SB 620 proposes the unprecedented action of requiring local governments to pay compensation for business damages caused by local ordinances or charter provisions.
A business that has been engaged in a lawful business in Florida for at least 3 years may claim business damages from a local government if the government enacts or amends an ordinance or charter provision that will cause a reduction of at least 15 percent of the business’ revenue or profit. The bill is intended to protect existing businesses from revenues or profits losses due to enacted local ordinances and charter provisions or amendments.
A local government is not liable for business damages caused by:
- ordinances required to comply with state or federal law;
- emergency ordinances, declarations, or orders adopted pursuant to the state Emergency Management Act;
- a temporary emergency ordinance which remains in effect for no more than 90 days; or
- ordinances that “increase economic freedom”, which is not defined in the bill.
The bill specifies procedures and methodologies for a business to recover business damages, attorney fees, and costs against a local government. The bill’s provisions are nearly identical to the business damage procedures set forth in Florida’s eminent domain statute (§73., and includes a pre-suit claims process that provides:
- At least 180 days before filing an action for business damages and within 180 days of the ordinance or charter provision’s effective date, the business must present a written offer of settlement to the local government. The business must provide copies of the business’ records that substantiate the claim.
- The local government must accept, reject, or make a counteroffer within 120 days of receiving the offer.
- If the claim is settled before a lawsuit is filed, the business is entitled to recover costs and attorney fees expended at point. If the claim is not settled before the suit is filed, is settled after suit is filed, or a final judgment is rendered, attorney fees and costs are based upon the difference between the final judgment or settlement and the local government’s counteroffer to the business’ initial offer. If the local government failed to respond to the business' claim or make a counter offer, the local government's counteroffer is zero for purposes of assessing attorney fees.
- If the business and local government do not agree on an award of fees and costs incurred during the pre-suit period, the business may file an action to recover fees and costs.
If the pre-suit claim is not resolved, a business may file a complaint for business damages within 1 year after the effective date of the ordinance or charter provision. If a business recovers business damages, the bill further specifies the local government must pay the business’ reasonable costs, including accountant and other expert fees.
The bill specifies the methodology for assessing attorney fees against the local government. Specifically, it provides for attorney fees of 33% of any benefit up to $250,000, plus 25% of any portion of the benefit between $250,000 and $1 million; plus 20% of any portion of the benefit exceeding $1 million.
