The Florida Senate

¹166.111  Authority to borrow.--

(1)  The governing body of every municipality may borrow money, contract loans, and issue bonds as defined in s. 166.101 from time to time to finance the undertaking of any capital or other project for the purposes permitted by the State Constitution and may pledge the funds, credit, property, and taxing power of the municipality for the payment of such debts and bonds.

(2)(a)  The Legislature finds:

1.  The widespread and massive damage to persons and property caused by the August 24, 1992, storm known as Hurricane Andrew has generated insurance claims of such a nature as to render numerous insurers operating within this state insolvent, and therefore unable to satisfy covered claims.

2.  The inability of insureds within this state to receive payment of covered claims or to receive such payment on a timely basis creates financial and other hardships for such insureds and places undue burdens on the state, the affected units of local government, and the community at large.

3.  In addition, the failure of insurers to pay covered claims or to pay such claims on a timely basis due to the insolvency of such insurers can undermine the public's confidence in insurers operating within this state, thereby adversely affecting the stability of the insurance industry in this state.

4.  The state has previously taken action to address these problems by adopting the Florida Insurance Guaranty Association Act, which, among other things, provides a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer.

5.  In the wake of the unprecedented destruction caused by Hurricane Andrew, the resultant covered claims, and the number of insurers rendered insolvent thereby, it is evident that alternative programs must be developed to allow the Florida Insurance Guaranty Association to more expeditiously and effectively provide for the payment of covered claims.

6.  It is therefore determined to be in the best interests of, and necessary for, the protection of the public health, safety, and general welfare of the residents of this state, and for the protection and preservation of the economic stability of insurers operating in this state, and it is hereby declared to be an essential public purpose, to permit certain municipalities to take such actions as will provide relief to claimants and policyholders having covered claims against insolvent insurers operating in this state, by expediting the handling and payment of covered claims.

7.  To achieve the foregoing purposes, it is proper to authorize municipalities of this state substantially affected by Hurricane Andrew to issue bonds to assist the Florida Insurance Guaranty Association in expediting the handling and payment of covered claims against insolvent insurers operating in this state.

8.  In order to avoid the needless and indiscriminate proliferation, duplication, and fragmentation of such assistance programs, it is proper to authorize a municipality severely affected by Hurricane Andrew to provide for the payment of covered claims beyond its territorial limits in the implementation of such programs.

(b)  The governing body of any municipality the residents of which have been substantially affected by the August 24, 1992, storm known as Hurricane Andrew, or any county as defined in s. 125.011(1), may issue no more than $500 million, in aggregate principal amount, of bonds as defined in s. 166.101 from time to time to fund an assistance program, in conjunction with the Florida Insurance Guaranty Association, for the purpose of paying to claimants or policyholders covered claims, as such term is defined in s. 631.54(3), arising through the insolvency of an insurer occurring on or before March 31, 1993, which insolvency is determined by the Florida Insurance Guaranty Association to have been a result of Hurricane Andrew, regardless of whether such claimants or policyholders are residents of such municipality or the property to which such claim relates is located within or outside of the territorial jurisdiction of such municipality. A municipality issuing bonds for this purpose shall enter into such contracts with the Florida Insurance Guaranty Association or any entity acting on behalf of the Florida Insurance Guaranty Association as are necessary to implement the assistance program. Any bonds issued by a municipality under this subsection shall be payable from and secured by moneys received by or on behalf of the municipality from assessments levied under s. 631.57(3)(e), and assigned and pledged under s. 631.57(3)(e) to or on behalf of the municipality for the benefit of the holders of such bonds in connection with such assistance program. The funds, credit, property, and taxing power of the municipality shall not be pledged for the payment of such bonds.

(c)  The governing body of the municipality issuing bonds authorized by paragraph (b) shall require all firms, including, but not limited to, the financial advisers, legal counsel, and underwriters, providing professional services in the issuance of such bonds to include minority firms in the provision of such services. To meet such participation requirement, the minority firm must have full-time employees located in this state and a permanent place of business located in this state, and must be a firm which is at least 51 percent owned by minority persons as defined by s. 288.703(3), or any combination thereof, and whose management and daily operations are controlled by such persons. Minority firms must be offered participation in not less than 20 percent of the respective contracts for professional services.

History.--s. 1, ch. 73-129; s. 2, ch. 92-345.

¹Note.--

A.  Section 7, ch. 92-345, provides that "[n]o provision of section 631.57 or s. 166.111(2), Florida Statutes, shall be repealed until such time as the principal of, redemption premium, if any, and interest on all bonds issued under s. 166.111(2), Florida Statutes, payable and secured from assessments levied under s. 631.57(3)(e), Florida Statutes, have been paid in full or adequate provision for such payment has been made in accordance with the bond resolution or trust indenture pursuant to which such bonds were issued."

B.  Section 10, ch. 92-345, provides that "[n]otwithstanding any other provision of section 166.111(2)(c), Florida Statutes, an interim financing that is a part of and in anticipation of and to be refinanced from the proceeds of a permanent bond financing is not subject to otherwise required minority participation by underwriters or other professionals. The permanent financing continues to be subject to such requirements, and every reasonable effort must be made to include such participation in any interim financing."