Florida's 2018 midterm elections ballot contained a record number of proposed amendments to the state's Constitution - 20 changes bundled into 12 amendments. Eleven of those amendments obtained the required minimum support of at least 60% of active voters, several of them impacting the interests of property owners and land developers.

Amendment 1: Additional Homestead Property Tax Exemption Fails to Pass

Amendment 1 was widely expected to pass but was the sole proposed amendment that did not. It would have created a new exemption for the value between $100,000 and $125,000 of homestead property from all taxes except school district taxes. This would have translated to about $250 in additional annual savings per homestead property per year, though it also would have resulted in an annual statewide reduction of revenue to local governments by more than $700 million. The failure of Amendment 1 maintains the status quo. Therefore, each homestead property is still only entitled to a maximum of $50,000 in tax exemptions (for the value between $0-$25,000 and between $50,000-$75,000).

Amendment 2: Keeps Cap on Non-Homestead Property Tax Assessment Increases

As we described in a previous alert, Amendment 2 simply removed a 2019 sunset provision for a constitutional cap on the amount by which non-homestead real property tax assessments could increase from year to year, thus making the cap permanent. Non-homestead property includes both residential property (second homes and rental apartments) and non-residential property (commercial property and vacant land). In an effort to protect renters and brick-and-mortar retailers from prohibitive rent increases, the Amendment's cap prohibits non-homestead real property tax assessments from increasing by more than 10% from one year to the next, unless the property is sold or upon other events such as change of control or certain improvements to the property. The 10% limitation does not include school district taxes, which remain uncapped.

Amendment 6: Removes Deference to State Agency Interpretations of Statutes and Rules

As a result of Amendment 6's passage, Florida's state court judges are now prohibited from giving any deference to the interpretations made by state administrative agencies of state statutes or rules. State courts will no longer grant deference to reasonable agency interpretations, and will instead independently review state statutes and rules as if the agency had not issued an interpretation. Entities who disagree with agency rulings may now petition courts with the benefit of a blank slate - with a catch. The lack of deference also reduces the certainty and finality that businesses and other petitioners would otherwise have enjoyed when relying on expert agency interpretations. This Amendment generated little discussion before voters went to the polls but could lead to significant changes in the existing law in environmental and land use permitting.

Amendment 9: Continues Ban Oil and Gas Drilling in Florida-Owned Waters

Shortly before leaving office, President Obama issued a moratorium that, in part, prohibited oil and gas drilling beneath Florida-owned waters within the state's outermost territorial boundaries, which are three miles from the shore on the Atlantic side and nine miles from the shore on the Gulf side. The prohibition was set to expire in 2022. The passage of Amendment 9, occurring in the face of the Trump Administration's federal push for expanded oil and gas drilling operations, repealed this sunset provision and effectively extended the drilling prohibition indefinitely. There is no corresponding Florida Constitutional prohibition on drilling for oil on privately-owned or federally-owned waters.

Amendment 12: Prohibits "Public Officers" from Obtaining a "Disproportionate Benefit"

Amendment 12 adds a prohibition on "public officers" from abusing their public position in order to obtain a "disproportionate benefit" for themselves or for their immediate family, their employer, or for businesses they have contracted with. It defines a "public officer" as a statewide elected officer, a member of the legislature, a county commissioner, a county officer pursuant to Article VIII or county charter, a school board member, a superintendent of schools, an elected municipal officer, an elected special district officer in a special district with ad valorem taxing authority, or a person serving as a secretary, an executive director, or other agency head of a department of the executive branch of state government. Developers who use Community Development Districts (CDDs) should review Amendment 12 because this definition encompasses members of a CDD's Board of Supervisors. One important question is whether a developer's routine compensation to those of its employees who serve as CDD Board members would constitute a "disproportionate benefit." The Florida Commission on Ethics must define what a "disproportionate benefit" is before October 1, 2019. This provision goes into effect on December 31, 2020.

Our Land Development, Zoning & Environmental team and Government Affairs team will continue to monitor developments as these Constitutional Amendments are implemented. Please contact us with any questions.