2014 legislative end of session report:
Sadowski and homeless funding among victories
The last time lawmakers directed Sadowski Affordable Housing Trust Funds to housing and not general revenue, Florida upset Ohio State to win the BCS Championship and Apple introduced the iPhone.
It's a different story this year. For the first time in seven years, a significant amount of money collected for the Sadowski Funds from a portion of doc stamp taxes will go toward housing. It was one of several victories for Florida Realtors during the 2014 legislative session which ended May 2.
"When the state faced a budget shortfall, legislators felt the need to sweep Sadowski monies into general revenue," said John Sebree, Florida Realtors' chief lobbyist. "This year, there was a $1.2 billion budget surplus. It's a huge victory for Florida Realtors, for the property owners who pay doc stamps and, most importantly, for the thousands of Floridians, many of them school-age children, who benefit from housing funds."
Of the $167 million appropriated to the Sadowski Funds, lawmakers directed $100 million to the State Housing Initiative Program (SHIP) and $67.7 million to State Apartment Incentive Loans (SAIL). SHIP provides money to refurbish existing homes for low-income families and provides down payment assistance and lease-purchase assistance. SAIL provides rental assistance.
Here's how Florida Realtors' other top initiatives fared this session:
Help for the homeless. Florida Realtors 2014 President Sherri Meadows made homelessness a priority this year, and the association advocated for legislation that provides housing for extremely low-income and homeless populations by funding local homeless coalitions. HB 979 by Rep. Kathleen Peters (R-St. Petersburg) establishes challenge grants for local homeless coalitions, nonprofits and other agencies that assist the homeless, and will also provide these agencies with training and technical assistance. The Senate companion bill, SB 1090 by Sen. Jack Latvala (R-Clearwater), included a dedicated revenue source for homeless programs through the Department of Children and Families. While this provision didn't make it into the final legislation, the 2014-2015 state budget provides $4 million for homeless programs. Effective July 1, 2014.
Post Biggert-Waters: Developing a private flood insurance market. Despite recent reforms at the federal level to slow flood insurance rate increases resulting from Biggert-Waters, legislation passed by Congress in 2012 to reform the National Florida Insurance Program (NFIP), Florida Realtors and other business groups sought an alternative to the NFIP at the state level. SB 542 by Sen. Jeff Brandes (R-St. Petersburg) encourages private insurers to enter the Florida market by giving them rate-setting flexibility and reduced regulatory burdens. Early on, the House and Senate disagreed on how much flexibility to give insurance companies on the amount of coverage required. In the end, SB 542 specifies four types of flood insurance policies: one that mirrors NFIP coverages; one called "preferred" which requires replacement costs for contents, not the structure; one labeled as "customized," (to be defined by the Office of Insurance Regulation), and a fourth policy that would wrap around NFIP coverage, i.e., "supplemental" coverage.
Nowhere in the bill does it require the purchasing of replacement cost for structures. Florida Realtors is conferring with Florida's Office of Insurance Regulation, the NFIP and Federal Emergency Management Association to clarify the coverage requirements on structures/contents to understand what this new Florida law really means. Effective upon becoming law.
FIGA reforms fall at last minute. This is the second year that Florida Realtors lobbied for reforms to the Florida Insurance Guaranty Association (FIGA), a nonprofit corporation that pays claims on behalf of insolvent insurance companies. HB 375, an omnibus insurance bill by David Santiago (R-Deltona), would have allowed FIGA to collect assessments in monthly installments if it has enough funds to pay claims for six months or more. This was important to insurance companies considering writing policies in Florida, because unexpected assessments reduce a company's surplus and the funds available to pay its own claims.
Funding for water quality projects. With the goal of developing a comprehensive statewide water plan in 2015, the state budget earmarks $167.8 million for Lake Okeechobee, Indian River Lagoon and Everglades cleanup projects. When waters in Lake Okeechobee rise to dangerous levels during the rainy season, the U.S. Army Corps of Engineers releases the excess water — often polluted with toxic algae — into nearby rivers and estuaries. This money will help pay for reservoirs, muck removal, elevated bridges to restore Everglades water flows south of the lake and research. Additionally, lawmakers approved $25 million for springs restoration.
A state study, but no lowering of sales tax on commercial leases this year. Gov. Rick Scott's $500 million tax cut package earmarked $100 million toward a phase-out of the current sales tax on commercial leases. He understood that being the only state to impose such a tax puts Florida businesses at a competitive disadvantage with neighboring states and online retailers. Florida Realtors sought to lower the rate from 6 percent to 5 percent beginning in 2014. But the Legislature wanted broad-based tax cuts, so $395 million was dedicated to lowering vehicle registration and title fees. You can imagine the competition for a piece of the remaining $105 million. In the end, negotiators from both chambers settled on three sales tax holidays — back-to-school supplies, hurricane supplies and energy-efficient appliances — and tax breaks for child car seats, children's bicycle helmets and college meal plans. Off the list: a reduction in the sales tax on commercial leases. However, the House Speaker pledged to order a comprehensive state analysis on lowering the commercial lease sales tax in advance of the 2015 legislative session.
Other real estate-related bills that passed:
Further reductions to Citizens' size and risk. The 2013 Legislature took big steps toward shrinking the state's insurer of last resort. The list of action items remaining in this year's main Citizens bill, SB 1672 by Sen. David Simmons (R-Altamonte Springs), isn't quite as ambitious but will have an impact. Starting this July, Citizens will no longer write new multi-peril policies on condo buildings. It will, however, offer new wind-only policies. Another provision in the bill prevents contractors from rebating all or a portion of the deductible to the policyholder. This is aimed at curbing fraud, which is a felony. Effective July 1, 2014.
Protecting consumers from post-claim underwriting. SB 708 by Sen. Aaron Bean (R-Jacksonville) creates a "Homeowner Claims Bill of Rights" to help protect policyholders from having their policies canceled and claims denied illegally. The legislation seeks to stop a practice known as "post-claim underwriting" used by a large Florida insurer to avoid paying claims. Example: A home burns to the ground due to an accidental fire. The policyholder files a claim. Accidental fire is clearly covered by the policy, but the claim is denied because, years earlier, a family member answered a question on the application incorrectly. The Bill of Rights also explains the claim-filing process and informs policyholders of possible unscrupulous practices used to deny claims. Insurers will be required to complete the underwriting process in 90 days and may not deny a claim and/or cancel a policy based on the insured's credit information after their policy has been in force for 90 days or longer. Effective July 1, 2014.
Expanded duties for Community Association Managers (CAM). Despite opposition from the Florida Bar, which petitioned the courts in 2012 to define many CAM activities as the unauthorized practice of law — a third-degree felony — lawmakers approved HB 7037. The House committee bill, filed by Ross Spano (R-Dover), allows CAMs to complete certain association forms created by statute or by a state agency, calculate and prepare assessment and estoppel certificates, negotiate financial terms of a contract on behalf of a Homeowners' Association and draft pre-arbitration demands. Florida Realtors supported an amendment on the House floor to prevent management companies from imposing additional charges incurred when collecting delinquent assessments. Effective July 1, 2014.
New disclosure for new home construction. This disclosure is in response to an investigation of the nation's largest homebuilder, which had retained oil, natural gas, water and other mineral rights beneath thousands of Tampa-area homes without properly notifying buyers. HB 489 by Rep. Ross Spano (R-Dover) impacts sellers who have retained, or will retain, subsurface rights of new homes and lots where a new home will be constructed pursuant to a contract with the seller. In these instances, sellers must provide a specific notice at or before the execution of a sales contract stating that the transaction does not include subsurface rights. The original legislation required this disclosure where subsurface rights had been severed or retained by any previous owner of residential property, and gave buyers three days after the contract was signed or deed was executed to rescind the offer. Florida Realtors worked with Rep. Spano to remove these requirements. Effective October 1, 2014.
Local governments regain some "home rule" powers over vacation rentals. In 2011, the Legislature passed legislation prohibiting local governments from regulating, banning or creating new rules specific to short-term rentals. The industry grew — 17 million Florida tourists stay in a rental home, according to the industry's trade group — and so did the size of rental properties. In some communities, large homes with many bedrooms are being rented out to multiple families, creating a hotel-like atmosphere. SB 356 by Sen. John Thrasher (R-St. Augustine) empowers local governments to enact ordinances specific to vacation rentals, such as noise, parking and garbage. However, local governments may not pass ordinances that prohibit vacation rentals or regulate their duration or frequency. Effective July 1, 2014.
- $4 million from the State Housing Initiative Program (SHIP) to the Department of Children and Families for homelessness programs
- $14.7 million tax incentive to Habitat for Humanity
- $3.56 million for homeless grants
- $505,000 for a statewide Homeless Advocacy and Affordable Housing Campaign
- $1.5 million for regional housing initiatives
- Up to $500,000 to combat unlicensed real estate activity
- $650,000 to complete the Department of Health's Florida Onsite Sewage Nitrogen Reduction Strategies study
- $57.5 million to Florida Forever, the state's conservation land acquisition program
Initiatives that failed:
A requirement that Citizens Property Insurance Corp. policyholders use contractors approved by the state-run insurer to repair homes damaged by a sinkhole.
A provision to allow surplus line carriers into the Citizens clearinghouse as an option for homeowners whose policy is up for renewal.
Enabling neighborhood improvements districts to bond revenue for infrastructure improvements.
Allowing people who own a number of similar properties, such as condominiums, to challenge a property assessment in one petition.
A proposed constitutional amendment to provide a tax exemption to commercial properties equipped with renewable energy devices. In 2008, Florida voters approved a constitutional amendment that gives residential property owners a tax break for renewable energy and wind resistance improvements.
Regulating vacation rental managers under Chapter 475, Florida Statutes.
Allowing civil actions for violations of state fair housing laws.
A new local option sales tax to cleanup polluted bodies of water, including tributaries, canals, storm water conveyance systems and channels.
Bills to shrink the Florida Hurricane Catastrophe (CAT) Fund.
Two new disclosures for residential leases: one to notify a tenant that renter's insurance is required and a different disclosure that insurance isn't required.
A coastal restoration bill that would have allowed single-family coastal homeowners to obtain a permit from the Department of Environmental Protection to restore dunes, build dune walkovers, decks and fences and other projects, within certain guidelines.
All proposals to allow for local governments to create their own documentary stamp tax for housing or infrastructure.
© 2014 Florida Realtors