Florida Senate - 2016                              CS for SB 584
       By the Committee on Community Affairs; and Senator Brandes
       578-01769-16                                           2016584c1
    1                        A bill to be entitled                      
    2         An act relating to the peril of flood; creating s.
    3         252.64, F.S.; authorizing the Division of Emergency
    4         Management to administer a matching grant program to
    5         provide up to $50 million annually in technical and
    6         financial assistance to local governments to implement
    7         certain flood risk reduction policies and projects;
    8         limiting certain administrative costs of the division;
    9         requiring the division to rank applications for
   10         assistance based on certain criteria; authorizing the
   11         division to adopt rules; capping funds for
   12         administration; requiring the division to establish a
   13         system to monitor grants; amending s. 380.507, F.S.;
   14         authorizing the Florida Communities Trust to
   15         undertake, coordinate, or fund flood mitigation
   16         projects and to acquire and dispose of real and
   17         personal property or specified interest when necessary
   18         or appropriate to reduce flood hazards; amending s.
   19         380.508, F.S.; specifying the purpose of acceptable
   20         flood mitigation projects undertaken, coordinated, or
   21         funded by the trust; amending s. 380.510, F.S.;
   22         conforming a cross-reference; specifying certain
   23         required conditions to be included in trust grant or
   24         loan agreements for land acquisition; amending s.
   25         472.0366, F.S.; authorizing the division to contract
   26         with third parties to store elevation certificates and
   27         maintain a database for public access to such
   28         certificates; amending s. 627.715, F.S.; authorizing
   29         an insurer to issue flood insurance policies on a
   30         flexible basis; extending the date by which an insurer
   31         may use certain statutory rate standards for
   32         establishing and using flood coverage rates; extending
   33         the date by which a surplus lines agent may export a
   34         contract or endorsement providing flood coverage to an
   35         eligible surplus lines insurer without making a
   36         diligent effort to seek such coverage from three or
   37         more authorized insurers; providing an effective date.
   39  Be It Enacted by the Legislature of the State of Florida:
   41         Section 1. Section 252.64, Florida Statutes, is created to
   42  read:
   43         252.64 Local government flood hazard risk reduction
   44  assistance.—
   45         (1) The Division of Emergency Management is authorized to
   46  administer a matching grant program to provide up to $50 million
   47  annually in technical and financial assistance, subject to
   48  appropriation, to local governments to implement flood risk
   49  reduction policies and projects consistent with the coastal
   50  management element of a local government comprehensive plan
   51  required under s. 163.3178, an approved local hazard mitigation
   52  plan, or an adaptation action plan. To administer the program,
   53  the division may not spend more than 8 percent of funds
   54  appropriated to it under this section on administration.
   55         (2)The division shall rank each received application for
   56  assistance and shall give priority to:
   57         (a) Projects that provide the greatest scoring improvement
   58  within the National Flood Insurance Program Community Rating
   59  System;
   60         (b) The acquisition of flood-prone property for conversion
   61  to open space in perpetuity, or the development of natural or
   62  grey infrastructure, to reduce the risk of flooding;
   63         (c) Applications submitted by local governments that have
   64  encountered a significant increase in National Flood Insurance
   65  premiums during the preceding 5 years;
   66         (d) Projects that will protect the greatest number of
   67  structures from frequent flooding;
   68         (e) Applications that exceed the dollar-for-dollar matching
   69  funds threshold; and
   70         (f) Local governments that participate in the National
   71  Flood Insurance Program Community Rating System.
   72         (3) The division may adopt rules to administer this section
   73  and shall consult with the state land planning agency in
   74  developing ranking criteria for project selection.
   75         (4) A recipient may not spend more than 8 percent of grant
   76  funds on administration.
   77         (5)The division shall establish a system to monitor
   78  grants, including site visits, to ensure proper expenditure of
   79  funds and compliance with the conditions of the recipient’s
   80  contract.
   81         Section 2. Present paragraphs (c) through (g) of subsection
   82  (2) of section 380.507, Florida Statutes, are redesignated as
   83  paragraphs (d) through (h), respectively, a new paragraph (c) is
   84  added to that subsection, and subsection (4) of that section is
   85  amended, to read:
   86         380.507 Powers of the trust.—The trust shall have all the
   87  powers necessary or convenient to carry out the purposes and
   88  provisions of this part, including:
   89         (2) To undertake, coordinate, or fund activities and
   90  projects which will help bring local comprehensive plans into
   91  compliance and help implement the goals, objectives, and
   92  policies of the conservation, recreation and open space, and
   93  coastal elements of local comprehensive plans, or which will
   94  otherwise serve to conserve natural resources and resolve land
   95  use conflicts, including, but not limited to:
   96         (c) Flood mitigation projects.
   97         (4) To acquire and dispose of real and personal property or
   98  any interest therein when necessary or appropriate to protect
   99  the natural environment, provide public access or public
  100  recreational facilities, including the Florida National Scenic
  101  Trail, preserve wildlife habitat areas, provide access for
  102  managing acquired lands, reduce flood hazards, or otherwise
  103  carry out the purposes of this part. If the trust acquires land
  104  for permanent state ownership, title to such land shall be
  105  vested in the Board of Trustees of the Internal Improvement
  106  Trust Fund; otherwise, title to property acquired in partnership
  107  with a county or municipality shall vest in the name of the
  108  local government. Notwithstanding any other provision of law,
  109  the trust may enter into an option agreement to purchase lands
  110  included in projects approved according to this part, when
  111  necessary to reserve lands during the preparation of project
  112  plans and during acquisition proceedings. The consideration for
  113  an option shall not exceed $100,000.
  114         Section 3. Present paragraphs (c) through (f) of subsection
  115  (4) of section 380.508, Florida Statutes, are redesignated as
  116  paragraphs (d) through (g), respectively, and a new paragraph
  117  (c) is added to that subsection, to read:
  118         380.508 Projects; development, review, and approval.—
  119         (4) Projects or activities which the trust undertakes,
  120  coordinates, or funds in any manner shall comply with the
  121  following guidelines:
  122         (c) The purpose of acceptable flood mitigation projects,
  123  which should serve to lower a community’s class rating under the
  124  National Flood Insurance Program Community Rating System, shall
  125  be:
  126         1. To acquire interests in lands designated as severe
  127  repetitive loss properties within coastal “V,” “VE,” and “V1-30”
  128  designated flood zones, as designated by the Federal Emergency
  129  Management Agency, which are suitable for enhancing beach and
  130  coastal access for the public, creating public parks, and
  131  providing flood control; or
  132         2. To provide technical and financial assistance to local
  133  governments to implement flood risk reduction policies and
  134  projects consistent with the coastal element of the local
  135  government comprehensive plan required under s. 163.3178, an
  136  approved local hazard mitigation plan, or an adaptation action
  137  plan.
  139         Project costs may include costs of providing parks, open
  140  space, public access sites, scenic easements, and other areas
  141  and facilities serving the public where such features are part
  142  of a project plan approved according to this part. In
  143  undertaking or coordinating projects or activities authorized by
  144  this part, the trust shall, when appropriate, use and promote
  145  the use of creative land acquisition methods, including the
  146  acquisition of less than fee interest through, among other
  147  methods, conservation easements, transfer of development rights,
  148  leases, and leaseback arrangements. The trust shall assist local
  149  governments in the use of sound alternative methods of financing
  150  for funding projects and activities authorized under this part.
  151  Any funds over and above eligible project costs, which remain
  152  after completion of a project approved according to this part,
  153  shall be transmitted to the state and deposited into the Florida
  154  Forever Trust Fund.
  155         Section 4. Paragraph (d) of subsection (3) of section
  156  380.510, Florida Statutes, is amended, and paragraph (f) is
  157  added to that subsection, to read:
  158         380.510 Conditions of grants and loans.—
  159         (3) In the case of a grant or loan for land acquisition,
  160  agreements shall provide all of the following:
  161         (d) If any essential term or condition of a grant or loan
  162  is violated, title to all interest in real property acquired
  163  with state funds shall be conveyed or revert to the Board of
  164  Trustees of the Internal Improvement Trust Fund. The trust shall
  165  treat such property in accordance with s. 380.508(4)(g) s.
  166  380.508(4)(f).
  167         (f) Land acquired for flood mitigation projects must be
  168  maintained strictly for flood mitigation purposes or
  169  conservation purposes. Conveyance of such lands to private
  170  entities must contain conditions, covenants, restrictions, or
  171  other provisions that ensure that the land will be maintained
  172  for flood mitigation or conservation purposes.
  174         Any deed or other instrument of conveyance whereby a
  175  nonprofit organization or local government acquires real
  176  property under this section shall set forth the interest of the
  177  state. The trust shall keep at least one copy of any such
  178  instrument and shall provide at least one copy to the Board of
  179  Trustees of the Internal Improvement Trust Fund.
  180         Section 5. Subsection (3) is added to section 472.0366,
  181  Florida Statutes, to read:
  182         472.0366 Elevation certificates; requirements for surveyors
  183  and mappers.—
  184         (3) The division may contract with a third party to store
  185  elevation certificates received pursuant to this section. The
  186  division may also contract with a third party to maintain a
  187  centralized database allowing the public to access elevation
  188  certificates and the data contained within the certificates.
  189         Section 6. Section 627.715, Florida Statutes, is amended to
  190  read:
  191         627.715 Flood insurance.—An authorized insurer may issue an
  192  insurance policy, contract, or endorsement providing personal
  193  lines residential coverage for the peril of flood on any
  194  structure or the contents of personal property contained
  195  therein, subject to this section. This section does not apply to
  196  commercial lines residential or commercial lines nonresidential
  197  coverage for the peril of flood. This section also does not
  198  apply to coverage for the peril of flood that is excess coverage
  199  over any other insurance covering the peril of flood. An insurer
  200  may issue flood insurance policies, contracts, or endorsements
  201  on a standard, preferred, customized, flexible, or supplemental
  202  basis.
  203         (1)(a)1. Standard flood insurance must cover only losses
  204  from the peril of flood, as defined in paragraph (b), equivalent
  205  to that provided under a standard flood insurance policy under
  206  the National Flood Insurance Program. Standard flood insurance
  207  issued under this section must provide the same coverage,
  208  including deductibles and adjustment of losses, as that provided
  209  under a standard flood insurance policy under the National Flood
  210  Insurance Program.
  211         2. Preferred flood insurance must include the same coverage
  212  as standard flood insurance but:
  213         a. Include, within the definition of “flood,” losses from
  214  water intrusion originating from outside the structure that are
  215  not otherwise covered under the definition of “flood” provided
  216  in paragraph (b).
  217         b. Include coverage for additional living expenses.
  218         c. Require that any loss under personal property or
  219  contents coverage that is repaired or replaced be adjusted only
  220  on the basis of replacement costs up to the policy limits.
  221         3. Customized flood insurance must include coverage that is
  222  broader than the coverage provided under standard flood
  223  insurance.
  224         4. Flexible flood insurance must cover losses from the
  225  peril of flood, as defined in paragraph (b), and may also
  226  include coverage for losses from water intrusion originating
  227  from outside the structure which is not otherwise covered by the
  228  definition of flood. Flexible flood insurance must include one
  229  or more of the following provisions:
  230         a. An agreement between the insurer and the insured that
  231  the flood coverage is in a specified amount, such as coverage
  232  that is limited to the total amount of each outstanding mortgage
  233  applicable to the covered property.
  234         b. A requirement for a deductible in an amount authorized
  235  under s. 627.701, including a deductible in an amount authorized
  236  for hurricanes.
  237         c. A requirement that flood loss to a dwelling be adjusted
  238  in accordance with s. 627.7011(3) or adjusted only on the basis
  239  of the actual cash value of the property.
  240         d. A restriction limiting flood coverage to the principal
  241  building defined in the policy.
  242         e. A provision including or excluding coverage for
  243  additional living expenses.
  244         f. A provision excluding coverage for personal property or
  245  contents as to the peril of flood.
  246         5. Supplemental flood insurance may provide coverage
  247  designed to supplement a flood policy obtained from the National
  248  Flood Insurance Program or from an insurer issuing standard or
  249  preferred flood insurance pursuant to this section. Supplemental
  250  flood insurance may provide, but need not be limited to,
  251  coverage for jewelry, art, deductibles, and additional living
  252  expenses.
  253         (b) “Flood” means a general and temporary condition of
  254  partial or complete inundation of two or more acres of normally
  255  dry land area or of two or more properties, at least one of
  256  which is the policyholder’s property, from:
  257         1. Overflow of inland or tidal waters;
  258         2. Unusual and rapid accumulation or runoff of surface
  259  waters from any source;
  260         3. Mudflow; or
  261         4. Collapse or subsidence of land along the shore of a lake
  262  or similar body of water as a result of erosion or undermining
  263  caused by waves or currents of water exceeding anticipated
  264  cyclical levels that result in a flood as defined in this
  265  paragraph.
  266         (2) Flood coverage deductibles and policy limits pursuant
  267  to this section must be prominently noted on the policy
  268  declarations page or face page.
  269         (3)(a) An insurer may establish and use flood coverage
  270  rates in accordance with the rate standards provided in s.
  271  627.062.
  272         (b) For flood coverage rates filed with the office before
  273  October 1, 2025 2019, the insurer may also establish and use
  274  such rates in accordance with the rates, rating schedules, or
  275  rating manuals filed by the insurer with the office which allow
  276  the insurer a reasonable rate of return on flood coverage
  277  written in this state. Flood coverage rates established pursuant
  278  to this paragraph are not subject to s. 627.062(2)(a) and (f).
  279  An insurer shall notify the office of any change to such rates
  280  within 30 days after the effective date of the change. The
  281  notice must include the name of the insurer and the average
  282  statewide percentage change in rates. Actuarial data with regard
  283  to such rates for flood coverage must be maintained by the
  284  insurer for 2 years after the effective date of such rate change
  285  and is subject to examination by the office. The office may
  286  require the insurer to incur the costs associated with an
  287  examination. Upon examination, the office, in accordance with
  288  generally accepted and reasonable actuarial techniques, shall
  289  consider the rate factors in s. 627.062(2)(b), (c), and (d), and
  290  the standards in s. 627.062(2)(e), to determine if the rate is
  291  excessive, inadequate, or unfairly discriminatory. If the office
  292  determines that a rate is excessive or unfairly discriminatory,
  293  the office shall require the insurer to provide appropriate
  294  credit to affected insureds or an appropriate refund to affected
  295  insureds who no longer receive coverage from the insurer.
  296         (4) A surplus lines agent may export a contract or
  297  endorsement providing flood coverage to an eligible surplus
  298  lines insurer without making a diligent effort to seek such
  299  coverage from three or more authorized insurers under s.
  300  626.916(1)(a). This subsection expires July 1, 2025 2017.
  301         (5) In addition to any other applicable requirements, an
  302  insurer providing flood coverage in this state must:
  303         (a) Notify the office at least 30 days before writing flood
  304  insurance in this state; and
  305         (b) File a plan of operation and financial projections or
  306  revisions to such plan, as applicable, with the office.
  307         (6) Citizens Property Insurance Corporation may not provide
  308  insurance for the peril of flood.
  309         (7) The Florida Hurricane Catastrophe Fund may not provide
  310  reimbursement for losses proximately caused by the peril of
  311  flood, including losses that occur during a covered event as
  312  defined in s. 215.555(2)(b).
  313         (8) An agent must, upon receiving an application for flood
  314  coverage from an authorized or surplus lines insurer for a
  315  property receiving flood insurance under the National Flood
  316  Insurance Program, obtain an acknowledgment signed by the
  317  applicant before placing the coverage with the authorized or
  318  surplus lines insurer. The acknowledgment must notify the
  319  applicant that, if the applicant discontinues coverage under the
  320  National Flood Insurance Program which is provided at a
  321  subsidized rate, the full risk rate for flood insurance may
  322  apply to the property if the applicant later seeks to reinstate
  323  coverage under the program.
  324         (9) With respect to the regulation of flood coverage
  325  written in this state by authorized insurers, this section
  326  supersedes any other provision in the Florida Insurance Code in
  327  the event of a conflict.
  328         (10) If federal law or rule requires a certification by a
  329  state insurance regulatory official as a condition of qualifying
  330  for private flood insurance or disaster assistance, the
  331  Commissioner of Insurance Regulation may provide the
  332  certification, and such certification is not subject to review
  333  under chapter 120.
  334         (11)(a) An authorized insurer offering flood insurance may
  335  request the office to certify that a policy, contract, or
  336  endorsement provides coverage for the peril of flood which
  337  equals or exceeds the flood coverage offered by the National
  338  Flood Insurance Program. To be eligible for certification, such
  339  policy, contract, or endorsement must contain a provision
  340  stating that it meets the private flood insurance requirements
  341  specified in 42 U.S.C. s. 4012a(b) and may not contain any
  342  provision that is not in compliance with 42 U.S.C. s. 4012a(b).
  343         (b) The authorized insurer or its agent may reference or
  344  include a certification under paragraph (a) in advertising or
  345  communications with an agent, a lending institution, an insured,
  346  or a potential insured only for a policy, contract, or
  347  endorsement that is certified under this subsection. The
  348  authorized insurer may include a statement that notifies an
  349  insured of the certification on the declarations page or other
  350  policy documentation related to flood coverage certified under
  351  this subsection.
  352         (c) An insurer or agent who knowingly misrepresents that a
  353  flood policy, contract, or endorsement is certified under this
  354  subsection commits an unfair or deceptive act under s. 626.9541.
  355         Section 7. This act shall take effect July 1, 2016.