Senate Bill sb1624c1

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    Florida Senate - 2007                           CS for SB 1624

    By the Committee on Banking and Insurance; and Senator Bennett





    597-2457-07

  1                      A bill to be entitled

  2         An act relating to owner-controlled insurance

  3         programs for public construction projects;

  4         amending s. 255.0517, F.S.; redefining the term

  5         "specified contracted work site"; defining the

  6         term "capital infrastructure improvement

  7         program"; requiring purchase of

  8         owner-controlled insurance in connection with a

  9         public construction project if the program

10         maintains completed operations insurance

11         coverage for no less than 10 years; exempting

12         contractors and subcontractors working under a

13         construction project insured by an

14         owner-controlled insurance program from

15         individually satisfying eligibility

16         requirements for large deductible workers'

17         compensation rating plans; authorizing such

18         contractors and subcontractors to combine their

19         payrolls under the owner-controlled insurance

20         program for workers' compensation coverage as

21         long as the minimum deductible for the project

22         is $100,000 or more and the standard estimated

23         premium is $500,000 or more; providing for a

24         capital infrastructure improvement program;

25         providing limitations concerning when the

26         construction of a single public agency service,

27         system, facility, or other public work may be

28         combined with the construction of another

29         public agency service, system, facility, or

30         other public work to satisfy the amount

31         specified for the purchase requirements;

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    Florida Senate - 2007                           CS for SB 1624
    597-2457-07




 1         providing an exemption for any project of a

 2         public agency which is committed to an ongoing

 3         owner-controlled insurance program issued

 4         before October 1, 2007; providing an effective

 5         date.

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 7  Be It Enacted by the Legislature of the State of Florida:

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 9         Section 1.  Section 255.0517, Florida Statutes, is

10  amended to read:

11         255.0517  Owner-controlled insurance programs for

12  public construction projects.--

13         (1)  DEFINITIONS.--As used in this section, the term:

14         (a)  "Owner-controlled insurance program" means a

15  consolidated insurance program or series of insurance policies

16  issued to a public agency that may provide one or more of the

17  following types of insurance coverage for any contractor or

18  subcontractor working at specified or multiple contracted work

19  sites of a public construction project: general liability,

20  property damage excluding coverage for damage to real

21  property, workers' compensation, employer's liability, or

22  pollution liability coverage.

23         (b)  "Specified contracted work site" means

24  construction being performed during one or more fiscal years

25  at one site or a series of contiguous sites separated only by

26  a street, roadway, waterway, or railroad right-of-way or along

27  a single continuous system for the provision for water and

28  power.

29         (c)  "Multiple contracted work site" means construction

30  being performed at multiple sites during one or more fiscal

31  years that is part of an ongoing capital infrastructure

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    Florida Senate - 2007                           CS for SB 1624
    597-2457-07




 1  improvement program or involves the construction of one or

 2  more public schools.

 3         (d)  "Capital infrastructure improvement program" means

 4  a public agency program involving the construction of a public

 5  service, system, facility, or other public work, including,

 6  but not limited to, potable water, wastewater, reclaimed

 7  water, stormwater, drainage, streets or roads, intermodal

 8  transportation, electric service, gas service, airport

 9  services or seaport services, and services, systems,

10  facilities, or other public works incidental thereto.

11         (2)  PURCHASE REQUIREMENTS.--A state agency, political

12  subdivision, state university, community college, airport

13  authority, or other public agency in this state, or any

14  instrumentality thereof, may only purchase an owner-controlled

15  insurance program in connection with a public construction

16  project if it is determined necessary and in the best interest

17  of the public agency and if all of the following conditions

18  are met:

19         (a)  The estimated total cost of the project is:

20         1.  Seventy-five million dollars or more;

21         2.  Thirty million dollars or more, if the project is

22  for the construction or renovation of two or more public

23  schools during a fiscal year; or

24         3.  Ten million dollars or more, if the project is for

25  the construction or renovation of one public school,

26  regardless of whether the project's duration extends beyond a

27  fiscal year.

28         (b)  The program maintains completed operations

29  insurance coverage for a term during which the coverage is

30  reasonably commercially available, as determined by the public

31  agency, but for no less than 10 5 years.

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    Florida Senate - 2007                           CS for SB 1624
    597-2457-07




 1         (c)  The bid or proposal specifications for the project

 2  clearly specify, for all bidders or proposers, the insurance

 3  coverage provided under the program and the minimum safety

 4  requirements that must be met.

 5         (d)  The program does not prohibit a contractor or

 6  subcontractor from purchasing any additional insurance

 7  coverage that the contractor or subcontractor believes is

 8  necessary for protection against any liability arising out of

 9  the contract. The cost of the additional insurance must be

10  disclosed to the public agency.

11         (e)  The program does not include surety insurance.

12         (f)  The public agency may only purchase an

13  owner-controlled insurance policy that has a deductible or

14  self-insured retention if the deductible or self-insured

15  retention does not exceed $1 million per occurrence.

16  Contractors, including any owner or principal acting as a

17  general contractor, and subcontractors performing work under a

18  construction project insured by an owner-controlled insurance

19  program are not required to individually satisfy eligibility

20  requirements for large deductible workers' compensation rating

21  plans. Such contractors and subcontractors may combine their

22  payrolls under the owner-controlled insurance program for

23  workers' compensation coverage as long as the minimum

24  deductible for the construction project is $100,000 or more

25  and the standard estimated premium for the construction

26  project is $500,000 or more.

27         (g)  The public agency is responsible for payment of

28  the applicable deductibles of all claims.

29         (3)  CAPITAL INFRASTRUCTURE IMPROVEMENT PROGRAM.--The

30  construction of a single public agency service, system,

31  facility, or other public work may not be combined with the

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    Florida Senate - 2007                           CS for SB 1624
    597-2457-07




 1  construction of another public agency service, system,

 2  facility, or other public work to satisfy the amount specified

 3  in subparagraph (2)(a)1. unless the multiple services,

 4  systems, facilities, or other public works are part of:

 5         (a)  A capital infrastructure improvement program that

 6  will be performed under a single prime contract; or

 7         (b)  An interrelated capital infrastructure improvement

 8  program that interconnects the housing or transportation of

 9  persons or cargo arriving via an airport or seaport, and the

10  combined estimated costs of the construction projects exceed

11  $125 million.

12         (4)(3)  EXEMPTIONS.--This section does not apply to the

13  following projects:

14         (a)  Any project of the Department of Transportation

15  which is authorized under s. 337.11;

16         (b)  Any existing project or projects of a public

17  agency which are the subject of an ongoing, owner-controlled

18  insurance program issued before October 1, 2004; or

19         (c)  Any project of a public agency which is advertised

20  by the public agency before October 1, 2004, for the purpose

21  of receiving bids or proposals for the project; or.

22         (d)  Any project or projects of a public agency which

23  are committed to an ongoing, owner-controlled insurance

24  program issued before October 1, 2007.

25         Section 2.  This act shall take effect October 1, 2007.

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    Florida Senate - 2007                           CS for SB 1624
    597-2457-07




 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1624

 3                                 

 4  The committee substitute provides the following changes
    related to the use of an owner-controlled insurance programs
 5  (OCIPs) by a public agency:

 6  1.   Clarifies when a capital infrastructure improvement
         program at multiple work sites meets the $75 million
 7       threshold requirement in order for the construction
         project to be eligible to use an OCIP.
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    2.   Provides that individual contractors and subcontractors
 9       are not required to individually satisfy premium and
         payroll eligibility requirements for large deductible
10       workers' compensation rating plans under OCIP if certain
         conditions are met.
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    3.   Requires an OCIP to provide completed operations coverage
12       for the full 10-year period of liability under the
         statute of repose.
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