Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 1262
                                Barcode 303624                          
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                   Comm: WD            .                                
                  04/16/2013           .                                

       The Committee on Banking and Insurance (Hays) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Effective June 1, 2013, paragraph (n) of
    6  subsection (2), paragraph (c) of subsection (4), and paragraph
    7  (d) of subsection (6) of section 215.555, Florida Statutes, are
    8  amended to read:
    9         215.555 Florida Hurricane Catastrophe Fund.—
   10         (2) DEFINITIONS.—As used in this section:
   11         (n) “Corporation” means the State Board of Administration
   12  Florida Hurricane Catastrophe Fund Finance Corporation created
   13  in paragraph (6)(d).
   15         (c)1. The contract must shall also provide that the
   16  obligation of the board with respect to all contracts covering a
   17  particular contract year shall not exceed the actual claims
   18  paying capacity of the fund up to the limit specified in this
   19  paragraph.
   20         1. Fund limits are as follow:
   21         a. For the 2013-2014 contract year, the limit is $17
   22  billion.
   23         b. For the 2014-2015 contract year and subsequent contract
   24  years, the limit is $16 billion.
   25         2. After the 2014-2015 contract year, if a limit of $17
   26  billion for that contract year, unless the board determines that
   27  there is sufficient estimated claims-paying capacity to provide
   28  $16 $17 billion of capacity for the current contract year and an
   29  additional $16 $17 billion of capacity for subsequent contract
   30  years. If the board makes such a determination, the estimated
   31  claims-paying capacity for the particular contract year shall be
   32  determined by adding to the $16 $17 billion limit one-half of
   33  the fund’s estimated claims-paying capacity in excess of $32 $34
   34  billion. However, the dollar growth in the limit may not
   35  increase in any year by an amount greater than the dollar growth
   36  of the balance of the fund as of December 31, less any premiums
   37  or interest attributable to optional coverage, as defined by
   38  rule, which occurred over the prior calendar year.
   39         3.2. In May and October of the contract year, the board
   40  shall publish in the Florida Administrative Register Weekly a
   41  statement of the fund’s estimated borrowing capacity, the fund’s
   42  estimated claims-paying capacity, and the projected balance of
   43  the fund as of December 31. After the end of each calendar year,
   44  the board shall notify insurers of the estimated borrowing
   45  capacity, estimated claims-paying capacity, and the balance of
   46  the fund as of December 31 to provide insurers with data
   47  necessary to assist them in determining their retention and
   48  projected payout from the fund for loss reimbursement purposes.
   49  In conjunction with the development of the premium formula, as
   50  provided for in subsection (5), the board shall publish factors
   51  or multiples that assist insurers in determining their retention
   52  and projected payout for the next contract year. For all
   53  regulatory and reinsurance purposes, an insurer may calculate
   54  its projected payout from the fund as its share of the total
   55  fund premium for the current contract year multiplied by the sum
   56  of the projected balance of the fund as of December 31 and the
   57  estimated borrowing capacity for that contract year as reported
   58  under this subparagraph.
   59         (6) REVENUE BONDS.—
   60         (d) State Board of Administration Florida Hurricane
   61  Catastrophe Fund Finance Corporation.—
   62         1. In addition to the findings and declarations in
   63  subsection (1), the Legislature also finds and declares that:
   64         a. The public benefits corporation created under this
   65  paragraph will provide a mechanism necessary for the cost
   66  effective and efficient issuance of bonds. This mechanism will
   67  eliminate unnecessary costs in the bond issuance process,
   68  thereby increasing the amounts available for to pay
   69  reimbursement for losses to property sustained as a result of
   70  hurricane damage.
   71         b. The purpose of such bonds is to fund reimbursements
   72  through the Florida Hurricane Catastrophe Fund to pay for the
   73  costs of construction, reconstruction, repair, restoration, and
   74  other costs associated with damage to properties of
   75  policyholders of covered policies due to the occurrence of a
   76  hurricane.
   77         c. The efficacy of the financing mechanism will be enhanced
   78  by the corporation’s ownership of the assessments, by the
   79  insulation of the assessments from possible bankruptcy
   80  proceedings, and by covenants of the state with the
   81  corporation’s bondholders.
   82         2.a.The State Board of Administration Finance Corporation
   83  There is created, which is a public benefits corporation and,
   84  which is an instrumentality of the state, to be known as the
   85  Florida Hurricane Catastrophe Fund Finance Corporation. The
   86  State Board of Administration Finance Corporation is for all
   87  purposes the successor to the Florida Hurricane Catastrophe Fund
   88  Finance Corporation.
   89         a.b. The corporation shall operate under a five-member
   90  board of directors consisting of the Governor or a designee, the
   91  Chief Financial Officer or a designee, the Attorney General or a
   92  designee, the director of the Division of Bond Finance of the
   93  State Board of Administration, and the Chief Operating Officer
   94  senior employee of the State Board of Administration responsible
   95  for operations of the Florida Hurricane Catastrophe Fund.
   96         b.c. The corporation has all of the powers of corporations
   97  under chapter 607 and under chapter 617, subject only to the
   98  provisions of this subsection.
   99         c.d. The corporation may issue bonds and engage in such
  100  other financial transactions as are necessary to provide
  101  sufficient funds to achieve the purposes of this section.
  102         d.e. The corporation may invest in any of the investments
  103  authorized under s. 215.47.
  104         e.f. There is shall be no liability on the part of, and no
  105  cause of action shall arise against, any board members or
  106  employees of the corporation for any actions taken by them in
  107  the performance of their duties under this paragraph.
  108         3.a. In actions under chapter 75 to validate any bonds
  109  issued by the corporation, the notice required by s. 75.06 must
  110  shall be published in two newspapers of general circulation in
  111  the state, and the complaint and order of the court shall be
  112  served only on the State Attorney of the Second Judicial
  113  Circuit.
  114         b. The state hereby covenants with holders of bonds of the
  115  corporation that the state will not repeal or abrogate the power
  116  of the board to direct the Office of Insurance Regulation to
  117  levy the assessments and to collect the proceeds of the revenues
  118  pledged to the payment of such bonds as long as any such bonds
  119  remain outstanding unless adequate provision has been made for
  120  the payment of such bonds pursuant to the documents authorizing
  121  the issuance of the such bonds.
  122         c.4. The bonds of the corporation are not a debt of the
  123  state or of any political subdivision, and neither the state nor
  124  any political subdivision is liable on such bonds. The
  125  corporation may not does not have the power to pledge the
  126  credit, the revenues, or the taxing power of the state or of any
  127  political subdivision. The credit, revenues, or taxing power of
  128  the state or of any political subdivision may shall not be
  129  deemed to be pledged to the payment of any bonds of the
  130  corporation.
  131         d.5.a. The property, revenues, and other assets of the
  132  corporation; the transactions and operations of the corporation
  133  and the income from such transactions and operations; and all
  134  bonds issued under this paragraph and interest on such bonds are
  135  exempt from taxation by the state and any political subdivision,
  136  including the intangibles tax under chapter 199 and the income
  137  tax under chapter 220. This exemption does not apply to any tax
  138  imposed by chapter 220 on interest, income, or profits on debt
  139  obligations owned by corporations other than the State Board of
  140  Administration Florida Hurricane Catastrophe Fund Finance
  141  Corporation.
  142         e.b. All bonds of the corporation are shall be and
  143  constitute legal investments without limitation for all public
  144  bodies of this state; for all banks, trust companies, savings
  145  banks, savings associations, savings and loan associations, and
  146  investment companies; for all administrators, executors,
  147  trustees, and other fiduciaries; for all insurance companies and
  148  associations and other persons carrying on an insurance
  149  business; and for all other persons who are now or may hereafter
  150  be authorized to invest in bonds or other obligations of the
  151  state and are shall be and constitute eligible securities to be
  152  deposited as collateral for the security of any state, county,
  153  municipal, or other public funds. This sub-subparagraph shall be
  154  considered as additional and supplemental authority and may
  155  shall not be limited without specific reference to this sub
  156  subparagraph.
  157         4.6. The corporation and its corporate existence shall
  158  continue until terminated by law; however, no such law shall
  159  take effect as long as the corporation has bonds outstanding
  160  unless adequate provision has been made for the payment of such
  161  bonds pursuant to the documents authorizing the issuance of such
  162  bonds. Upon termination of the existence of the corporation, all
  163  of its rights and properties in excess of its obligations shall
  164  pass to and be vested in the state.
  165         Section 2. Except as otherwise expressly provided in this
  166  act, this act shall take effect upon becoming a law.
  168  ================= T I T L E  A M E N D M E N T ================
  169         And the title is amended as follows:
  170         Delete everything before the enacting clause
  171  and insert:
  172                        A bill to be entitled                      
  173         An act relating to the Florida Hurricane Catastrophe
  174         Fund; amending s. 215.555, F.S.; changing the name of
  175         the Florida Hurricane Catastrophe Fund Finance
  176         Corporation to the State Board of Administration
  177         Finance Corporation; providing for the phase-in of
  178         changes to the claims-paying capacity limits of the
  179         fund; providing effective dates.