November 22, 2014

Now It's Personal

John D. McKinnon | 7/1/1995
The inside crowd expected the big theme of the 1995 legislative session to be more punishment for prisoners. But as it turned out, the politicians were really more interested in punishing each other.

Democrats sought revenge for the Republican takeover of the Senate. Republicans sought to get even for Governor Chiles' defeat of Jeb Bush in the 1994 election. And Chiles was paying back everyone for ignoring his health-care plans.

In the midst of the cross fire, conservative lawmakers countered the governor's 1994 sneak attack on Big Tobacco - a stealth amendment that gave the state sweeping powers to sue cigarette makers - by pushing through a bill to repeal the Chiles amendment and kill the suit. They also slipped in a sucker punch of their own. An obscure bill making technical amendments to various statutes contained a little-noticed repeal of another favorite Chiles initiative: the 1992 law that required contractors doing significant business with the state to buy health-care coverage for their workers.

Yes, revenge is sweet. Unfortunately, it's also expensive. And in the end, ordinary people - including business people - paid a big price for all the pique of the 1995 session.

Just ask the Florida Chamber of Commerce. Its leaders were pushing a thoughtful plan to transfer the state's inept industry-hunting efforts into an innovative public-private partnership called Enterprise Florida. With backing from Chiles, the Chamber's idea won bipartisan approval in the House. The Senate essentially ignored it.

Or ask Associated Industries of Florida. Its leaders were pushing a widely supported change in a state law that taxes electricity used for manufacturing. At Chiles' urging, however, their plan got pulled into the doomed Enterprise Florida bill. AIF's Jon Shebel was not amused. "He [Chiles] just did this 'cause he got mad,' " Shebel growled after his tax-cut package sank.

Or consider seaport boosters. They wanted a modest but significant development package in order to maintain competitiveness with other Southeastern ports. They'll have to wait, too. The same goes for backers of defense conversion incentives.

And, for the third straight year, the Legislature rejected Chiles' ideas for broadening access to health care. Chiles' "Health Security" plan for making insurance more available was never even heard in the Senate and never got out of subcommittee in the House. Indeed, Chiles had to suffer the humiliation of seeing the Legislature raid health and human services funds to finance a modest 3% increase in education, which became necessary after the Legislature squandered virtually all of the state's growth dividend on new prisons.

Meanwhile, so thorough was the gridlock that no one else's health-care reform ideas came close to passing either. Doctors, who feel increasingly marginalized by insurance companies and government bureaucrats, wanted to reassert their influence through creation of a state Department of Health Care Services, to be headed by a physician. They also wanted measures to give them more power in dealing with insurance companies, and especially health maintenance organizations. In addition, some lawmakers and health maintenance organization (HMO) lobbyists wanted to crack down on Medicaid HMOs, which operate under somewhat looser rules than so-called commercial HMOs. And some health-care businesses were hot on the idea of deregulating the government's health-care facility certificate-of-need process. But in the end, only a minor measure to help foreign-trained physicians sneaked through.

Still, there were significant accomplishments in 1995. Here's a look back:

Property Insurance. The most important business issue of the season concerned the state's post-Andrew insurance crisis. In the end, many industry people came away impressed with the efforts of the Legislature as well as with Insurance Commissioner Bill Nelson. The package that passed makes it easier for insurance companies to live with the state's costly Hurricane Catastrophe Fund. It also makes state acceptance of companies' computerized loss projections more likely, increasing the chances that companies will be able to recover reasonable rates from consumers. And it gives companies assurances that they'll be able to pass on severe hurricane losses to their rate-payers. "I think it was one of the best pieces of legislation that's passed in insurance in a very long time," said Rade T. Musulin of Florida Farm Bureau Insurance Co.

Tort Reform. Business lobbyists again prevailed over trial lawyers by blocking a bill that would have made it easier for injured plaintiffs to recover from deep-pocket defendants in multi-party cases. AIF also scored against trial lawyers by pushing through a repeal of Chiles' 1994 third-party liability law, which had opened the door for the state's suit against the tobacco industry. Look for Chiles to try buying support for a new health-care deal in the fall by promising not to veto the repeal.

Telecommunications. Two weeks into the 1995 session, Florida's cable TV companies surprised industry watchers by switching sides in the deregulation debate. Cable interests wound up joining their longtime rival, the local telephone companies. That combination all but assured victory for the two political powerhouses. The third big team in the contest, cable's one-time ally, long-distance carrier AT&T, was left to play a desperate game of defense for the remainder of the session - unsuccessfully, as it turned out. Not surprisingly, the bill that passed gives competitive breaks to cable companies, while effectively preserving the high local access charges that long-distance companies now must pay. Outlook for customers: Supporters say the bill will bring lower prices while protecting consumers in rural areas. Opponents say the bill offers watered-down competition that will only serve to preserve the local phone companies' top-dog position.

Property Rights. The biggest success of the year for developers - and their lawyers - came in the property rights bill that Chiles signed into law. The bill requires compensation whenever a new state, regional or local government action "inordinately burdens" private property. The bill also creates a widely praised informal environmental and land-use dispute resolution process.

Environmental Regulation. Environmentalists also suffered a setback with the passage of a bill that reduces the power of the state Environmental Regulation Commission (ERC). The commission is headed by Orlando businessman Dick Batchelor, a former lawmaker who's perceived by some development interests as too zealous. The ERC previously adopted the state's environmental rules, but more of that authority would be moved under the bill to the secretary of the Department of Environmental Protection. Retailers quietly celebrated the demise of the much-disliked Advance Disposal Fee, an environmental charge on many containers that was allowed to lapse. And coastal interests won a minor victory with legislation that allows for relocation of turtle nests in order to facilitate beach renourishment after big storms.

Taxes. Lawmakers again showed they were serious about holding the line on taxes, adopting no significant statewide increases. But the Legislature failed to adopt a measure that could have limited future taxes. The measure, in the form of a constitutional amendment, would have required a two-thirds vote of each chamber to adopt new taxes. Look for tax-cap boosters to attempt to put even more stringent measures on the 1996 ballot through the initiative process.

Business Regulation. Business interests managed to score a small victory involving the Department of Labor's Division of Safety. The division suffered the twin indignities of a 12% reduction in staff and a specific instruction from the Legislature not to duplicate the enforcement actions of federal OSHA inspectors.

Regulatory Process Reform. In the big government rules debate, business lobbyists claimed another victory, but the reality was somewhat different. The bill that passed gave the governor a small part of what he wanted - a trial waiver of existing rules at the Department of Transportation. But administration critics said other parts of the bill encouraged litigation and even encouraged more rule making. They also said the bill infringed on the governor's executive-branch powers by giving the Legislature more of a say-so over rules.

In other significant regulatory matters, the Legislature:

* Increased penalties for making counterfeit goods.

* Adopted a new form of partnerships, called registered limited-liability partnerships, principally to benefit some big law firms.

* Rejected card rooms for pari-mutuel facilities.


Tallahassee Talk

A Tallahassee appeals court has upheld a legal challenge against the Florida Board of Regents. The court held that the "negative check-off" system used at several campuses to channel student fees to the Florida Public Interest Research Group (FPIRG) amounted to an unbridled grant of discretion to university presidents. The appeals continue in the case, which was filed by conservative activists. It's worth noting that FPIRG is defended by Carlos Alvarez, a lawyer with Hopping, Green, Sams and Smith, a highly regarded Tallahassee land-use firm that typically represents developers. In the past, FPIRG officials have predicted disastrous consequences for their group from loss of the negative check-off.

Tags: Florida Small Business, Politics & Law, Business Florida

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