Governor Nixes FHCF Premium Tax Program
Governor Rick Scott has vetoed HB 5505, which would have created a program by which insurers could prepay premium taxes in exchange for future credits, with the proceeds being used to create liquidity for the Florida Hurricane Catastrophe Fund (FHCF). The Governor stated in his veto message that he would not approve the bill because the proposal was not fully vetted in the committee process during the 2012 session but instead emerged late in the budget conference process.
The proposal would have allowed the State Board of Administration (SBA), which administers the FHCF, to sell up to $1.5 billion in prepaid tax certificates. The maximum amount applicable to any one tax year would have been $150 million. The SBA then would have loaned the proceeds from the sale of these certificates to the Florida Hurricane Catastrophe Fund Finance Corporation, creating liquidity for the FHCF.
When the bill passed the legislature, Jack Nicholson of the FHCF raised questions and potential concerns about it. Dr. Nicholson was uncertain about how the program would be administered and whether it would be an effective means of enhancing the FHCF’s liquidity.