HB 1353, Engrossed 1 2003
1	A bill to be entitled
2	An act relating to the Florida Hurricane Catastrophe Fund;
3	amending s. 215.555, F.S.; revising definitions; including
4	certain accounts, formerly certain associations, within
5	the Citizens Property Insurance Corporation; including the
6	Citizens Property Insurance Corporation within the
7	operation of certain definitions; authorizing the State
8	Board of Administration to charge interest on delinquent
9	remittances to the Florida Hurricane Catastrophe Fund;
10	expanding the insurers eligible for exemptions from
11	certain reimbursement contract and premium provisions
12	authorized by the board under certain circumstances;
13	revising a reimbursement contract requirement; revising
14	emergency assessment authority of the board relating to
15	service of certain debt obligations; revising
16	requirements, procedures, and limitations; providing
17	responsibilities of surplus lines agents and the Florida
18	Surplus Lines Service Office; revising powers and duties
19	of the board; providing an effective date.
20
21	Be It Enacted by the Legislature of the State of Florida:
22
23	Section 1. Paragraph (c) of subsection (2), subsection
24	(3), paragraphs (c) and (d) of subsection (4), subsection (6),
25	and paragraphs (a) and (c) of subsection (7) of section 215.555,
26	Florida Statutes, are amended, and paragraphs (n) and (o) are
27	added to subsection (2) of said section, to read:
28	215.555 Florida Hurricane Catastrophe Fund.--
29	(2) DEFINITIONS.--As used in this section:
30	(c) "Covered policy" means any insurance policy covering
31	residential property in this state, including, but not limited
32	to, any homeowner's, mobile home owner's, farm owner's,
33	condominium association, condominium unit owner's, tenant's, or
34	apartment building policy, or any other policy covering a
35	residential structure or its contents issued by any authorized
36	insurer, including the Citizen’s Property Insurance Corporation
37	andany joint underwriting association or similar entity created
38	pursuant to law. The term "covered policy" includes any
39	collateral protection insurance policy covering personal
40	residences which protects both the borrower's and the lender's
41	financial interests, in an amount at least equal to the coverage
42	for the dwelling in place under the lapsed homeowner's policy,
43	if such policy can be accurately reported as required in
44	subsection (5). Additionally, covered policies include policies
45	covering the peril of wind removed from the Citizen’s Property
46	Insurance Corporationthe Florida Residential Property and
47	Casualty Joint Underwriting Association, created pursuant to s.
48	627.351(6), or from the Florida Windstorm Underwriting
49	Association, created pursuant to s. 627.351(2),by an authorized
50	insurer under the terms and conditions of an executed assumption
51	agreement between the authorized insurer and the Citizen’s
52	Property Insurance Corporationeither such association. Each
53	assumption agreement between the Citizen’s Property Insurance
54	Corporationeither associationand such authorized insurer must
55	be approved by the Office of Insurance Regulation within the
56	Florida Department of Financial ServicesInsuranceprior to the
57	effective date of the assumption, and the OfficeDepartmentof
58	Insurance Regulationmust provide written notification to the
59	board within 15 working days after such approval. "Covered
60	policy" does not include any policy that excludes wind coverage
61	or hurricane coverage or any reinsurance agreement and does not
62	include any policy otherwise meeting this definition which is
63	issued by a surplus lines insurer or a reinsurer. All commercial
64	residential excess policies and all deductible buy-back policies
65	that, based on sound actuarial principles, require individual
66	ratemaking shall be excluded by rule if the actuarial soundness
67	of the fund is not jeopardized. For this purpose, the term
68	“excess policy” means a policy that provides insurance
69	protection for large commercial property risks and that provides
70	a layer of coverage above a primary layer insured by another
71	insurer.
72	(n) “Citizens Property Insurance Corporation” or
73	“Citizens” means the entity created pursuant to s. 627.351(6),
74	and includes both the High Risk Account, formerly the Florida
75	Windstorm Underwriting Association, and the Personal Lines and
76	Commercial Lines Accounts, formerly the Florida Residential
77	Property and Casualty Joint Underwriting Association.
78	(o) “Corporation” means the Florida Hurricane Catastrophe
79	Fund Finance Corporation created in paragraph (6)(d).
80	(p) “Pledged revenues” means all or any portion of
81	revenues to be derived from reimbursement premiums under
82	subsection (5) of from emergency assessments under paragraph
83	(6)(b)., as determined by the board.
84	(3) FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There is
85	created the Florida Hurricane Catastrophe Fund to be
86	administered by the State Board of Administration. Moneys in the
87	fund may not be expended, loaned, or appropriated except to pay
88	obligations of the fund arising out of reimbursement contracts
89	entered into under subsection (4), payment of debt service on
90	revenue bonds issued under subsection (6), costs of the
91	mitigation program under subsection (7), costs of procuring
92	reinsurance, and costs of administration of the fund. The board
93	shall invest the moneys in the fund pursuant to ss. 215.44-
94	215.52. Except as otherwise provided in this section, earnings
95	from all investments shall be retained in the fund. The board
96	may employ or contract with such staff and professionals as the
97	board deems necessary for the administration of the fund. The
98	board may adopt such rules as are reasonable and necessary to
99	implement this section and shall specify interest due on any
100	delinquent remittances which may not exceed the fund’s rate of
101	return, plus 5 percent. Such rules must conform to the
102	Legislature's specific intent in establishing the fund as
103	expressed in subsection (1), must enhance the fund's potential
104	ability to respond to claims for covered events, must contain
105	general provisions so that the rules can be applied with
106	reasonable flexibility so as to accommodate insurers in
107	situations of an unusual nature or where undue hardship may
108	result, except that such flexibility may not in any way impair,
109	override, supersede, or constrain the public purpose of the
110	fund, and must be consistent with sound insurance practices. The
111	board may, by rule, provide for the exemption from subsections
112	(4) and (5) of insurers writing covered policies with less than
113	$3 million$500,000in aggregate exposure for covered policies,
114	which exposure results in a de minimis reimbursement premium, if
115	the exemption does not affect the actuarial soundness of the
116	fund.
117	(4) REIMBURSEMENT CONTRACTS.--
118	(c)1. The contract shall also provide that the obligation
119	of the board with respect to all contracts covering a particular
120	contract year shall not exceed the actual claims-paying capacity
121	of the fund up to a limit of $11 billion for that contract year
122	adjusted based upon the reported exposure from the prior
123	contract year to reflect the percentage growth in exposure to
124	the fund for covered policies since 2002, unless the board
125	determines that there is sufficient estimated claims-paying
126	capacity to provide $11 billion of capacity for the current
127	contract year and an additional $11 billion of capacity for
128	subsequent contract years. Upon such determination being made,
129	the estimated claims-paying capacity for the current contract
130	year shall be determined by adding to the $11 billion limit one-
131	half of the fund's estimated claims-paying capacity in excess of
132	$22 billion.
133	2. The contract shall require the board to annually notify
134	insurers of the fund's estimated borrowing capacity for the next
135	contract year, the projected year-end balance of the fund, and
136	the insurer's estimated share of total reimbursement premium to
137	be paid to the fund. For all regulatory and reinsurance
138	purposes, an insurer may calculate its projected payout from the
139	fund as its share of the total fund premium for the current
140	contract year multiplied by the sum of the projected year-end
141	fund balance and the estimated borrowing capacity for that
142	contract year as reported under this paragraph. In May and
143	October of each year, the board shall publish in the Florida
144	Administrative Weekly a statement of the fund's estimated
145	borrowing capacity and the projected year-end balance of the
146	fund for the current contract year.
147	(d)1. For purposes of determining potential liability and
148	to aid in the sound administration of the fund, the contract
149	shall require each insurer to report such insurer's losses from
150	each covered event on an interim basis, as directed by the
151	board. The contract shall require the insurer to report to the
152	board no later than December 31 of each year, and quarterly
153	thereafter, its reimbursable losses from covered events for the
154	year. The contract shall require the board to determine and pay,
155	as soon as practicable after receiving these reports of
156	reimbursable losses, the initial amount of reimbursement due and
157	adjustments to this amount based on later loss information. The
158	adjustments to reimbursement amounts shall require the board to
159	pay, or the insurer to return, amounts reflecting the most
160	recent calculation of losses.
161	2. In determining reimbursements pursuant to this
162	subsection, the contract shall provide that the board shall:
163	a. First reimburse insurers writing covered policies,
164	which insurers are in full compliance with this section and have
165	petitioned the Office ofDepartment of Insurance Regulationand
166	qualified as limited apportionment companies under s.
167	627.351(2)(b)3. The amount of such reimbursement shall be the
168	lesser of $10 million or an amount equal to 10 times the
169	insurer's reimbursement premium for the current year. The amount
170	of reimbursement paid under this sub-subparagraph may not exceed
171	the full amount of reimbursement promised in the reimbursement
172	contract. This sub-subparagraph does not apply with respect to
173	any contract year in which the year-end projected cash balance
174	of the fund, exclusive of any bonding capacity of the fund,
175	exceeds $2 billion. Only one member of any insurer group may
176	receive reimbursement under this sub-subparagraph.
177	b. Next pay to each insurer such insurer's projected
178	payout, which is the amount of reimbursement it is owed, up to
179	an amount equal to the insurer's share of the actual premium
180	paid for that contract year, multiplied by the actual claims-
181	paying capacity available for that contract year; provided,
182	entities created pursuant to s. 627.351 shall be further
183	reimbursed in accordance with sub-subparagraph c.
184	c. Thereafter, establish, based on reimbursable losses,
185	the prorated reimbursement level at the highest level for which
186	any remaining fund balance or bond proceeds are sufficient to
187	reimburse entities created pursuant to s. 627.351 for losses
188	exceeding the amounts payable pursuant to sub-subparagraph b.
189	for the current contract year.
190	(6) REVENUE BONDS.--
191	(a) General provisions.--
192	1. Upon the occurrence of a hurricane and a determination
193	that the moneys in the fund are or will be insufficient to pay
194	reimbursement at the levels promised in the reimbursement
195	contracts, the board may take the necessary steps under
196	paragraph (c)(b) or paragraph (d)(c)for the issuance of revenue
197	bonds for the benefit of the fund. The proceeds of such revenue
198	bonds may be used to make reimbursement payments under
199	reimbursement contracts; to refinance or replace previously
200	existing borrowings or financial arrangements; to pay interest
201	on bonds; to fund reserves for the bonds; to pay expenses
202	incident to the issuance or sale of any bond issued under this
203	section, including costs of validating, printing, and delivering
204	the bonds, costs of printing the official statement, costs of
205	publishing notices of sale of the bonds, and related
206	administrative expenses; or for such other purposes related to
207	the financial obligations of the fund as the board may
208	determine. The term of the bonds may not exceed 30 years. The
209	board may pledge or authorize the corporation to pledge all or a
210	portion of all revenues under subsection (5) and under paragraph
211	(b)subparagraph 3.to secure such revenue bonds and the board
212	may execute such agreements between the board and the issuer of
213	any revenue bonds and providers of other financing arrangements
214	under paragraph (7)(b) as the board deems necessary to evidence,
215	secure, preserve, and protect such pledge. If reimbursement
216	premiums received under subsection (5) or earnings on such
217	premiums are used to pay debt service on revenue bonds, such
218	premiums and earnings shall be used only after the use of the
219	moneys derived from assessments under paragraph (b)subparagraph
220	3. The funds, credit, property, or taxing power of the state or
221	political subdivisions of the state shall not be pledged for the
222	payment of such bonds. The board may also enter into agreements
223	under paragraph (c)(b) or paragraph (d)(c)for the purpose of
224	issuing revenue bonds in the absence of a hurricane upon a
225	determination that such action would maximize the ability of the
226	fund to meet future obligations.
227	2. The Legislature finds and declares that the issuance of
228	bonds under this subsection is for the public purpose of paying
229	the proceeds of the bonds to insurers, thereby enabling insurers
230	to pay the claims of policyholders to assure that policyholders
231	are able to pay the cost of construction, reconstruction,
232	repair, restoration, and other costs associated with damage to
233	property of policyholders of covered policies after the
234	occurrence of a hurricane. Revenue bonds may not be issued under
235	this subsection until validated under chapter 75. The validation
236	of at least the first obligations incurred pursuant to this
237	subsection shall be appealed to the Supreme Court, to be handled
238	on an expedited basis.
239	(b)3.Emergency assessments.--If the board determines
240	that the amount of revenue produced under subsection (5) is
241	insufficient to fund the obligations, costs, and expenses of the
242	fund and the corporation, including repayment of revenue bonds,
243	the board shall direct the OfficeDepartment of Insurance
244	Regulationto levy an emergency assessment on each insurer
245	writing property and casualty business in this state, referred
246	to in this subsection as an assessable insurer, and on those
247	insureds procuring one or more lines of property and casualty
248	business in this state pursuant to part VIII of chapter 626,
249	referred to in this subsection as assessable insureds.
250	1. Pursuant to the emergency assessment, each such
251	assessableinsurer shall pay to the corporation by July 1 of
252	each year an amount set by the board not exceeding 32percent
253	of its gross direct written premium for the prior year from all
254	property and casualty business in this state except for workers'
255	compensation, except that, if the Governor has declared a state
256	of emergency under s. 252.36 due to the occurrence of a covered
257	event, the amount of the assessment for the contract year may be
258	increased to an amount not exceeding 54percent of such
259	premium.
260	2.a. Pursuant to the emergency assessment, each such
261	assessable insured shall pay an amount set by the board not
262	exceeding 3 percent of the gross written premium each year for
263	all property and casualty business procured in this state except
264	workers' compensation, provided, however, if the Governor has
265	declared a state of emergency under s. 252.36 due to the
266	occurrence of a covered event, the amount of the assessment for
267	the contract year may be increased to an amount not exceeding 5
268	percent of such premium.
269	b. The emergency assessment on each such assessable
270	insured shall be collected by the surplus lines agent at the
271	time such agent collects the surplus lines tax required by s.
272	626.932 and shall be remitted by the agent to the Florida
273	Surplus Lines Service Office created pursuant to s. 626.921 at
274	the time the agent pays the surplus lines tax to the Florida
275	Surplus Lines Service Office. The emergency assessment on each
276	assessable insured procuring coverage and filing under s.
277	626.938 shall be remitted by the insured to the Florida Surplus
278	Lines Service Office at the time the insured pays the surplus
279	lines tax to the Florida Surplus Lines Service Office. The
280	emergency assessments collected shall be transferred to the
281	corporation or to the fund pursuant to subparagraph 5. on a
282	periodic basis as determined by the board. The Florida Surplus
283	Lines Service Office shall verify the proper application by
284	surplus lines agents of the emergency assessments and shall
285	assist the board in ensuring the accurate, timely collection and
286	payment of assessments by surplus lines agents as required by
287	the board. The Florida Surplus Lines Service Office shall
288	determine annually the aggregate written premium on property and
289	casualty business, except workers' compensation, procured by
290	assessable insureds and shall report such information to the
291	board in a form and at a time specified by the board to ensure
292	that the fund and the corporation can meet their financing
293	obligations.
294	3.Any assessment authority not used for the contract year
295	may be used for a subsequent contract year. If, for a subsequent
296	contract year, the board determines that the amount of revenue
297	produced under subsection (5) is insufficient to fund the
298	obligations, costs, and expenses of the fund and the
299	corporation, including repayment of revenue bonds for that
300	contract year, the board shall direct the OfficeDepartmentof
301	Insurance Regulationto levy an emergency assessment up to an
302	amount not exceeding the amount of unused assessment authority
303	from a previous contract year or years, plus an additional 32
304	percent if the Governor has declared a state of emergency under
305	s. 252.36 due to the occurrence of a covered event. Any
306	assessment authority not used for the contract year may be used
307	for a subsequent contract year. As used in this subsection, the
308	term "property and casualty business" includes all lines of
309	business identified on Form 2, Exhibit of Premiums and Losses,
310	in the annual statement required of authorized insurersby s.
311	624.424 and any rules adopted under such section, except for
312	those lines identified as accident and health insurance. The
313	annual assessments under this subparagraph shall continue as
314	long as the revenue bonds issued with respect to which the
315	assessment was imposed are outstanding, unless adequate
316	provision has been made for the payment of such bonds pursuant
317	to the documents authorizing issuance of the bonds. An
318	assessable insurer or assessable insuredshall not at any time
319	be subject to aggregate annual assessments under this
320	subparagraph of more than 32percent of premium, except that in
321	the case of a declared emergency, an assessable insurer or
322	assessable insuredshall not at any time be subject to aggregate
323	annual assessments under this subparagraph of more than 86
324	percent of premium; provided, no more than 54percent may be
325	assessed for obligations arising due to losses inany one
326	contract year.
327	4.Any rate filing or portion of a rate filing reflecting
328	a rate change attributable entirely to the assessment levied
329	under this paragraphsubparagraphshall be deemed approved when
330	made, subject to the authority of the OfficeDepartmentof
331	Insurance Regulationto require actuarial justification as to
332	the adequacy of any rate at any time. If the rate filing
333	reflects only a rate change attributable to the assessment under
334	this paragraph, the filing may consist of a certification so
335	stating.
336	5.The assessments otherwise payable to the corporation
337	pursuant to this paragraphsubparagraphshall be paid instead to
338	the fund unless and until the OfficeDepartment of Insurance
339	Regulation and the Florida Surplus Lines Service Office havehas
340	received from the corporation and the fund a notice, which shall
341	be conclusive and upon which theythe Department of Insurance
342	may rely without further inquiry, that the corporation has
343	issued bonds and the fund has no agreements in effect with local
344	governments pursuant to paragraph (c)(b). On or after the date
345	of such notice and until such date as the corporation has no
346	bonds outstanding, the fund shall have no right, title, or
347	interest in or to the assessments, except as provided in the
348	fund's agreements with the corporation.
349	6. Emergency assessments are not premium and are not
350	subject to premium or surplus lines tax, fees, or commissions,
351	however, the failure by an assessable insured to pay an
352	emergency assessment shall be treated as a failure to pay
353	premium.
354	(c)(b)Revenue bond issuance through counties or
355	municipalities.--
356	1. If the board elects to enter into agreements with local
357	governments for the issuance of revenue bonds for the benefit of
358	the fund, the board shall enter into such contracts with one or
359	more local governments, including agreements providing for the
360	pledge of revenues, as are necessary to effect such issuance.
361	The governing body of a county or municipality is authorized to
362	issue bonds as defined in s. 125.013 or s. 166.101 from time to
363	time to fund an assistance program, in conjunction with the
364	Florida Hurricane Catastrophe Fund, for the purposes set forth
365	in this section or for the purpose of paying the costs of
366	construction, reconstruction, repair, restoration, and other
367	costs associated with damage to properties of policyholders of
368	covered policies due to the occurrence of a hurricane by
369	assuring that policyholders located in this state are able to
370	recover claims under property insurance policies after a covered
371	event.
372	2. In order to avoid needless and indiscriminate
373	proliferation, duplication, and fragmentation of such assistance
374	programs, any local government may provide for the payment of
375	fund reimbursements, regardless of whether or not the losses for
376	which reimbursement is made occurred within or outside of the
377	territorial jurisdiction of the local government.
378	3. The state hereby covenants with holders of bonds issued
379	under this paragraph that the state will not repeal or abrogate
380	the power of the board to direct the OfficeDepartmentof
381	Insurance Regulationto levy the assessments and to collect the
382	proceeds of the revenues pledged to the payment of such bonds as
383	long as any such bonds remain outstanding unless adequate
384	provision has been made for the payment of such bonds pursuant
385	to the documents authorizing the issuance of such bonds.
386	4. There shall be no liability on the part of, and no
387	cause of action shall arise against any members or employees of
388	the governing body of a local government for any actions taken
389	by them in the performance of their duties under this paragraph.
390	(d)(c)Florida Hurricane Catastrophe Fund Finance
391	Corporation.--
392	1. In addition to the findings and declarations in
393	subsection (1), the Legislature also finds and declares that:
394	a. The public benefits corporation created under this
395	paragraph will provide a mechanism necessary for the cost-
396	effective and efficient issuance of bonds. This mechanism will
397	eliminate unnecessary costs in the bond issuance process,
398	thereby increasing the amounts available to pay reimbursement
399	for losses to property sustained as a result of hurricane
400	damage.
401	b. The purpose of such bonds is to fund reimbursements
402	through the Florida Hurricane Catastrophe Fund to pay for the
403	costs of construction, reconstruction, repair, restoration, and
404	other costs associated with damage to properties of
405	policyholders of covered policies due to the occurrence of a
406	hurricane.
407	c. The efficacy of the financing mechanism will be
408	enhanced by the corporation's ownership of the assessments, by
409	the insulation of the assessments from possible bankruptcy
410	proceedings, and by covenants of the state with the
411	corporation's bondholders.
412	2.a. There is created a public benefits corporation, which
413	is an instrumentality of the state, to be known as the Florida
414	Hurricane Catastrophe Fund Finance Corporation.
415	b. The corporation shall operate under a five-member board
416	of directors consisting of the Governor or a designee, the
417	Comptroller or a designee, the Treasurer or a designee, the
418	director of the Division of Bond Finance of the State Board of
419	Administration, and the chief operating officer of the Florida
420	Hurricane Catastrophe Fund.
421	c. The corporation has all of the powers of corporations
422	under chapter 607 and under chapter 617, subject only to the
423	provisions of this subsection.
424	d. The corporation may issue bonds and engage in such
425	other financial transactions as are necessary to provide
426	sufficient funds to achieve the purposes of this section.
427	e. The corporation may invest in any of the investments
428	authorized under s. 215.47.
429	f. There shall be no liability on the part of, and no
430	cause of action shall arise against, any board members or
431	employees of the corporation for any actions taken by them in
432	the performance of their duties under this paragraph.
433	3.a. In actions under chapter 75 to validate any bonds
434	issued by the corporation, the notice required by s. 75.06 shall
435	be published only in Leon County and in two newspapers of
436	general circulation in the state, and the complaint and order of
437	the court shall be served only on the State Attorney of the
438	Second Judicial Circuit.
439	b. The state hereby covenants with holders of bonds of the
440	corporation that the state will not repeal or abrogate the power
441	of the board to direct the OfficeDepartment of Insurance
442	Regulationto levy the assessments and to collect the proceeds
443	of the revenues pledged to the payment of such bonds as long as
444	any such bonds remain outstanding unless adequate provision has
445	been made for the payment of such bonds pursuant to the
446	documents authorizing the issuance of such bonds.
447	4. The bonds of the corporation are not a debt of the
448	state or of any political subdivision, and neither the state nor
449	any political subdivision is liable on such bonds. The
450	corporation does not have the power to pledge the credit, the
451	revenues, or the taxing power of the state or of any political
452	subdivision. The credit, revenues, or taxing power of the state
453	or of any political subdivision shall not be deemed to be
454	pledged to the payment of any bonds of the corporation.
455	5.a. The property, revenues, and other assets of the
456	corporation; the transactions and operations of the corporation
457	and the income from such transactions and operations; and all
458	bonds issued under this paragraph and interest on such bonds are
459	exempt from taxation by the state and any political subdivision,
460	including the intangibles tax under chapter 199 and the income
461	tax under chapter 220. This exemption does not apply to any tax
462	imposed by chapter 220 on interest, income, or profits on debt
463	obligations owned by corporations other than the Florida
464	Hurricane Catastrophe Fund Finance Corporation.
465	b. All bonds of the corporation shall be and constitute
466	legal investments without limitation for all public bodies of
467	this state; for all banks, trust companies, savings banks,
468	savings associations, savings and loan associations, and
469	investment companies; for all administrators, executors,
470	trustees, and other fiduciaries; for all insurance companies and
471	associations and other persons carrying on an insurance
472	business; and for all other persons who are now or may hereafter
473	be authorized to invest in bonds or other obligations of the
474	state and shall be and constitute eligible securities to be
475	deposited as collateral for the security of any state, county,
476	municipal, or other public funds. This sub-subparagraph shall be
477	considered as additional and supplemental authority and shall
478	not be limited without specific reference to this sub-
479	subparagraph.
480	6. The corporation and its corporate existence shall
481	continue until terminated by law; however, no such law shall
482	take effect as long as the corporation has bonds outstanding
483	unless adequate provision has been made for the payment of such
484	bonds pursuant to the documents authorizing the issuance of such
485	bonds. Upon termination of the existence of the corporation, all
486	of its rights and properties in excess of its obligations shall
487	pass to and be vested in the state.
488	(e)(d)Protection of bondholders.--
489	1. As long as the corporation has any bonds outstanding,
490	neither the fund nor the corporation shall have the authority to
491	file a voluntary petition under chapter 9 of the federal
492	Bankruptcy Code or such corresponding chapter or sections as may
493	be in effect, from time to time, and neither any public officer
494	nor any organization, entity, or other person shall authorize
495	the fund or the corporation to be or become a debtor under
496	chapter 9 of the federal Bankruptcy Code or such corresponding
497	chapter or sections as may be in effect, from time to time,
498	during any such period.
499	2. The state hereby covenants with holders of bonds of the
500	corporation that the state will not limit or alter the denial of
501	authority under this paragraph or the rights under this section
502	vested in the fund or the corporation to fulfill the terms of
503	any agreements made with such bondholders or in any way impair
504	the rights and remedies of such bondholders as long as any such
505	bonds remain outstanding unless adequate provision has been made
506	for the payment of such bonds pursuant to the documents
507	authorizing the issuance of such bonds.
508	3. Notwithstanding any other provision of law, any pledge
509	of or other security interest in revenue, money, accounts,
510	contract rights, general intangibles, or other personal property
511	made or created by the fund or the corporation shall be valid,
512	binding, and perfected from the time such pledge is made or
513	other security interest attaches without any physical delivery
514	of the collateral or further act and the lien of any such pledge
515	or other security interest shall be valid, binding, and
516	perfected against all parties having claims of any kind in tort,
517	contract, or otherwise against the fund or the corporation
518	irrespective of whether or not such parties have notice of such
519	claims. No instrument by which such a pledge or security
520	interest is created nor any financing statement need be recorded
521	or filed.
522	(7) ADDITIONAL POWERS AND DUTIES.--
523	(a) The board may procure reinsurance from reinsurers
524	acceptable to the Office of Insurance Regulationapproved under
525	s. 624.610for the purpose of maximizing the capacity of the
526	fund.
527	(c) Each fiscal year, the Legislature shall appropriate
528	from the investment income of the Florida Hurricane Catastrophe
529	Fund an amount no less than $10 million and no more than 35
530	percent of the investment income based upon the most recent
531	fiscal year-end audited financial statementsfrom the prior
532	fiscal yearfor the purpose of providing funding for local
533	governments, state agencies, public and private educational
534	institutions, and nonprofit organizations to support programs
535	intended to improve hurricane preparedness, reduce potential
536	losses in the event of a hurricane, provide research into means
537	to reduce such losses, educate or inform the public as to means
538	to reduce hurricane losses, assist the public in determining the
539	appropriateness of particular upgrades to structures or in the
540	financing of such upgrades, or protect local infrastructure from
541	potential damage from a hurricane. Moneys shall first be
542	available for appropriation under this paragraph in fiscal year
543	1997-1998. Moneys in excess of the $10 million specified in this
544	paragraph shall not be available for appropriation under this
545	paragraph if the State Board of Administration finds that an
546	appropriation of investment income from the fund would
547	jeopardize the actuarial soundness of the fund.
548	Section 2. This act shall take effect upon becoming a law.