Senate passes bill ordering local governments to pay up if new rules hurt businesses

The Florida Senate has an answer for local governments that want to regulate businesses: Go ahead, but it’s going to cost you.

A bill that will allow businesses to sue for damages if a local ordinance or voter-approved referendum costs their business 15% or more of their profits passed on a 22-14 mostly party-line vote Thursday.

If it had been in effect in 2020, Key West residents who voted to ban cruise ships with more than 1,300 passengers from docking at the city ports would have been subject to paying the cruise lines for lost business during the months the ban was in force.

If it had been law last year, Miami-Dade County, which imposed a fertilizer ban on lawns and plants during the rainy season to prevent algae blooms and fish kills, could have been forced to pay businesses that saw big drops in fertilizer sales.

And if the bill becomes law this year, Miami Beach residents, who voted in a non-binding referendum last year to impose earlier last-call hours for alcohol sales at local bars, could be held liable for damages if the new law leads to lost business.

Those are just some of dozens of local government ordinances targeted by Senate President Wilton Simpson, R-Trilby, who had the idea of requiring businesses to be reimbursed for lost revenues if a local government passes an ordinance that costs them money.

All Senate Democrats voted against it, saying it was another assault on home rule and the state’s large metro areas, where politics is more progressive than the GOP-dominated Legislature.

“This bill will cause financial harm by allowing businesses to sue the cities and counties for simply doing their jobs,’’ said Sen. Victor Torres, D-Orlando, an opponent.

The Senate approved the measure, SB 620, with only one Republican, Sen. Jeff Brandes, R-St. Petersburg, not in support. It now goes to the House, where a companion bill has not gotten a hearing.

Changes made to original bill

The original version of the bill was fiercely opposed by local government officials who warned it would lead to an avalanche of lawsuits when cities and counties pass noise ordinances, zoning rules or public safety measures aimed at regulating businesses the community considers dangerous or a nuisance.

Florida TaxWatch, the business-backed research organization, warned in a new report issued Wednesday that the legislation will “lead to a number of financially motivated and malicious lawsuits, costing local governments over $900 million annually.’’

Faced with widespread opposition, sponsor Sen. Travis Hutson of Palm Coast on Thursday proposed an amendment that substantially weakened the original bill. The Florida League of Cities, which had been opposed, announced it was neutral.

The Senate approved the amendment, and the bill now requires that a business be operating in a city or county for three years before it is eligible to sue. But if those who do sue succeed, the businesses may recover as much as seven years of lost profits.

Once a claim against a local government is filed, the bill allows the city or county to avoid paying damages by doing one of three things:

▪ Repeal the offending ordinance.

▪ Amend the ordinance in a way that removes the offending provision.

▪ Grant the business a hardship waiver, which would be determined by the local government.

“It’s enough to turn this from a mortal wound to a gut punch,’’ said Rebecca O’Hara, lobbyist for the Florida League of Cities. “That’s not to say this is not a big deal, and there are a lot of unknowns how it’s going to play out in the real world. But we’ve put safeguards in it to give local governments enough options.”

O’Hara said local governments could crack down on pill mills and strip clubs that have been in operation less than three years but may not allow them to go after established businesses that start hosting unwanted activity — such as a convenience store operating as an “internet cafe” to conduct gray market gambling.

There’s a clause to avoid nuisance lawsuits

To remove the incentive for phishing lawsuits to be filed, putting taxpayers on the hook for frivolous legal action, the bill requires that the prevailing party pay attorneys fees.

And to make sure that local governments are not held liable for when they are enforcing state statutes, the bill prohibits lawsuits if the Legislature has expressly authorized them to implement mandates, local option taxes and other protections.

Simpson said Thursday he hopes the bill would have stopped “every pre-emption bill” that has been proposed in the last nine years.

That list includes bills written by the natural gas and utility industry and passed last year that prevent local governments from regulating the production and distribution of electricity, natural gas and petroleum products. It includes attempts to prevent local governments from regulating vacation rentals and party houses, banning sunscreen and imposing rules on where utility companies can set up solar farms.

Sen. Gary Farmer, D-Lighthouse Point, warned that if this bill were attempting to end preemption bills it would say that and it doesn’t. He tried and failed to persuade the Senate to carve out an exemption for affordable housing and tenant protection measures.

“Our local governments are struggling to deal with a lot of issues, perhaps the most significant of which is the affordable housing crisis we find ourselves in today,’’ he said.

Farmer noted that in Tallahassee a local mobile home park is seeing its rates increase 230%, and the county is considering providing some aid, such as imposing a rent control ordinance.

If the bill passes, it would make the government liable because if it doesn’t allow the rate increase it will result in monetary damages, he said.

Pizzo: This goes too far

Sen. Jason Pizzo, D-Miami, said the measure goes too far by quashing the will of a local community, especially those that work together to pass a local referendum in a popular vote to address “a nuisance or life-safety issue.”

“Even in a situation where a super majority of residents in my city vote for something, you’re forcing them to pay liquidated damages to a business,’’ he said.

Hutson confirmed Florida would be the first state to enact such a provision.

The Senate also passed a companion measure, SB 280, that will require local governments to do an economic impact statement for ordinances before they adopt them and give any resulting legal challenge a fast-track priority in court. It passed with more Democrat support on a 28-8 vote.

Miami Herald staff writers Joey Flechas, Martin Vassolo and Douglas Hanks contributed to this report.

Mary Ellen Klas: meklas@miamiherald.com and @MaryEllenKlas