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Department of Business and Professional Regulations

We are pleased to welcome our new Administrative Assistant, Sheryl Hatfield to the firm. She is a great addition to the firm. We are also pleased to announce that Tonja Pellegrino has been promoted to Office Manager. This will allow Connie to concentrate on marketing.

Workers’ Compensation Attorney’s Fees – HB 903

This bill reverses the recent Florida Supreme Court decision in Murray v. Mariner Health and ACE USA. That case lifted the limits on attorneys’ fees for claimants. The limits on fees, along with other changes to the Worker’s Compensation Act, had resulted in a 60% drop in insurance rates. Upon release of this decision rates were raised by 17%.

The court seized on the phrase “as reasonable” relating to fees in one section of the statute as a basis for eliminating the limits on fees. This was despite the fact that the statute had very specific limits on the amount of attorneys’ fees that could be paid.

It is likely that this issue will return to the Supreme Court at some point on an argument that fees in excess of the statutory amounts are necessary to secure access to the courts by a claimant. The effect of this bill was immediate with the announcement of a 6% rate reduction effective July 1, 2009.

Effective Date – July 1, 2009.

Public Construction Projects – HB 611

Under current law any project on public property in excess of $200,000 for general construction and $50,000 for electrical work must be bonded. This bill raises that limit to $300,000 for general construction work and $75,000 for electrical work. These threshold amounts are now subject to adjustment by the percentage change in the Engineering News Record building cost index from January 1, 2009 to January 1 of the year in which the project is scheduled to begin.

This bill also addresses concerns that public entities (other than school districts and public utilities) are doing construction work through employees which is more appropriately done by private contractors. Public entities, with some exceptions, are limited to repair and maintenance. The bill adopts definitions for “repair” and “maintenance.” They do not include the construction of any new building, structure or other public construction work, or any substantial addition, extension or upgrade to an existing public facility. Any substantial work must be bid to private contractors. Additions, extensions and upgrades are considered substantial if the estimated cost exceeds $300,000 and exceeds 20% of the estimated total cost of the repair or maintenance project.

In determining the costs of such work the public entity is required to use generally accepted accounting principles that fully account for all costs including employee compensation, benefits, equipment cost and maintenance, insurance and materials.

These limitations may be waived only after a public hearing with notice at least 21 days before the hearing. The notice must identify the project with the components and scope of the work and the estimated cost of the project. An itemization of each component of the estimated cost of the project and documentation explaining the methodology used to arrive at the estimated cost must be made available. At the public meeting, any qualified contractor who could have been awarded the project had it been competitively bid, must be allowed to present evidence regarding the project and the accuracy of the local entity’s estimated cost of the project. A qualified contractor, who could have bid on project if it had been competitively bid, may challenge in court whether the local government has complied with these requirements. The prevailing party will be entitled to recover attorneys’ fees. Airports, ports, and public transit systems are exempt from these requirements.

The bill also provides that a government entity may consider a contractor ineligible to bid if the contractor has been found guilty within the previous five years of any violation of laws regarding safety, tax withholding, worker’s compensation, unemployment law, social security and Medicare tax, or wage or hour violations.

Effective Date – October 1, 2009.

Public Procurement of Services – SB 2666

This bill addresses certain construction procurement issues. It creates Section 255.32 to define construction management. It allows use of the construction management delivery system for construction projects including a grouping of minor projects and a grouping of substantially similar construction projects.

This change is designed to deal with an Attorney General’s opinion that a city could not use the construction management system for phased projects where delivery and pricing was negotiated for one phase, but not for the others.

It switches school boards from selection of construction managers under Section 1013.45 to selection under Section 255.103. There is no substantive difference other than to make the laws relating to construction management systems uniform for all governmental entities. In all cases, the Competitive Consultants Negotiations Act will still be the basis for selection.

The State Department of Management Services did not have the ability to enter into continuing contract for construction projects. This right is extended to DMS by allowing all government entities to enter into these types of contracts. Selection will be through the Competitive Consultant’s Negotiations Act but the estimated cost may not exceed $2 million. It is not necessary that the type of work being performed be identified at the time of entering into the contract. It also clarifies language for use of a continuing contract for professional services raising the limit for each individual project under the contract from $1 million to $2 million provided that the fee for services for each individual project does not exceed $200,000. This is an increase from $50,000.

Effective Date – July 1, 2009.

Construction Defects – SB 2064

Chapter 558 provides for notice to contractors and design professionals of construction defects prior to commencing legal action.

The major change is to Section 558.005. At present, a notice of the right to notice of defects has to be included in the contract to be enforceable. This bill will require that a claimant and the contractor agree in writing to opt out of the requirements of this section. This applies to any claim for legal relief for which the agreement for making improvements was made after October 1, 2009.

Some definitions are added or amended. “Completion of a building or improvement” is defined to be the issuance of a certificate of occupancy for the entire building or improvement or the equivalent authorization to occupy or use the improvement, issued by the governmental body having jurisdiction and, in jurisdictions where no certificate of occupancy or equivalent authorization is issued, it means substantial completion of construction, finishing and equipping of the building according to the plans and specifications.

“Service” is redefined to add a requirement that notice by certified mail have some evidence of delivery or attempted delivery and authorizes hand-delivery or delivery by any courier with written evidence of delivery.

“Restoration” has been added to the section regarding destructive testing. That notice has to provide the estimated anticipated damage and repairs to “or restoration of” the property resulting from the testing.

It is also clarified that Chapter 558 is not intended for use until the project is substantially completed.

In setting the time frames for actions “receipt” of notice has been deleted and the term “service” has been inserted.

It provides that no construction lien rights arise for destructive testing or restoring of the area destructively tested except to the extent that the owner contracts for the destructive testing or restoration.

The current statute provides that: “In the event that the claimant fails or refuses to agree to destructive testing, the claimant shall have no claim for damages which could have been avoided or mitigated had destructive testing been allowed when requested and a feasible remedy be promptly implemented.” This section is clarified so that the claimant must not only agree but must actually allow destructive testing to take place.

The notices required under Chapter 558 may not be considered as an admission of any kind.

The response to notices of claim, including those of subcontractors, suppliers, and design professionals may be served by the contractor. Presently, it appears to require that each contractor, subcontractor or design professional would have to separately serve any response on the claimant.

It is presently provided that the claimant and any person served with notice have a right to all available “discoverable evidence.” This has now been clarified. Specific categories of information have been identified including any design plans, specifications, and as-built plans, submittals, photographs, videos, expert reports, subcontracts and purchase orders for the work that is claimed defective. Anyone requesting information must include an offer to pay the reasonable cost of reproduction.

Pre-suit mediation is specifically authorized under this Act, but is not required. The applicability of this statute has been clarified. It applies to all actions accruing between July 1, 2004 and September 30, 2006 regardless of whether a notice is provided. Between October 1, 2006 and September 30, 2009 the appropriate notice must be in the contract for this statute to apply. But contracts entered into after October 1, 2009 should contain the following: “Any claims or construction defects are subject to the notice and cure provisions of Chapter 558, Florida Statutes.” However, it specifically states that the failure to include this does not result in any penalty to any of the parties.

Effective Date – October 1, 2009.

Growth Management – Community Renewal Act – SB 360

This bill makes substantial modifications to existing growth management legislation. No attempt is made to address all of the changes. The most significant one is the establishment of “dense urban land areas”. This is defined as either a municipality or county that has an average of at least 1,000 people per square mile and a minimum population of 5,000. This translates into approximately one person per acre. It then drops the requirement for transportation concurrency in these areas. Concurrency means that the roads have been or will be sufficiently improved to handle the increased use caused by a development. There will be a process in which all of these areas will be identified.

This bill also extends any permit issued by the Department of Environmental Protection or a water management district that has an expiration date between September 1, 2008 and January 1, 2012 for a period of two years following its present date of expiration.

Transparency in Government – SB 1796

This bill requires that information relating to any appropriation in the General Appropriation Act for each branch of state government and state agency be posted on a website to be established. It also sets up a committee to provide for putting all of the other financial information of the state on line. This bill takes effect upon becoming law.