing enterprise zones shall cease to Tterms of economic development. The best exist on December 21 of this year, unless redes- news is the passage of a sweeping growth man- ignated before that date by OTTED. agement act. While it includes some controversial The bill also expands the responsibilities for provisions that may require further legislation be- enterprise zone development agencies created fore they can be implemented, the most important by enterprise governing boards. It gives them aspect of the legislation is the dedication of $1.5 standing to obtain development consulting billion in new money to state infrastructure. from Enterprise Florida and the University Part- The biggest disappointment for business in nership for Community Development. general was the Legislature’s failure to pass sig- Effective Date: July 1, 2005 nificant tort reform. The abolition of the doc- Senate vote: 39-0 trine of joint and several liability would have House vote: 116-0 been a boon for economic development in a Final action: Pending state that is home to a community ranked sev- enth on the American Tort Reform Association’s Appropriations list of “Judicial Hellholes.” The good news is that funding for QTI & Economic-development funding through the QDC is included in a budget line item with budget of the Office of Tourism, Trade & Eco- nearly $4 million more than last year. The bad nomic Development (OTTED) remained consis- news is that for the second year in a row, that tent, but key programs are still underfunded money must be shared with the High Impact and, in fact, continue to shrink as a percentage Performance Incentives (HIPI) program. Previ- of the total OTTED budget. The following are ously, HIPI had its own line item. In addition, a some of the key bills in the 2005 Session. new version of QTI for the aerospace industry has been added to the mix, with $3 million spe- Re-Enactment of Key Tax-Refund Programs cifically earmarked for that program. The sunset of the Qualified Target Industries The best guess for how the money will be di- (QTI) & Qualified Defense Contractor (QDC) vided may be indicated by what is anticipated in programs was extended from this year until June the budget for QTI local matching money, usually 30, 2010. HB 1483 also provides an exemption about 25 percent. If those numbers remain con- from performance standards for businesses im- stant, QTI could receive over $24 million. Under pacted by a named hurricane or tropical storm. that scenario $3 million would be left for HIPI The bill also provides that refunds exceeding with a few hundred thousand going to QDC. one-year’s appropriation are to be paid from The bottom line is that there is a couple of mil- funds allocated in the following year. lion more dollars available than there was last year. Effective Date: Upon becoming law For the second year in a row the Legislature Senate vote: 39-0 allocated $10 million for Florida’s Quick Action House vote: 112-2 Closing Fund, after leaving it unfunded in 2002 Final action: Pending and 2003. ■

Enterprise Zones Mark Flynn is senior vice president, The While HB 1725 delayed the expiration of the Windsor Group and a legislative consultant Florida Enterprise Zone Act until December 31, to Associated Industries of Florida. 2015, many of the bill’s provisions place new re- (e-mail: [email protected])

Employer Advocate • Summer 2005 17 IssueRoundup Session Business Report

Constitutional Amendment Reform will be a significant step forward. The political Hoping to capitalize on a fresh start and new viability of reform is a matter than remains leadership, the business community asked untested. Therefore, the business community lawmakers to address the process whereby must continue its efforts to protect the sanctity of Florida’s constitution can be amended. The the state constitution even if it means making the business community has long advocated initiative process more difficult. making the process more difficult, noting that HB 1723 our state’s foundational document has been Effective Date: Upon passage by voters hijacked by special interest groups. Senate vote: 37-3 A menu of proposals was introduced in both House vote: 86-30 legislative chambers — similar to the proposals Final action: To be placed on next general that died during the final hours of last year’s election ballot session. Rep. David Simmons (R-Altamonte Springs) and Sens. Jim King (R-Jacksonville) Ethics and Elections and Jeff Atwater (R-North Palm Beach) wanted Although the state fared better in the after- to offer three sets of reform provisions to voters math of the 2004 presidential election than it in the 2006 election. While the measures seemed did during the 2000 debacle, several incidents on the fast track, they ultimately stalled in the prompted lawmakers to undertake some reform Senate. in the area of election law. Only one of the three proposals was eventu- The reforms were spread across three sepa- ally enacted, HB 1723 by Rep. Simmons, which rate pieces of legislation, HB 1567 by Rep. Ron requires a 60-percent approval rate for proposed Reagan (R-Naples) and HB 1589 and 1591 by amendments. This higher threshold would Rep. Don Brown (R-DeFuniak Springs). apply to any amendment placed on the ballot, The bills raised spending caps in a whether it arrive via citizen initiative, the governor’s race from the existing $6.3 million to Legislature, revision commission, or constitu- $20 million (Cabinet candidates can now spend tional convention. up to $10 million each). They increased the Of the two failed reform bills, one would buffer zone between voters and campaign have limited the subjects that could be ad- workers from 50 feet to 100 feet and limited dressed through citizen initiative by requiring early voting to eight hours a day on weekdays Florida Supreme Court review to ensure that an and a total of eight hours each weekend. This amendment fell into one of the following last provision will have a significant impact on categories: how Floridians can vote. In 2004, voters could • amend or repeal an existing section of the begin casting their ballots 15 days before the Constitution on the same subject and primary and the general elections. More than 2 matter million Floridians voted early or by absentee • address a right related to Article I of the ballots, nearly two and half times the number of Florida Constitution people who voted by absentee ballots in 2000. • change the basic structure of state HB 1589 eliminated the second primary, an government as established in Articles II election that occurs when no single candidate in through V of the Florida Constitution a primary wins a majority of the vote. The The other bill would have required a two- Florida Legislature suspended the second thirds vote for constitutional amendments with primary in 2002 and 2004, as a result of pressure a fiscal impact greater than .02 percent of the from federal officials, who believed there was state’s general revenue. simply not enough time during the allotted nine Adoption of the ratification-threshold increase weeks to hold three elections. The second

18 Employer Advocate • Summer 2005 HB 1591 Effective Date: Contingent Senate vote: 39-0 House vote: 116-0 Final action: Pending

Growth Management SB 360 by Sen. Mike Bennett (R-Bradenton) tackles current and future growth management challenges within Florida. It appropriates $1.5 billon in new money for various transportation, water, and school infrastructure programs. The bill places multiple requirements on local governments to ensure all new develop- ments adequately meet level-of-service stan- dards and that financial means are available to meet any infrastructure needs. While AIF supports the concept of developers paying for primary was scheduled to return for the next the impact of their development, this bill raises cycle if legislators did not take action. some concerns about how it puts the concept AIF supports the elimination of the second into practice. A development, for example, primary and applauds the Legislature for its could be found not in compliance with financial action. Adoption of this legislation will give feasibility capital improvement elements supervisors of elections and their staff an appro- because a local government has allowed a priate amount of time to do their jobs efficiently backlog of projects to develop. Developers and will allow voters to better concentrate on could thus be stuck with either footing the bill candidates and the issues. This legislation should to bring the county up to date, thereby driving go a long way to ensure that votes are counted in up the cost of development as a whole, or new a timely and efficient manner. developments could simply be halted until the Legislation was also introduced to help local government addressed all of its infrastruc- Florida meet the January 1, 2006 federal dead- ture shortfalls. Neither solution bodes well for line for states to comply with the Help America Florida’s economy. Vote Act (HAVA). HAVA, enacted in 2002, was Additional restrictions on new development designed to establish minimum election admin- include requirements to ensure adequate water istration standards for states and units of local supplies before a certificate of occupancy can be government with responsibility for the adminis- issued. The measure requires that adequate tration of federal elections. school facilities be in place or under actual construction within three years after the issu- HB 1567 ance of final subdivision or site-plan approval. Effective Date: January 1, 2006 All transportation facilities must be in place or Senate vote: 29-9 under actual construction within three years House vote: 82-36 from the local government’s approval of a Final action: Pending building permit or its functional equivalent. The bill does provide developers with HB 1589 proportionate share alternatives to ease the Effective Date: January 1, 2006 burdens placed on them. They are only required Senate vote: 33-5 to pay their development’s fair share of impacts House vote: 81-26 on the community, but the definition of propor- Final action: Pending tionate share is rather vague and needs to be

Employer Advocate • Summer 2005 19 IssueRoundup

To get the further defined to protect developments from review into growth management reform. whole story being gouged by local governments to pay for While AIF supports many concepts within additional community needs not directly on the this package, the rule-making, implementation, related to their development. and legislative amendatory process will play a 2005 Session, In addition the bill creates multiple commis- crucial role in how this measure impacts devel- check out AIF’s sions and task forces to review Florida’s growth opment within the state of Florida. Both Sen. other reports: management policies including a Florida Bennett and House sponsor Rep. Randy Impact Fee Review Task Force. This task force Johnson (R-Winter Garden) have publicly stated Voting Records will be composed of 15 members charged with that a glitch bill is needed to address many of Champions surveying and reviewing the current use of these concerns and AIF looks forward to For Business impact fees and case law controlling the use of working with them during the 2006 Legislative impact fees. The task force shall provide a Session to make the appropriate changes. report to the governor and Legislature by Effective Date: July 1, 2005 February 1, 2006. AIF supports the review of Senate vote: 40-0 impact-fee-collection methodology and com- House vote: 98-20 mends the Legislature for incorporating such a Final action: Pending

(from page 4) liability for road builders and contractors. In Current law limits vicarious liability of owners the past courts have held road-building compa- of motor vehicles who lend a car to a person. nies liable for damages even when the contrac- This law expands the scope of the protections to tor met all state-mandated specifications and subsidiary rental or leasing companies and the criteria and there was no flaw in the workman- holder of a motor vehicle title or an equity ship or design of the project. This bill exempts a interest in a motor vehicle title if the title or contractor from liability for personal injury, equity interest is held under, or to facilitate, property damage or death arising from the asset-backed securitization of a fleet of motor performance of the contract work if, at the time vehicles used solely in the business of renting or of the accident, the contractor was in compli- leasing motor vehicles to the general public and ance with Department of Transportation’s under the dominion and control of a rental applicable contract documents. The bill also company in the operation of such rental provides that when death, injury, or damage company’s business. results from a motor vehicle crash within a The bill limits the liability of the aforementioned construction zone in which a driver was under companies for the operation of the vehicle or the the influence of drugs, it is presumed that the acts of the operator to a maximum of $100,000 per driver’s operation of the vehicle was the sole person, $300,000 per incident for bodily injury, and proximate cause of the death, injury or damage. up to $50,000 for property damage. Both provisions create a more fair and balanced Effective date: July 1, 2005 approach to the legal problems facing Florida’s Senate vote: 38-0 businesses. House vote: 116-0 Effective date: Upon becoming law Final action: signed into law Senate vote: 39-0 House vote: 116-0 Mary Ann Stiles and Tamela Perdue are Final action: Pending with the law firm of Stiles, Taylor & Grace, of which Stiles is the founding partner. Vicarious Liability Both are consultants to Associated Rep. Allan Hayes (R-Umatilla) also took a Industries of Florida and Stiles serves leading role in helping the business community’s as general counsel efforts this year by filing HB 551 relating to (e-mail: [email protected]; vicarious liability for rental car companies. [email protected]).

20 Employer Advocate • Summer 2005