Florida Government and Politics Weekly Update

12 April 2010 Publication
Authors: Robert H. Hosay Thomas J. Maida

Public Policy News Alert

Public Education: Education Reform Package Passes Both Chambers
On April 8 and 9, 2010, the Florida House passed a series of public education proposals that had passed the Senate earlier in the legislative session. The most controversial part of the package, SB 6 by Sen. John Thrasher (R-St. Augustine), revising teacher contracts and providing for merit pay, passed the House by a vote of 64-55 at 2:25 a.m. on April 9, 2010, after more than nine hours of floor debate.

SB 6 sets five percent of a school’s funding aside as a separate performance pay fund. The fund would be used to enhance a teacher’s salary based on learning improvement by the teacher’s pupils as measured by performance on standardized exams and also based on such factors as the teacher's classroom management, subject mastery, and advanced degrees. The bill also ends the practice of automatic renewal of teachers’ contracts, but the abolition of tenure applies only to teachers hired after the bill goes into effect. The bill had been similarly controversial in the Senate, where it passed on March 24 by a 21-17 vote.

The bill was delivered to Governor Charlie Crist on April 9, 2010. He has until April 16, 2010 to sign it, veto it, or allow it to become law without his signature. Several comments made by the governor before the House passed the bill indicate that he is considering a veto.

On April 8, 2010, the House passed a joint resolution, SJR 2 by Sen. Don Gaetz (R-Niceville), to revise the class-size constitutional amendment that Florida voters originally adopted in 2002. The House passed the proposal by a party-line 77-44 vote. SJR 2 had passed the Senate on March 25, 2010 on a vote of 26-12. The proposed constitutional amendment will appear on the November 2010 general election ballot.

The 2002 amendment, which required the state to spend more than $16 billion to hire new teachers and build new classrooms, has been phased in over the last eight years. Beginning with the next school year, it will require compliance to be measured class-by-class, rather than on the basis of schoolwide averages. More than 30 percent of classes at all levels are currently out of compliance with class-size limits on a per-classroom basis.

If the voters adopt the amendment, the current limits will continue to apply on a schoolwide average basis, and additional per-classroom limits will be added. In kindergarten through third grade, the average limit will be 18 and the per-classroom limit will be 21; in grades four through eight, the average limit will be 22 and the per-classroom limit will be 27; and in grades nine through 12, the average limit will be 25 and the per-classroom limit will be 30.

The third component of the education package, SB 4 by Sen. Nancy Detert (R-Venice), expands the list of courses required for high school graduation and institutes a program of end-of-course examinations, and phases out the FCAT examinations in math and science. The bill passed the House on April 8, 2010 by a 106-12 vote. Previously, it had passed the Senate by a vote of 36-1.

On April 8, 2010, the House also gave final passage to a measure that will increase the Florida Tax Scholarship Program, which currently provides more than 25,000 students with a $3,950 scholarship to attend private school. The scholarships are funded by contributions from businesses, which receive tax credits in return. Under SB 2126 by Sen. Joe Negron (R-Stuart), the cap on funding for the program is raised, the scope of tax credits is expanded, and the amount of the scholarship will increase gradually until it equals 80 percent of public school per-pupil funding.

Politics: Marco Rubio Raises $3.6 Million for His U.S. Senate Campaign in the First Quarter; Gov. Crist Denies Rumors of an Independent Run
Former Florida House Speaker Marco Rubio (R-Miami) reported that he has raised $3.6 million in the first quarter of 2010 for his U.S. Senate campaign. He is running against Gov. Crist in the Republican primary for the Senate seat currently held by appointed Republican Sen. George LeMieux.

Gov. Crist, who maintained a strong lead in fundraising throughout 2009, reported that he had raised $1.1 million in the first quarter of 2010.

In recent days, rumors have surfaced indicating that Gov. Crist was considering running for the Senate as an Independent or No Party Affiliation candidate. On April 8, 2010, the governor attempted to stop those rumors when his campaign manager, Erik Eikenberg, released an announcement stating, “To put these rumors to rest once and for all, as we have said countless times before, Governor Crist is running for the United States Senate as a Republican. He will not run as an Independent or as a No Party Affiliation.”

The filing deadline for the Senate race is April 30, 2010 at 12 noon.

Gaming: Senate Hears Bill to Ratify New Seminole Gaming Compact
Moving to implement the latest version of a gaming compact between the state and the Seminole Tribe of Florida, the full Senate took up SB 622 by Sen. Dennis L. Jones (R-Seminole) for second reading on April 8, 2010. The bill is scheduled to come before the Senate for final passage on April 15, 2010.

If the bill passes both houses as expected, it will provide $437.5 million in additional funds for the 2010 – 2011 state budget. This amount includes revenue from Seminole gaming operations going back to the original 2007 gaming compact that have been held in escrow as well as expected revenues from the first year of operation of the new compact.

The 20-year compact guarantees at least $1 billion in payments to the state over the first five years of operation. It allows the tribe the exclusive authority to operate banked card games such as blackjack in Florida, but limits the games to five casinos: Coconut Creek, Hard Rock-Hollywood, Hollywood-Classic, Immokalee, and Hard Rock-Tampa. The tribe would be able to operate Las Vegas-style slot machines (known as Class III slots) at all seven of its existing facilities. The right to operate Class III slot machines would be exclusive except for Broward and Miami-Dade Counties, where parimutuel facilities are currently allowed to operate the machines.

The bill also attempts to reduce the competitive impact on parimutuel facilities by allowing no-limit poker at card rooms, extending hours of operation, allowing video bingo and historic race machines, and reducing taxes and fees.

Similar legislation passed the House Select Committee on Seminole Indian Compact Review on April 7, 2010 by a vote of 15-3.

Utility Regulation: Public Service Commission Reorganization Continues to Move in the House But Faces Senate Opposition
On April 9, 2010, the House Full Appropriations Council passed HB 7209, Rep. Steve Precourt’s (R-Orlando) proposal to restructure the Florida Public Service Commission (PSC). Under the proposal, most of the PSC staff would be moved to a new Office of Regulatory Staff under the governor and cabinet, and the Office of Public Counsel, which is currently attached to the Legislature, would be moved to the attorney general’s office. The stated intent is to split the decision-making and advocacy functions of the PSC so the commission becomes an independent and impartial decision maker, assisted by professional and technical advisory staff, while the Office of Regulatory Staff's role would be to employ the services of professional and technical staff to advocate for the public interest in proceedings before the PSC and proceedings related to matters within the PSC’s jurisdiction.

The bill also includes revised ethical standards and limits on ex parte communications with the PSC and its advisory staff.

On the second day of the legislative session, the Senate approved its PSC reform bill, SB 1034 by Sen. Mike Fasano (R-New Port Richey). The House bill and the Senate bill contain similar ethical standards and limits on ex parte communications, but the Senate bill does not restructure the PSC. Sen. Fasano has stated his opposition to the House proposal, saying that the restructuring “was probably written by the utility companies.”

Campaign Finance: Gov. Crist Vetoes Campaign Finance Bill
On April 6, 2010, Gov. Crist issued his first veto of the 2010 legislative session, vetoing a campaign finance bill, HB 1207 by Rep. Seth McKeel (R-Lakeland), that was a top priority for Republican leadership in both chambers.

The bill would have reinstated so-called leadership funds, campaign accounts that were under the control of legislative leaders, which have been prohibited since 1989. It also would have created new reporting requirements for electioneering communication organizations (the Florida version of 527 organizations).

The governor’s action was harshly attacked by key Republicans, including Senate President-Designate Mike Haridopolos (R-Melbourne), Ways and Means Chair Sen. JD Alexander (R-Lake Wales), and Majority Leader Sen. Alex Diaz de la Portilla (R-Miami). The veto won the praise of House Minority Leader Rep. Ron Saunders (D-Key West) and Sen. Dan Gelber (D-Miami Beach).

Property Insurance: Another Florida Property Insurance Insolvency Announced; Gov. Crist Threatens to Veto Property Insurance Legislation
On April 7, 2010, the Florida Office of Insurance Regulation declared Northern Capital Insurance Company, a Florida-based property insurer, to be “insolvent and in hazardous financial condition.” The company had been under the administrative supervision of the Office of Insurance Regulation since May 29, 2009. The company is expected to be placed into receivership and all of its policies are expected to be cancelled shortly after the entry of an order of liquidation.

Northern Capital was formed as a “take out” company to remove property insurance policies from the state-created Citizens Property Insurance Corp. The company took over approximately 14,000 Citizens policies in 2008 and 7,000 in 2009. It reported an underwriting loss of $25.6 million at the end of 2009 and an additional loss of $7.3 million in the first two months of 2010. By the time the company was declared insolvent, the Office of Insurance Regulation found that its surplus had shrunk to $3.9 million and its reserves were $6.4 million less than required.

Regulators blamed the insolvency on the company’s large concentration of risk in South Florida.

The office had previously announced that another take out company, Magnolia Insurance Co., was in administrative supervision. Three Florida insurers were placed in receivership in 2009.

In a separate property insurance development, Gov. Crist threatened to veto any property insurance legislation that allows insurers to raise rates. “This is the last time that people need to have property insurance go up. If there is any legislation that comes to my desk that would do that, I will veto it and happily do so,” he said. Asked whether he thought legislators would override the veto, the governor said, “I can’t imagine how many members of the House and Senate would want to override a veto that reduces property insurance. They would do so at their own peril.”

In 2009, Gov. Crist vetoed a bill that would have provided limited deregulation for property insurance rates. Several bills currently moving through the Legislature would allow limited rate increases without regulatory approval or would otherwise affect the calculation of property insurance rates.

 


Public Policy News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this alert or would like to discuss these topics further, please contact your Foley attorney or any of the following individuals:

Marnie George
Tallahassee, Florida
850.513.3398
marnie@thegeorgegroup.com

Michael P. Harrell
Tallahassee, Florida
850.513.3373
mharrell@foley.com

Robert H. Hosay
Tallahassee, Florida
850.513.3382
rhosay@foley.com

Jonathan P. Kilman
Orlando, Florida
407.244.3256
jkilman@foley.com

Thomas J. Maida
Tallahassee, Florida
850.513.3377
tmaida@foley.com

Leonard E. Schulte
Tallahassee, Florida
850.513.3380
lschulte@foley.com

Marnie George of The George Group assists Foley on a variety of government and public policy matters as a consultant.

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