As lawmakers finalize budget, bills are on their way to the governor

TALLAHASSEE, FLA. – May 4, 2009 – While most legislators returned home this weekend, about two dozen stayed at the state capitol to work out a budget compromise. The Legislature will reconvene on Thursday to debate and finalize the state budget by Friday at 6 p.m.

Though the 2009 legislative session isn’t over until Friday’s Sine Die, lawmakers were required to consider all non-budget legislation for final passage last Friday if it was going to have a chance to become law.

It was an amazing day for Florida Realtors®, as most of FAR’s 2009 legislative initiatives ended in victory. But the biggest winners are property owners and others with real estate interests, as the Legislature took bold steps toward strengthening the property insurance market, made it easier for property owners to challenge tax assessments and gave tax breaks to all non-homestead property owners, first-time buyers and military personnel serving overseas.

Following are highlights of action taken on key real estate-related bills. Keep checking FAR’s legislative  Web site for updates on all real estate-related legislation.

BILLS THAT PASSED

Property insurance / HB 1495 by Rep. Bryan Nelson
•    Repeals the requirement that, effective Jan. 1, 2010, sellers of property insured by Citizen’s Property Insurance Corp., which is located in the wind-borne debris region and which has an insured value on the structure of $500,000 or more, provide prospective buyers the structure’s windstorm mitigation rating.
•    Increase premiums for customers of the state-backed Citizens Property Insurance Corp., Florida’s largest provider of homeowner coverage, by no more than 10 percent annually. The goal is to make Citizens premiums “actuarially sound,” meaning the insurer will have the money needed to cover claims and build reserves.

Property insurance: Unregulated premiums / HB 1171 by Rep. Bill Proctor
•    Gives homeowners the choice of paying higher, unregulated insurance premiums for hurricane and other property coverage in a bid to attract larger, more financially robust insurers to Florida.
•    Allows State Farm Insurance Co. and other large insurers to charge premiums without approval by the Office of Insurance Regulation.
•    Backers of the measure believe some policyholders want to stay with their insurance provider rather than being forced to switch – and are willing to pay higher premiums for the privilege.

Lower taxes on non-homestead properties / SB 532  by Sen. Evelyn Lynn and first-time homebuyer exemption HB 97 by Rep. Carl Domino
Meeting with bills sponsors, FAR President Cynthia Shelton and FAR lobbyists were able to resurrect this bill from the dead in the final hours of the regular session. This is a big win for owners of businesses, second homes and non-homestead properties.
•    This bill creates a constitutional amendment that will go before voters in November 2010. It would need the approval of 60 percent of voters. The tax breaks would apply beginning in 2011.
•    It seeks to limit increases for non-school property tax assessments on ALL non-homestead property to 5 percent annually.
•    First-time homebuyers would be exempt from paying taxes on 25 percent of their home’s value. For someone who buys a $200,000 home, the savings from the new exemption would be about $1,000. This exemption would gradually decrease over five years, while Save Our Homes gradually increases.

Property assessment / HB 521 by Rep. Carlos Lopez-Cantera
“It’s a good day for the taxpayers of the state,” Rep. Lopez-Cantera told reporters following passage of HB 521, a bill that seeks to restore balance and fairness to the process of valuing property and challenging unfair assessments.
•    The current property appraisal system is weighed heavily on the side of property appraisers.
•    Under current Florida law, a property appraiser determines the value on your property and that value is presumed correct unless the taxpayer shows by “clear and convincing evidence” that the property appraiser is wrong.
•    HB 521 retains the property appraiser’s presumption but lowers the burden of proof on taxpayers to overcome this presumption and win their case to a “preponderance of the evidence.”

Property tax relief for military service / HJR 833 by Rep. Mike Horner
•    This is a constitutional amendment that goes before voters in November 2011.
•    If approved, it will provide military personnel deployed overseas an additional tax break on their primary homes based on the number of days deployed overseas.

Extension of Dade County housing surtax / SB 2430 by Sen. Al Lawson, Jr.
•    This bill retains the county’s documentary tax surtax, used for affordable housing programs, until 2031.
•    The surtax supports the Dade Housing Assistance Loan Trust Fund, which helps provide housing to people with very low to moderate incomes.
•    The bill also closes a tax loophole that enabled corporations to create shell companies to avoid paying documentary stamp taxes on real estate transactions. The move will generate an estimated $43 million next year but does not tax legitimate transfers between related companies.

Growth management / SB 360 by Sen. Mike Bennett
One of the last bills to pass the Legislature on Friday, SB 360 seeks to steer growth to urban areas by relaxing transportation requirements. Earlier versions of the legislation had proposed sweeping changes in development controls that drew the ire of environmentalists. The compromise approved Friday is scaled way back.
•    Exempts heavily populated areas from transportation requirements in Florida’s growth management laws that had the unintended consequence of encouraging sprawl.
•    In the final hours, SB 360 took on an amendment to minimize property taxes for homeowners whose affordable housing structures sit on land owned by a community land trust.

Condominium insurance / SB 714 by Sen. Dennis Jones
Since 2004, Florida’s Condominium Act has required unit owners to maintain hazard insurance on their units – separate and above the hazard insurance on the common areas paid for by the condo association. SB 714 makes numerous and substantial changes to this act.
•    Repeals the requirement for mandatory property insurance coverage on individual units.
•    Removes the provision that an association must require owners to provide evidence of hazard and liability insurance upon written request, and, should the owner fail to provide such proof of insurance, the association may purchase a policy on the owner’s behalf which the owner is responsible for the cost.
•    Requires $2,500 loss assessment insurance coverage for policies issued or renewed after July 1, 2009.
•    Delays retrofit requirements for certain sprinkler systems used for common areas from 2014 to 2025.

INITIATIVES THAT FAILED

•    Legislation to implement Amendment 6, passed by Florida voters last November. This is the amendment that allows working waterfront properties to be taxed based on current use, not highest and best use.
•    Funding for the My Safe Florida hurricane mitigation program was removed from the HB 1495, as was funding for the interest-free loan program.
•    Funding for commuter rail in Central Florida (SunRail), an initiative supported by FAR’s Public Policy Committee for its potential to network Florida’s core communities, leverage federal funding and create thousands of jobs throughout the state.

© 2009 FLORIDA ASSOCIATION OF REALTORS®

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