HB 0099A 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 for construction of the act in
20	pari materia with laws enacted during the 2003 Regular
21	Session of the Legislature; providing an effective date.
22
23	Be It Enacted by the Legislature of the State of Florida:
24
25	Section 1. Paragraph (c) of subsection (2), subsection
26	(3), paragraphs (c) and (d) of subsection (4), subsection (6),
27	and paragraphs (a) and (c) of subsection (7) of section 215.555,
28	Florida Statutes, are amended, and paragraphs (n), (o), and (p)
29	are added to subsection (2) of said section, to read:
30	215.555 Florida Hurricane Catastrophe Fund.--
31	(2) DEFINITIONS.--As used in this section:
32	(c) "Covered policy" means any insurance policy covering
33	residential property in this state, including, but not limited
34	to, any homeowner's, mobile home owner's, farm owner's,
35	condominium association, condominium unit owner's, tenant's, or
36	apartment building policy, or any other policy covering a
37	residential structure or its contents issued by any authorized
38	insurer, including the Citizen’s Property Insurance Corporation
39	andany joint underwriting association or similar entity created
40	pursuant to law. The term "covered policy" includes any
41	collateral protection insurance policy covering personal
42	residences which protects both the borrower's and the lender's
43	financial interests, in an amount at least equal to the coverage
44	for the dwelling in place under the lapsed homeowner's policy,
45	if such policy can be accurately reported as required in
46	subsection (5). Additionally, covered policies include policies
47	covering the peril of wind removed from the Citizen’s Property
48	Insurance Corporationthe Florida Residential Property and
49	Casualty Joint Underwriting Association, created pursuant to s.
50	627.351(6), or from the Florida Windstorm Underwriting
51	Association, created pursuant to s. 627.351(2),by an authorized
52	insurer under the terms and conditions of an executed assumption
53	agreement between the authorized insurer and the Citizen’s
54	Property Insurance Corporationeither such association. Each
55	assumption agreement between the Citizen’s Property Insurance
56	Corporationeither associationand such authorized insurer must
57	be approved by the Office of Insurance Regulation within the
58	Florida Department of Financial ServicesInsuranceprior to the
59	effective date of the assumption, and the OfficeDepartmentof
60	Insurance Regulationmust provide written notification to the
61	board within 15 working days after such approval. "Covered
62	policy" does not include any policy that excludes wind coverage
63	or hurricane coverage or any reinsurance agreement and does not
64	include any policy otherwise meeting this definition which is
65	issued by a surplus lines insurer or a reinsurer. All commercial
66	residential excess policies and all deductible buy-back policies
67	that, based on sound actuarial principles, require individual
68	ratemaking shall be excluded by rule if the actuarial soundness
69	of the fund is not jeopardized. For this purpose, the term
70	“excess policy” means a policy that provides insurance
71	protection for large commercial property risks and that provides
72	a layer of coverage above a primary layer insured by another
73	insurer.
74	(n) “Citizens Property Insurance Corporation” or
75	“Citizens” means the entity created pursuant to s. 627.351(6),
76	and includes both the High Risk Account, formerly the Florida
77	Windstorm Underwriting Association, and the Personal Lines and
78	Commercial Lines Accounts, formerly the Florida Residential
79	Property and Casualty Joint Underwriting Association.
80	(o) “Corporation” means the Florida Hurricane Catastrophe
81	Fund Finance Corporation created in paragraph (6)(d).
82	(p) “Pledged revenues” means all or any portion of
83	revenues to be derived from reimbursement premiums under
84	subsection (5) of from emergency assessments under paragraph
85	(6)(b)., as determined by the board.
86	(3) FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There is
87	created the Florida Hurricane Catastrophe Fund to be
88	administered by the State Board of Administration. Moneys in the
89	fund may not be expended, loaned, or appropriated except to pay
90	obligations of the fund arising out of reimbursement contracts
91	entered into under subsection (4), payment of debt service on
92	revenue bonds issued under subsection (6), costs of the
93	mitigation program under subsection (7), costs of procuring
94	reinsurance, and costs of administration of the fund. The board
95	shall invest the moneys in the fund pursuant to ss. 215.44-
96	215.52. Except as otherwise provided in this section, earnings
97	from all investments shall be retained in the fund. The board
98	may employ or contract with such staff and professionals as the
99	board deems necessary for the administration of the fund. The
100	board may adopt such rules as are reasonable and necessary to
101	implement this section and shall specify interest due on any
102	delinquent remittances, which interest may not exceed the fund’s
103	rate of return plus 5 percent. Such rules must conform to the
104	Legislature's specific intent in establishing the fund as
105	expressed in subsection (1), must enhance the fund's potential
106	ability to respond to claims for covered events, must contain
107	general provisions so that the rules can be applied with
108	reasonable flexibility so as to accommodate insurers in
109	situations of an unusual nature or where undue hardship may
110	result, except that such flexibility may not in any way impair,
111	override, supersede, or constrain the public purpose of the
112	fund, and must be consistent with sound insurance practices. The
113	board may, by rule, provide for the exemption from subsections
114	(4) and (5) of insurers writing covered policies with less than
115	$3 million$500,000in aggregate exposure for covered policies,
116	which exposure results in a de minimis reimbursement premium, if
117	the exemption does not affect the actuarial soundness of the
118	fund.
119	(4) REIMBURSEMENT CONTRACTS.--
120	(c)1. The contract shall also provide that the obligation
121	of the board with respect to all contracts covering a particular
122	contract year shall not exceed the actual claims-paying capacity
123	of the fund up to a limit of $11 billion for that contract year
124	adjusted based upon the reported exposure from the prior
125	contract year to reflect the percentage growth in exposure to
126	the fund for covered policies since 2002, unless the board
127	determines that there is sufficient estimated claims-paying
128	capacity to provide $11 billion of capacity for the current
129	contract year and an additional $11 billion of capacity for
130	subsequent contract years. Upon such determination being made,
131	the estimated claims-paying capacity for the current contract
132	year shall be determined by adding to the $11 billion limit one-
133	half of the fund's estimated claims-paying capacity in excess of
134	$22 billion.
135	2. The contract shall require the board to annually notify
136	insurers of the fund's estimated borrowing capacity for the next
137	contract year, the projected year-end balance of the fund, and
138	the insurer's estimated share of total reimbursement premium to
139	be paid to the fund. For all regulatory and reinsurance
140	purposes, an insurer may calculate its projected payout from the
141	fund as its share of the total fund premium for the current
142	contract year multiplied by the sum of the projected year-end
143	fund balance and the estimated borrowing capacity for that
144	contract year as reported under this paragraph. In May and
145	October of each year, the board shall publish in the Florida
146	Administrative Weekly a statement of the fund's estimated
147	borrowing capacity and the projected year-end balance of the
148	fund for the current contract year.
149	(d)1. For purposes of determining potential liability and
150	to aid in the sound administration of the fund, the contract
151	shall require each insurer to report such insurer's losses from
152	each covered event on an interim basis, as directed by the
153	board. The contract shall require the insurer to report to the
154	board no later than December 31 of each year, and quarterly
155	thereafter, its reimbursable losses from covered events for the
156	year. The contract shall require the board to determine and pay,
157	as soon as practicable after receiving these reports of
158	reimbursable losses, the initial amount of reimbursement due and
159	adjustments to this amount based on later loss information. The
160	adjustments to reimbursement amounts shall require the board to
161	pay, or the insurer to return, amounts reflecting the most
162	recent calculation of losses.
163	2. In determining reimbursements pursuant to this
164	subsection, the contract shall provide that the board shall:
165	a. First reimburse insurers writing covered policies,
166	which insurers are in full compliance with this section and have
167	petitioned the Office ofDepartment of Insurance Regulationand
168	qualified as limited apportionment companies under s.
169	627.351(2)(b)3. The amount of such reimbursement shall be the
170	lesser of $10 million or an amount equal to 10 times the
171	insurer's reimbursement premium for the current year. The amount
172	of reimbursement paid under this sub-subparagraph may not exceed
173	the full amount of reimbursement promised in the reimbursement
174	contract. This sub-subparagraph does not apply with respect to
175	any contract year in which the year-end projected cash balance
176	of the fund, exclusive of any bonding capacity of the fund,
177	exceeds $2 billion. Only one member of any insurer group may
178	receive reimbursement under this sub-subparagraph.
179	b. Next pay to each insurer such insurer's projected
180	payout, which is the amount of reimbursement it is owed, up to
181	an amount equal to the insurer's share of the actual premium
182	paid for that contract year, multiplied by the actual claims-
183	paying capacity available for that contract year; provided,
184	entities created pursuant to s. 627.351 shall be further
185	reimbursed in accordance with sub-subparagraph c.
186	c. Thereafter, establish, based on reimbursable losses,
187	the prorated reimbursement level at the highest level for which
188	any remaining fund balance or bond proceeds are sufficient to
189	reimburse entities created pursuant to s. 627.351 for losses
190	exceeding the amounts payable pursuant to sub-subparagraph b.
191	for the current contract year.
192	(6) REVENUE BONDS.--
193	(a) General provisions.--
194	1. Upon the occurrence of a hurricane and a determination
195	that the moneys in the fund are or will be insufficient to pay
196	reimbursement at the levels promised in the reimbursement
197	contracts, the board may take the necessary steps under
198	paragraph (c)(b) or paragraph (d)(c)for the issuance of
199	revenue bonds for the benefit of the fund. The proceeds of such
200	revenue bonds may be used to make reimbursement payments under
201	reimbursement contracts; to refinance or replace previously
202	existing borrowings or financial arrangements; to pay interest
203	on bonds; to fund reserves for the bonds; to pay expenses
204	incident to the issuance or sale of any bond issued under this
205	section, including costs of validating, printing, and delivering
206	the bonds, costs of printing the official statement, costs of
207	publishing notices of sale of the bonds, and related
208	administrative expenses; or for such other purposes related to
209	the financial obligations of the fund as the board may
210	determine. The term of the bonds may not exceed 30 years. The
211	board may pledge or authorize the corporation to pledge all or a
212	portion of all revenues under subsection (5) and under paragraph
213	(b)subparagraph 3.to secure such revenue bonds and the board
214	may execute such agreements between the board and the issuer of
215	any revenue bonds and providers of other financing arrangements
216	under paragraph (7)(b) as the board deems necessary to evidence,
217	secure, preserve, and protect such pledge. If reimbursement
218	premiums received under subsection (5) or earnings on such
219	premiums are used to pay debt service on revenue bonds, such
220	premiums and earnings shall be used only after the use of the
221	moneys derived from assessments under paragraph (b)subparagraph
222	3. The funds, credit, property, or taxing power of the state or
223	political subdivisions of the state shall not be pledged for the
224	payment of such bonds. The board may also enter into agreements
225	under paragraph (c)(b) or paragraph (d)(c)for the purpose of
226	issuing revenue bonds in the absence of a hurricane upon a
227	determination that such action would maximize the ability of the
228	fund to meet future obligations.
229	2. The Legislature finds and declares that the issuance of
230	bonds under this subsection is for the public purpose of paying
231	the proceeds of the bonds to insurers, thereby enabling insurers
232	to pay the claims of policyholders to assure that policyholders
233	are able to pay the cost of construction, reconstruction,
234	repair, restoration, and other costs associated with damage to
235	property of policyholders of covered policies after the
236	occurrence of a hurricane. Revenue bonds may not be issued under
237	this subsection until validated under chapter 75. The validation
238	of at least the first obligations incurred pursuant to this
239	subsection shall be appealed to the Supreme Court, to be handled
240	on an expedited basis.
241	(b)3.Emergency assessments.--If the board determines that
242	the amount of revenue produced under subsection (5) is
243	insufficient to fund the obligations, costs, and expenses of the
244	fund and the corporation, including repayment of revenue bonds,
245	the board shall direct the OfficeDepartment of Insurance
246	Regulationto levy an emergency assessment on each insurer
247	writing property and casualty business in this state, referred
248	to in this subsection as an assessable insurer, and on those
249	insureds procuring one or more lines of property and casualty
250	business in this state pursuant to part VIII of chapter 626,
251	referred to in this subsection as assessable insureds.
252	1. Pursuant to the emergency assessment, each such
253	assessableinsurer shall pay to the corporation by July 1 of
254	each year an amount set by the board not exceeding 32percent
255	of its gross direct written premium for the prior year from all
256	property and casualty business in this state except for workers'
257	compensation, except that, if the Governor has declared a state
258	of emergency under s. 252.36 due to the occurrence of a covered
259	event, the amount of the assessment for the contract year may be
260	increased to an amount not exceeding 54percent of such
261	premium.
262	2.a. Pursuant to the emergency assessment, each such
263	assessable insured shall pay an amount set by the board not
264	exceeding 3 percent of the gross written premium each year for
265	all property and casualty business procured in this state except
266	workers' compensation, provided, however, if the Governor has
267	declared a state of emergency under s. 252.36 due to the
268	occurrence of a covered event, the amount of the assessment for
269	the contract year may be increased to an amount not exceeding 5
270	percent of such premium.
271	b. The emergency assessment on each such assessable
272	insured shall be collected by the surplus lines agent at the
273	time such agent collects the surplus lines tax required by s.
274	626.932 and shall be remitted by the agent to the Florida
275	Surplus Lines Service Office created pursuant to s. 626.921 at
276	the time the agent pays the surplus lines tax to the Florida
277	Surplus Lines Service Office. The emergency assessment on each
278	assessable insured procuring coverage and filing under s.
279	626.938 shall be remitted by the insured to the Florida Surplus
280	Lines Service Office at the time the insured pays the surplus
281	lines tax to the Florida Surplus Lines Service Office. The
282	emergency assessments collected shall be transferred to the
283	corporation or to the fund pursuant to subparagraph 5. on a
284	periodic basis as determined by the board. The Florida Surplus
285	Lines Service Office shall verify the proper application by
286	surplus lines agents of the emergency assessments and shall
287	assist the board in ensuring the accurate, timely collection and
288	payment of assessments by surplus lines agents as required by
289	the board. The Florida Surplus Lines Service Office shall
290	determine annually the aggregate written premium on property and
291	casualty business, except workers' compensation, procured by
292	assessable insureds and shall report such information to the
293	board in a form and at a time specified by the board to ensure
294	that the fund and the corporation can meet their financing
295	obligations.
296	3.Any assessment authority not used for the contract year
297	may be used for a subsequent contract year. If, for a subsequent
298	contract year, the board determines that the amount of revenue
299	produced under subsection (5) is insufficient to fund the
300	obligations, costs, and expenses of the fund and the
301	corporation, including repayment of revenue bonds for that
302	contract year, the board shall direct the OfficeDepartmentof
303	Insurance Regulationto levy an emergency assessment up to an
304	amount not exceeding the amount of unused assessment authority
305	from a previous contract year or years, plus an additional 32
306	percent if the Governor has declared a state of emergency under
307	s. 252.36 due to the occurrence of a covered event. Any
308	assessment authority not used for the contract year may be used
309	for a subsequent contract year. As used in this subsection, the
310	term "property and casualty business" includes all lines of
311	business identified on Form 2, Exhibit of Premiums and Losses,
312	in the annual statement required of authorized insurersby s.
313	624.424 and any rules adopted under such section, except for
314	those lines identified as accident and health insurance. The
315	annual assessments under this subparagraph shall continue as
316	long as the revenue bonds issued with respect to which the
317	assessment was imposed are outstanding, unless adequate
318	provision has been made for the payment of such bonds pursuant
319	to the documents authorizing issuance of the bonds. An
320	assessable insurer or assessable insuredshall not at any time
321	be subject to aggregate annual assessments under this
322	subparagraph of more than 32percent of premium, except that in
323	the case of a declared emergency, an assessable insurer or
324	assessable insuredshall not at any time be subject to aggregate
325	annual assessments under this subparagraph of more than 86
326	percent of premium; provided, no more than 54percent may be
327	assessed for obligations arising due to losses inany one
328	contract year.
329	4.Any rate filing or portion of a rate filing reflecting
330	a rate change attributable entirely to the assessment levied
331	under this paragraphsubparagraphshall be deemed approved when
332	made, subject to the authority of the OfficeDepartmentof
333	Insurance Regulationto require actuarial justification as to
334	the adequacy of any rate at any time. If the rate filing
335	reflects only a rate change attributable to the assessment under
336	this paragraph, the filing may consist of a certification so
337	stating.
338	5.The assessments otherwise payable to the corporation
339	pursuant to this paragraphsubparagraphshall be paid instead to
340	the fund unless and until the OfficeDepartment of Insurance
341	Regulation and the Florida Surplus Lines Service Office havehas
342	received from the corporation and the fund a notice, which shall
343	be conclusive and upon which theythe Department of Insurance
344	may rely without further inquiry, that the corporation has
345	issued bonds and the fund has no agreements in effect with local
346	governments pursuant to paragraph (c)(b). On or after the date
347	of such notice and until such date as the corporation has no
348	bonds outstanding, the fund shall have no right, title, or
349	interest in or to the assessments, except as provided in the
350	fund's agreements with the corporation.
351	6. Emergency assessments are not premium and are not
352	subject to premium or surplus lines tax, fees, or commissions,
353	however, the failure by an assessable insured to pay an
354	emergency assessment shall be treated as a failure to pay
355	premium.
356	(c)(b)Revenue bond issuance through counties or
357	municipalities.--
358	1. If the board elects to enter into agreements with local
359	governments for the issuance of revenue bonds for the benefit of
360	the fund, the board shall enter into such contracts with one or
361	more local governments, including agreements providing for the
362	pledge of revenues, as are necessary to effect such issuance.
363	The governing body of a county or municipality is authorized to
364	issue bonds as defined in s. 125.013 or s. 166.101 from time to
365	time to fund an assistance program, in conjunction with the
366	Florida Hurricane Catastrophe Fund, for the purposes set forth
367	in this section or for the purpose of paying the costs of
368	construction, reconstruction, repair, restoration, and other
369	costs associated with damage to properties of policyholders of
370	covered policies due to the occurrence of a hurricane by
371	assuring that policyholders located in this state are able to
372	recover claims under property insurance policies after a covered
373	event.
374	2. In order to avoid needless and indiscriminate
375	proliferation, duplication, and fragmentation of such assistance
376	programs, any local government may provide for the payment of
377	fund reimbursements, regardless of whether or not the losses for
378	which reimbursement is made occurred within or outside of the
379	territorial jurisdiction of the local government.
380	3. The state hereby covenants with holders of bonds issued
381	under this paragraph that the state will not repeal or abrogate
382	the power of the board to direct the OfficeDepartmentof
383	Insurance Regulationto levy the assessments and to collect the
384	proceeds of the revenues pledged to the payment of such bonds as
385	long as any such bonds remain outstanding unless adequate
386	provision has been made for the payment of such bonds pursuant
387	to the documents authorizing the issuance of such bonds.
388	4. There shall be no liability on the part of, and no
389	cause of action shall arise against any members or employees of
390	the governing body of a local government for any actions taken
391	by them in the performance of their duties under this paragraph.
392	(d)(c)Florida Hurricane Catastrophe Fund Finance
393	Corporation.--
394	1. In addition to the findings and declarations in
395	subsection (1), the Legislature also finds and declares that:
396	a. The public benefits corporation created under this
397	paragraph will provide a mechanism necessary for the cost-
398	effective and efficient issuance of bonds. This mechanism will
399	eliminate unnecessary costs in the bond issuance process,
400	thereby increasing the amounts available to pay reimbursement
401	for losses to property sustained as a result of hurricane
402	damage.
403	b. The purpose of such bonds is to fund reimbursements
404	through the Florida Hurricane Catastrophe Fund to pay for the
405	costs of construction, reconstruction, repair, restoration, and
406	other costs associated with damage to properties of
407	policyholders of covered policies due to the occurrence of a
408	hurricane.
409	c. The efficacy of the financing mechanism will be
410	enhanced by the corporation's ownership of the assessments, by
411	the insulation of the assessments from possible bankruptcy
412	proceedings, and by covenants of the state with the
413	corporation's bondholders.
414	2.a. There is created a public benefits corporation, which
415	is an instrumentality of the state, to be known as the Florida
416	Hurricane Catastrophe Fund Finance Corporation.
417	b. The corporation shall operate under a five-member board
418	of directors consisting of the Governor or a designee, the
419	Comptroller or a designee, the Treasurer or a designee, the
420	director of the Division of Bond Finance of the State Board of
421	Administration, and the chief operating officer of the Florida
422	Hurricane Catastrophe Fund.
423	c. The corporation has all of the powers of corporations
424	under chapter 607 and under chapter 617, subject only to the
425	provisions of this subsection.
426	d. The corporation may issue bonds and engage in such
427	other financial transactions as are necessary to provide
428	sufficient funds to achieve the purposes of this section.
429	e. The corporation may invest in any of the investments
430	authorized under s. 215.47.
431	f. There shall be no liability on the part of, and no
432	cause of action shall arise against, any board members or
433	employees of the corporation for any actions taken by them in
434	the performance of their duties under this paragraph.
435	3.a. In actions under chapter 75 to validate any bonds
436	issued by the corporation, the notice required by s. 75.06 shall
437	be published only in Leon County and in two newspapers of
438	general circulation in the state, and the complaint and order of
439	the court shall be served only on the State Attorney of the
440	Second Judicial Circuit.
441	b. The state hereby covenants with holders of bonds of the
442	corporation that the state will not repeal or abrogate the power
443	of the board to direct the OfficeDepartment of Insurance
444	Regulationto levy the assessments and to collect the proceeds
445	of the revenues pledged to the payment of such bonds as long as
446	any such bonds remain outstanding unless adequate provision has
447	been made for the payment of such bonds pursuant to the
448	documents authorizing the issuance of such bonds.
449	4. The bonds of the corporation are not a debt of the
450	state or of any political subdivision, and neither the state nor
451	any political subdivision is liable on such bonds. The
452	corporation does not have the power to pledge the credit, the
453	revenues, or the taxing power of the state or of any political
454	subdivision. The credit, revenues, or taxing power of the state
455	or of any political subdivision shall not be deemed to be
456	pledged to the payment of any bonds of the corporation.
457	5.a. The property, revenues, and other assets of the
458	corporation; the transactions and operations of the corporation
459	and the income from such transactions and operations; and all
460	bonds issued under this paragraph and interest on such bonds are
461	exempt from taxation by the state and any political subdivision,
462	including the intangibles tax under chapter 199 and the income
463	tax under chapter 220. This exemption does not apply to any tax
464	imposed by chapter 220 on interest, income, or profits on debt
465	obligations owned by corporations other than the Florida
466	Hurricane Catastrophe Fund Finance Corporation.
467	b. All bonds of the corporation shall be and constitute
468	legal investments without limitation for all public bodies of
469	this state; for all banks, trust companies, savings banks,
470	savings associations, savings and loan associations, and
471	investment companies; for all administrators, executors,
472	trustees, and other fiduciaries; for all insurance companies and
473	associations and other persons carrying on an insurance
474	business; and for all other persons who are now or may hereafter
475	be authorized to invest in bonds or other obligations of the
476	state and shall be and constitute eligible securities to be
477	deposited as collateral for the security of any state, county,
478	municipal, or other public funds. This sub-subparagraph shall be
479	considered as additional and supplemental authority and shall
480	not be limited without specific reference to this sub-
481	subparagraph.
482	6. The corporation and its corporate existence shall
483	continue until terminated by law; however, no such law shall
484	take effect as long as the corporation has bonds outstanding
485	unless adequate provision has been made for the payment of such
486	bonds pursuant to the documents authorizing the issuance of such
487	bonds. Upon termination of the existence of the corporation, all
488	of its rights and properties in excess of its obligations shall
489	pass to and be vested in the state.
490	(e)(d)Protection of bondholders.--
491	1. As long as the corporation has any bonds outstanding,
492	neither the fund nor the corporation shall have the authority to
493	file a voluntary petition under chapter 9 of the federal
494	Bankruptcy Code or such corresponding chapter or sections as may
495	be in effect, from time to time, and neither any public officer
496	nor any organization, entity, or other person shall authorize
497	the fund or the corporation to be or become a debtor under
498	chapter 9 of the federal Bankruptcy Code or such corresponding
499	chapter or sections as may be in effect, from time to time,
500	during any such period.
501	2. The state hereby covenants with holders of bonds of the
502	corporation that the state will not limit or alter the denial of
503	authority under this paragraph or the rights under this section
504	vested in the fund or the corporation to fulfill the terms of
505	any agreements made with such bondholders or in any way impair
506	the rights and remedies of such bondholders as long as any such
507	bonds remain outstanding unless adequate provision has been made
508	for the payment of such bonds pursuant to the documents
509	authorizing the issuance of such bonds.
510	3. Notwithstanding any other provision of law, any pledge
511	of or other security interest in revenue, money, accounts,
512	contract rights, general intangibles, or other personal property
513	made or created by the fund or the corporation shall be valid,
514	binding, and perfected from the time such pledge is made or
515	other security interest attaches without any physical delivery
516	of the collateral or further act and the lien of any such pledge
517	or other security interest shall be valid, binding, and
518	perfected against all parties having claims of any kind in tort,
519	contract, or otherwise against the fund or the corporation
520	irrespective of whether or not such parties have notice of such
521	claims. No instrument by which such a pledge or security
522	interest is created nor any financing statement need be recorded
523	or filed.
524	(7) ADDITIONAL POWERS AND DUTIES.--
525	(a) The board may procure reinsurance from reinsurers
526	acceptable to the Office of Insurance Regulationapproved under
527	s. 624.610for the purpose of maximizing the capacity of the
528	fund.
529	(c) Each fiscal year, the Legislature shall appropriate
530	from the investment income of the Florida Hurricane Catastrophe
531	Fund an amount no less than $10 million and no more than 35
532	percent of the investment income based upon the most recent
533	fiscal year-end audited financial statementsfrom the prior
534	fiscal yearfor the purpose of providing funding for local
535	governments, state agencies, public and private educational
536	institutions, and nonprofit organizations to support programs
537	intended to improve hurricane preparedness, reduce potential
538	losses in the event of a hurricane, provide research into means
539	to reduce such losses, educate or inform the public as to means
540	to reduce hurricane losses, assist the public in determining the
541	appropriateness of particular upgrades to structures or in the
542	financing of such upgrades, or protect local infrastructure from
543	potential damage from a hurricane. Moneys shall first be
544	available for appropriation under this paragraph in fiscal year
545	1997-1998. Moneys in excess of the $10 million specified in this
546	paragraph shall not be available for appropriation under this
547	paragraph if the State Board of Administration finds that an
548	appropriation of investment income from the fund would
549	jeopardize the actuarial soundness of the fund.
550	Section 2. If any law amended by this act was also amended
551	by a law enacted at the 2003 Regular Session of the Legislature,
552	such laws shall be construed as if they had been enacted at the
553	same session of the Legislature, and full effect shall be given
554	to each if possible.
555	Section 3. This act shall take effect upon becoming a law.
556