HB 0021B 2003
1	A bill to be entitled
2	An act relating to the Florida Hurricane Catastrophe
3	Fund; amending s. 215.555, F.S.; revising definitions;
4	including certain accounts, formerly certain
5	associations, within the Citizens Property Insurance
6	Corporation; including the Citizens Property Insurance
7	Corporation within the operation of certain definitions;
8	authorizing the State Board of Administration to charge
9	interest on delinquent remittances to the Florida
10	Hurricane Catastrophe Fund; expanding the insurers
11	eligible for exemptions from certain reimbursement
12	contract and premium provisions authorized by the board
13	under certain circumstances; revising a reimbursement
14	contract requirement; revising emergency assessment
15	authority of the board relating to service of certain
16	debt obligations; revising requirements, procedures, and
17	limitations; providing responsibilities of surplus lines
18	agents and the Florida Surplus Lines Service Office;
19	revising powers and duties of the board; providing for
20	construction of the act in pari materia with laws enacted
21	during the 2003 Regular Session or the 2003 Special
22	Session A of the Legislature; providing an effective
23	date.
24
25	Be It Enacted by the Legislature of the State of Florida:
26
27	Section 1. Paragraphs (c) and (k) of subsection (2),
28	subsection (3), paragraphs (c) and (d) of subsection (4),
29	subsection (6), and paragraphs (a) and (c) of subsection (7) of
30	section 215.555, Florida Statutes, are amended, and paragraphs
31	(n) and (o) are added to subsection (2) of said section, to
32	read:
33	215.555 Florida Hurricane Catastrophe Fund.--
34	(2) DEFINITIONS.--As used in this section:
35	(c) "Covered policy" means any insurance policy covering
36	residential property in this state, including, but not limited
37	to, any homeowner's, mobile home owner's, farm owner's,
38	condominium association, condominium unit owner's, tenant's, or
39	apartment building policy, or any other policy covering a
40	residential structure or its contents issued by any authorized
41	insurer, including the Citizen’s Property Insurance Corporation
42	andany joint underwriting association or similar entity created
43	pursuant to law. The term "covered policy" includes any
44	collateral protection insurance policy covering personal
45	residences which protects both the borrower's and the lender's
46	financial interests, in an amount at least equal to the coverage
47	for the dwelling in place under the lapsed homeowner's policy,
48	if such policy can be accurately reported as required in
49	subsection (5). Additionally, covered policies include policies
50	covering the peril of wind removed from the Citizen’s Property
51	Insurance Corporationthe Florida Residential Property and
52	Casualty Joint Underwriting Association, created pursuant to s.
53	627.351(6), or from the Florida Windstorm Underwriting
54	Association, created pursuant to s. 627.351(2),by an authorized
55	insurer under the terms and conditions of an executed assumption
56	agreement between the authorized insurer and the Citizen’s
57	Property Insurance Corporationeither such association. Each
58	assumption agreement between the Citizen’s Property Insurance
59	Corporationeither associationand such authorized insurer must
60	be approved by the Office of Insurance Regulation within the
61	Florida Department of Financial ServicesInsuranceprior to the
62	effective date of the assumption, and the OfficeDepartmentof
63	Insurance Regulationmust provide written notification to the
64	board within 15 working days after such approval. "Covered
65	policy" does not include any policy that excludes wind coverage
66	or hurricane coverage or any reinsurance agreement and does not
67	include any policy otherwise meeting this definition which is
68	issued by a surplus lines insurer or a reinsurer. All commercial
69	residential excess policies and all deductible buy-back policies
70	that, based on sound actuarial principles, require individual
71	ratemaking shall be excluded by rule if the actuarial soundness
72	of the fund is not jeopardized. For this purpose, the term
73	“excess policy” means a policy that provides insurance
74	protection for large commercial property risks and that provides
75	a layer of coverage above a primary layer insured by another
76	insurer.
77	(k) "Pledged revenues" means all or any portion of
78	revenues to be derived from reimbursement premiums under
79	subsection (5) or from emergency assessments under paragraph
80	subparagraph (6)(b)(a)3., as determined by the board.
81	(n) “Citizens Property Insurance Corporation” or
82	“Citizens” means the entity created pursuant to s. 627.351(6),
83	and includes both the High Risk Account, formerly the Florida
84	Windstorm Underwriting Association, and the Personal Lines and
85	Commercial Lines Accounts, formerly the Florida Residential
86	Property and Casualty Joint Underwriting Association.
87	(o) “Corporation” means the Florida Hurricane Catastrophe
88	Fund Finance Corporation created in paragraph (6)(d).
89	(3) FLORIDA HURRICANE CATASTROPHE FUND CREATED.--There is
90	created the Florida Hurricane Catastrophe Fund to be
91	administered by the State Board of Administration. Moneys in the
92	fund may not be expended, loaned, or appropriated except to pay
93	obligations of the fund arising out of reimbursement contracts
94	entered into under subsection (4), payment of debt service on
95	revenue bonds issued under subsection (6), costs of the
96	mitigation program under subsection (7), costs of procuring
97	reinsurance, and costs of administration of the fund. The board
98	shall invest the moneys in the fund pursuant to ss. 215.44-
99	215.52. Except as otherwise provided in this section, earnings
100	from all investments shall be retained in the fund. The board
101	may employ or contract with such staff and professionals as the
102	board deems necessary for the administration of the fund. The
103	board may adopt such rules as are reasonable and necessary to
104	implement this section and shall specify interest due on any
105	delinquent remittances, which interest may not exceed the fund’s
106	rate of return plus 5 percent. Such rules must conform to the
107	Legislature's specific intent in establishing the fund as
108	expressed in subsection (1), must enhance the fund's potential
109	ability to respond to claims for covered events, must contain
110	general provisions so that the rules can be applied with
111	reasonable flexibility so as to accommodate insurers in
112	situations of an unusual nature or where undue hardship may
113	result, except that such flexibility may not in any way impair,
114	override, supersede, or constrain the public purpose of the
115	fund, and must be consistent with sound insurance practices. The
116	board may, by rule, provide for the exemption from subsections
117	(4) and (5) of insurers writing covered policies with less than
118	$3 million$500,000in aggregate exposure for covered policies,
119	which exposure results in a de minimis reimbursement premium, if
120	the exemption does not affect the actuarial soundness of the
121	fund.
122	(4) REIMBURSEMENT CONTRACTS.--
123	(c)1. The contract shall also provide that the obligation
124	of the board with respect to all contracts covering a particular
125	contract year shall not exceed the actual claims-paying capacity
126	of the fund up to a limit of $11 billion for that contract year
127	adjusted based upon the reported exposure from the prior
128	contract year to reflect the percentage growth in exposure to
129	the fund for covered policies since 2002, unless the board
130	determines that there is sufficient estimated claims-paying
131	capacity to provide $11 billion of capacity for the current
132	contract year and an additional $11 billion of capacity for
133	subsequent contract years. Upon such determination being made,
134	the estimated claims-paying capacity for the current contract
135	year shall be determined by adding to the $11 billion limit one-
136	half of the fund's estimated claims-paying capacity in excess of
137	$22 billion.
138	2. The contract shall require the board to annually notify
139	insurers of the fund's estimated borrowing capacity for the next
140	contract year, the projected year-end balance of the fund, and
141	the insurer's estimated share of total reimbursement premium to
142	be paid to the fund. For all regulatory and reinsurance
143	purposes, an insurer may calculate its projected payout from the
144	fund as its share of the total fund premium for the current
145	contract year multiplied by the sum of the projected year-end
146	fund balance and the estimated borrowing capacity for that
147	contract year as reported under this paragraph. In May and
148	October of each year, the board shall publish in the Florida
149	Administrative Weekly a statement of the fund's estimated
150	borrowing capacity and the projected year-end balance of the
151	fund for the current contract year.
152	(d)1. For purposes of determining potential liability and
153	to aid in the sound administration of the fund, the contract
154	shall require each insurer to report such insurer's losses from
155	each covered event on an interim basis, as directed by the
156	board. The contract shall require the insurer to report to the
157	board no later than December 31 of each year, and quarterly
158	thereafter, its reimbursable losses from covered events for the
159	year. The contract shall require the board to determine and pay,
160	as soon as practicable after receiving these reports of
161	reimbursable losses, the initial amount of reimbursement due and
162	adjustments to this amount based on later loss information. The
163	adjustments to reimbursement amounts shall require the board to
164	pay, or the insurer to return, amounts reflecting the most
165	recent calculation of losses.
166	2. In determining reimbursements pursuant to this
167	subsection, the contract shall provide that the board shall:
168	a. First reimburse insurers writing covered policies,
169	which insurers are in full compliance with this section and have
170	petitioned the Office ofDepartment of Insurance Regulationand
171	qualified as limited apportionment companies under s.
172	627.351(2)(b)3. The amount of such reimbursement shall be the
173	lesser of $10 million or an amount equal to 10 times the
174	insurer's reimbursement premium for the current year. The amount
175	of reimbursement paid under this sub-subparagraph may not exceed
176	the full amount of reimbursement promised in the reimbursement
177	contract. This sub-subparagraph does not apply with respect to
178	any contract year in which the year-end projected cash balance
179	of the fund, exclusive of any bonding capacity of the fund,
180	exceeds $2 billion. Only one member of any insurer group may
181	receive reimbursement under this sub-subparagraph.
182	b. Next pay to each insurer such insurer's projected
183	payout, which is the amount of reimbursement it is owed, up to
184	an amount equal to the insurer's share of the actual premium
185	paid for that contract year, multiplied by the actual claims-
186	paying capacity available for that contract year; provided,
187	entities created pursuant to s. 627.351 shall be further
188	reimbursed in accordance with sub-subparagraph c.
189	c. Thereafter, establish, based on reimbursable losses,
190	the prorated reimbursement level at the highest level for which
191	any remaining fund balance or bond proceeds are sufficient to
192	reimburse entities created pursuant to s. 627.351 for losses
193	exceeding the amounts payable pursuant to sub-subparagraph b.
194	for the current contract year.
195	(6) REVENUE BONDS.--
196	(a) General provisions.--
197	1. Upon the occurrence of a hurricane and a determination
198	that the moneys in the fund are or will be insufficient to pay
199	reimbursement at the levels promised in the reimbursement
200	contracts, the board may take the necessary steps under
201	paragraph (c)(b) or paragraph (d)(c)for the issuance of
202	revenue bonds for the benefit of the fund. The proceeds of such
203	revenue bonds may be used to make reimbursement payments under
204	reimbursement contracts; to refinance or replace previously
205	existing borrowings or financial arrangements; to pay interest
206	on bonds; to fund reserves for the bonds; to pay expenses
207	incident to the issuance or sale of any bond issued under this
208	section, including costs of validating, printing, and delivering
209	the bonds, costs of printing the official statement, costs of
210	publishing notices of sale of the bonds, and related
211	administrative expenses; or for such other purposes related to
212	the financial obligations of the fund as the board may
213	determine. The term of the bonds may not exceed 30 years. The
214	board may pledge or authorize the corporation to pledge all or a
215	portion of all revenues under subsection (5) and under paragraph
216	(b)subparagraph 3.to secure such revenue bonds and the board
217	may execute such agreements between the board and the issuer of
218	any revenue bonds and providers of other financing arrangements
219	under paragraph (7)(b) as the board deems necessary to evidence,
220	secure, preserve, and protect such pledge. If reimbursement
221	premiums received under subsection (5) or earnings on such
222	premiums are used to pay debt service on revenue bonds, such
223	premiums and earnings shall be used only after the use of the
224	moneys derived from assessments under paragraph (b)subparagraph
225	3. The funds, credit, property, or taxing power of the state or
226	political subdivisions of the state shall not be pledged for the
227	payment of such bonds. The board may also enter into agreements
228	under paragraph (c)(b) or paragraph (d)(c)for the purpose of
229	issuing revenue bonds in the absence of a hurricane upon a
230	determination that such action would maximize the ability of the
231	fund to meet future obligations.
232	2. The Legislature finds and declares that the issuance of
233	bonds under this subsection is for the public purpose of paying
234	the proceeds of the bonds to insurers, thereby enabling insurers
235	to pay the claims of policyholders to assure that policyholders
236	are able to pay the cost of construction, reconstruction,
237	repair, restoration, and other costs associated with damage to
238	property of policyholders of covered policies after the
239	occurrence of a hurricane. Revenue bonds may not be issued under
240	this subsection until validated under chapter 75. The validation
241	of at least the first obligations incurred pursuant to this
242	subsection shall be appealed to the Supreme Court, to be handled
243	on an expedited basis.
244	(b)3.Emergency assessments.--If the board determines that
245	the amount of revenue produced under subsection (5) is
246	insufficient to fund the obligations, costs, and expenses of the
247	fund and the corporation, including repayment of revenue bonds,
248	the board shall direct the OfficeDepartment of Insurance
249	Regulationto levy an emergency assessment on each insurer
250	writing property and casualty business in this state, referred
251	to in this subsection as an assessable insurer, and on those
252	insureds procuring one or more lines of property and casualty
253	business in this state pursuant to part VIII of chapter 626,
254	referred to in this subsection as assessable insureds.
255	1. Pursuant to the emergency assessment, each such
256	assessableinsurer shall pay to the corporation by July 1 of
257	each year an amount set by the board not exceeding 32percent
258	of its gross direct written premium for the prior year from all
259	property and casualty business in this state except for workers'
260	compensation, except that, if the Governor has declared a state
261	of emergency under s. 252.36 due to the occurrence of a covered
262	event, the amount of the assessment for the contract year may be
263	increased to an amount not exceeding 54percent of such
264	premium.
265	2.a. Pursuant to the emergency assessment, each such
266	assessable insured shall pay an amount set by the board not
267	exceeding 3 percent of the gross written premium each year for
268	all property and casualty business procured in this state except
269	workers' compensation, provided, however, if the Governor has
270	declared a state of emergency under s. 252.36 due to the
271	occurrence of a covered event, the amount of the assessment for
272	the contract year may be increased to an amount not exceeding 5
273	percent of such premium.
274	b. The emergency assessment on each such assessable
275	insured shall be collected by the surplus lines agent at the
276	time such agent collects the surplus lines tax required by s.
277	626.932 and shall be remitted by the agent to the Florida
278	Surplus Lines Service Office created pursuant to s. 626.921 at
279	the time the agent pays the surplus lines tax to the Florida
280	Surplus Lines Service Office. The emergency assessment on each
281	assessable insured procuring coverage and filing under s.
282	626.938 shall be remitted by the insured to the Florida Surplus
283	Lines Service Office at the time the insured pays the surplus
284	lines tax to the Florida Surplus Lines Service Office. The
285	emergency assessments collected shall be transferred to the
286	corporation or to the fund pursuant to subparagraph 5. on a
287	periodic basis as determined by the board. The Florida Surplus
288	Lines Service Office shall verify the proper application by
289	surplus lines agents of the emergency assessments and shall
290	assist the board in ensuring the accurate, timely collection and
291	payment of assessments by surplus lines agents as required by
292	the board. The Florida Surplus Lines Service Office shall
293	determine annually the aggregate written premium on property and
294	casualty business, except workers' compensation, procured by
295	assessable insureds and shall report such information to the
296	board in a form and at a time specified by the board to ensure
297	that the fund and the corporation can meet their financing
298	obligations.
299	3.Any assessment authority not used for the contract year
300	may be used for a subsequent contract year. If, for a subsequent
301	contract year, the board determines that the amount of revenue
302	produced under subsection (5) is insufficient to fund the
303	obligations, costs, and expenses of the fund and the
304	corporation, including repayment of revenue bonds for that
305	contract year, the board shall direct the OfficeDepartmentof
306	Insurance Regulationto levy an emergency assessment up to an
307	amount not exceeding the amount of unused assessment authority
308	from a previous contract year or years, plus an additional 32
309	percent if the Governor has declared a state of emergency under
310	s. 252.36 due to the occurrence of a covered event. Any
311	assessment authority not used for the contract year may be used
312	for a subsequent contract year. As used in this subsection, the
313	term "property and casualty business" includes all lines of
314	business identified on Form 2, Exhibit of Premiums and Losses,
315	in the annual statement required of authorized insurersby s.
316	624.424 and any rules adopted under such section, except for
317	those lines identified as accident and health insurance. The
318	annual assessments under this subparagraph shall continue as
319	long as the revenue bonds issued with respect to which the
320	assessment was imposed are outstanding, unless adequate
321	provision has been made for the payment of such bonds pursuant
322	to the documents authorizing issuance of the bonds. An
323	assessable insurer or assessable insuredshall not at any time
324	be subject to aggregate annual assessments under this
325	subparagraph of more than 32percent of premium, except that in
326	the case of a declared emergency, an assessable insurer or
327	assessable insuredshall not at any time be subject to aggregate
328	annual assessments under this subparagraph of more than 86
329	percent of premium; provided, no more than 54percent may be
330	assessed for obligations arising due to losses inany one
331	contract year.
332	4.Any rate filing or portion of a rate filing reflecting
333	a rate change attributable entirely to the assessment levied
334	under this paragraphsubparagraphshall be deemed approved when
335	made, subject to the authority of the OfficeDepartmentof
336	Insurance Regulationto require actuarial justification as to
337	the adequacy of any rate at any time. If the rate filing
338	reflects only a rate change attributable to the assessment under
339	this paragraph, the filing may consist of a certification so
340	stating.
341	5.The assessments otherwise payable to the corporation
342	pursuant to this paragraphsubparagraphshall be paid instead to
343	the fund unless and until the OfficeDepartment of Insurance
344	Regulation and the Florida Surplus Lines Service Office havehas
345	received from the corporation and the fund a notice, which shall
346	be conclusive and upon which theythe Department of Insurance
347	may rely without further inquiry, that the corporation has
348	issued bonds and the fund has no agreements in effect with local
349	governments pursuant to paragraph (c)(b). On or after the date
350	of such notice and until such date as the corporation has no
351	bonds outstanding, the fund shall have no right, title, or
352	interest in or to the assessments, except as provided in the
353	fund's agreements with the corporation.
354	6. Emergency assessments are not premium and are not
355	subject to premium or surplus lines tax, fees, or commissions,
356	however, the failure by an assessable insured to pay an
357	emergency assessment shall be treated as a failure to pay
358	premium.
359	(c)(b)Revenue bond issuance through counties or
360	municipalities.--
361	1. If the board elects to enter into agreements with local
362	governments for the issuance of revenue bonds for the benefit of
363	the fund, the board shall enter into such contracts with one or
364	more local governments, including agreements providing for the
365	pledge of revenues, as are necessary to effect such issuance.
366	The governing body of a county or municipality is authorized to
367	issue bonds as defined in s. 125.013 or s. 166.101 from time to
368	time to fund an assistance program, in conjunction with the
369	Florida Hurricane Catastrophe Fund, for the purposes set forth
370	in this section or for the purpose of paying the costs of
371	construction, reconstruction, repair, restoration, and other
372	costs associated with damage to properties of policyholders of
373	covered policies due to the occurrence of a hurricane by
374	assuring that policyholders located in this state are able to
375	recover claims under property insurance policies after a covered
376	event.
377	2. In order to avoid needless and indiscriminate
378	proliferation, duplication, and fragmentation of such assistance
379	programs, any local government may provide for the payment of
380	fund reimbursements, regardless of whether or not the losses for
381	which reimbursement is made occurred within or outside of the
382	territorial jurisdiction of the local government.
383	3. The state hereby covenants with holders of bonds issued
384	under this paragraph that the state will not repeal or abrogate
385	the power of the board to direct the OfficeDepartmentof
386	Insurance Regulationto levy the assessments and to collect the
387	proceeds of the revenues pledged to the payment of such bonds as
388	long as any such bonds remain outstanding unless adequate
389	provision has been made for the payment of such bonds pursuant
390	to the documents authorizing the issuance of such bonds.
391	4. There shall be no liability on the part of, and no
392	cause of action shall arise against any members or employees of
393	the governing body of a local government for any actions taken
394	by them in the performance of their duties under this paragraph.
395	(d)(c)Florida Hurricane Catastrophe Fund Finance
396	Corporation.--
397	1. In addition to the findings and declarations in
398	subsection (1), the Legislature also finds and declares that:
399	a. The public benefits corporation created under this
400	paragraph will provide a mechanism necessary for the cost-
401	effective and efficient issuance of bonds. This mechanism will
402	eliminate unnecessary costs in the bond issuance process,
403	thereby increasing the amounts available to pay reimbursement
404	for losses to property sustained as a result of hurricane
405	damage.
406	b. The purpose of such bonds is to fund reimbursements
407	through the Florida Hurricane Catastrophe Fund to pay for the
408	costs of construction, reconstruction, repair, restoration, and
409	other costs associated with damage to properties of
410	policyholders of covered policies due to the occurrence of a
411	hurricane.
412	c. The efficacy of the financing mechanism will be
413	enhanced by the corporation's ownership of the assessments, by
414	the insulation of the assessments from possible bankruptcy
415	proceedings, and by covenants of the state with the
416	corporation's bondholders.
417	2.a. There is created a public benefits corporation, which
418	is an instrumentality of the state, to be known as the Florida
419	Hurricane Catastrophe Fund Finance Corporation.
420	b. The corporation shall operate under a five-member board
421	of directors consisting of the Governor or a designee, the
422	Comptroller or a designee, the Treasurer or a designee, the
423	director of the Division of Bond Finance of the State Board of
424	Administration, and the chief operating officer of the Florida
425	Hurricane Catastrophe Fund.
426	c. The corporation has all of the powers of corporations
427	under chapter 607 and under chapter 617, subject only to the
428	provisions of this subsection.
429	d. The corporation may issue bonds and engage in such
430	other financial transactions as are necessary to provide
431	sufficient funds to achieve the purposes of this section.
432	e. The corporation may invest in any of the investments
433	authorized under s. 215.47.
434	f. There shall be no liability on the part of, and no
435	cause of action shall arise against, any board members or
436	employees of the corporation for any actions taken by them in
437	the performance of their duties under this paragraph.
438	3.a. In actions under chapter 75 to validate any bonds
439	issued by the corporation, the notice required by s. 75.06 shall
440	be published only in Leon County and in two newspapers of
441	general circulation in the state, and the complaint and order of
442	the court shall be served only on the State Attorney of the
443	Second Judicial Circuit.
444	b. The state hereby covenants with holders of bonds of the
445	corporation that the state will not repeal or abrogate the power
446	of the board to direct the OfficeDepartment of Insurance
447	Regulationto levy the assessments and to collect the proceeds
448	of the revenues pledged to the payment of such bonds as long as
449	any such bonds remain outstanding unless adequate provision has
450	been made for the payment of such bonds pursuant to the
451	documents authorizing the issuance of such bonds.
452	4. The bonds of the corporation are not a debt of the
453	state or of any political subdivision, and neither the state nor
454	any political subdivision is liable on such bonds. The
455	corporation does not have the power to pledge the credit, the
456	revenues, or the taxing power of the state or of any political
457	subdivision. The credit, revenues, or taxing power of the state
458	or of any political subdivision shall not be deemed to be
459	pledged to the payment of any bonds of the corporation.
460	5.a. The property, revenues, and other assets of the
461	corporation; the transactions and operations of the corporation
462	and the income from such transactions and operations; and all
463	bonds issued under this paragraph and interest on such bonds are
464	exempt from taxation by the state and any political subdivision,
465	including the intangibles tax under chapter 199 and the income
466	tax under chapter 220. This exemption does not apply to any tax
467	imposed by chapter 220 on interest, income, or profits on debt
468	obligations owned by corporations other than the Florida
469	Hurricane Catastrophe Fund Finance Corporation.
470	b. All bonds of the corporation shall be and constitute
471	legal investments without limitation for all public bodies of
472	this state; for all banks, trust companies, savings banks,
473	savings associations, savings and loan associations, and
474	investment companies; for all administrators, executors,
475	trustees, and other fiduciaries; for all insurance companies and
476	associations and other persons carrying on an insurance
477	business; and for all other persons who are now or may hereafter
478	be authorized to invest in bonds or other obligations of the
479	state and shall be and constitute eligible securities to be
480	deposited as collateral for the security of any state, county,
481	municipal, or other public funds. This sub-subparagraph shall be
482	considered as additional and supplemental authority and shall
483	not be limited without specific reference to this sub-
484	subparagraph.
485	6. The corporation and its corporate existence shall
486	continue until terminated by law; however, no such law shall
487	take effect as long as the corporation has bonds outstanding
488	unless adequate provision has been made for the payment of such
489	bonds pursuant to the documents authorizing the issuance of such
490	bonds. Upon termination of the existence of the corporation, all
491	of its rights and properties in excess of its obligations shall
492	pass to and be vested in the state.
493	(e)(d)Protection of bondholders.--
494	1. As long as the corporation has any bonds outstanding,
495	neither the fund nor the corporation shall have the authority to
496	file a voluntary petition under chapter 9 of the federal
497	Bankruptcy Code or such corresponding chapter or sections as may
498	be in effect, from time to time, and neither any public officer
499	nor any organization, entity, or other person shall authorize
500	the fund or the corporation to be or become a debtor under
501	chapter 9 of the federal Bankruptcy Code or such corresponding
502	chapter or sections as may be in effect, from time to time,
503	during any such period.
504	2. The state hereby covenants with holders of bonds of the
505	corporation that the state will not limit or alter the denial of
506	authority under this paragraph or the rights under this section
507	vested in the fund or the corporation to fulfill the terms of
508	any agreements made with such bondholders or in any way impair
509	the rights and remedies of such bondholders as long as any such
510	bonds remain outstanding unless adequate provision has been made
511	for the payment of such bonds pursuant to the documents
512	authorizing the issuance of such bonds.
513	3. Notwithstanding any other provision of law, any pledge
514	of or other security interest in revenue, money, accounts,
515	contract rights, general intangibles, or other personal property
516	made or created by the fund or the corporation shall be valid,
517	binding, and perfected from the time such pledge is made or
518	other security interest attaches without any physical delivery
519	of the collateral or further act and the lien of any such pledge
520	or other security interest shall be valid, binding, and
521	perfected against all parties having claims of any kind in tort,
522	contract, or otherwise against the fund or the corporation
523	irrespective of whether or not such parties have notice of such
524	claims. No instrument by which such a pledge or security
525	interest is created nor any financing statement need be recorded
526	or filed.
527	(7) ADDITIONAL POWERS AND DUTIES.--
528	(a) The board may procure reinsurance from reinsurers
529	acceptable to the Office of Insurance Regulationapproved under
530	s. 624.610for the purpose of maximizing the capacity of the
531	fund.
532	(c) Each fiscal year, the Legislature shall appropriate
533	from the investment income of the Florida Hurricane Catastrophe
534	Fund an amount no less than $10 million and no more than 35
535	percent of the investment income based upon the most recent
536	fiscal year-end audited financial statementsfrom the prior
537	fiscal yearfor the purpose of providing funding for local
538	governments, state agencies, public and private educational
539	institutions, and nonprofit organizations to support programs
540	intended to improve hurricane preparedness, reduce potential
541	losses in the event of a hurricane, provide research into means
542	to reduce such losses, educate or inform the public as to means
543	to reduce hurricane losses, assist the public in determining the
544	appropriateness of particular upgrades to structures or in the
545	financing of such upgrades, or protect local infrastructure from
546	potential damage from a hurricane. Moneys shall first be
547	available for appropriation under this paragraph in fiscal year
548	1997-1998. Moneys in excess of the $10 million specified in this
549	paragraph shall not be available for appropriation under this
550	paragraph if the State Board of Administration finds that an
551	appropriation of investment income from the fund would
552	jeopardize the actuarial soundness of the fund.
553	Section 2. If any law amended by this act was also amended
554	by a law enacted at the 2003 Regular Session of the Legislature
555	or at the 2003 Special Session A of the Legislature, such laws
556	shall be construed as if they had been enacted at the same
557	session of the Legislature, and full effect shall be given to
558	each if possible.
559	Section 3. This act shall take effect upon becoming a law.