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 Property Tax Assessment: Valuation Methods Combined for Leased Property

By Timothy D. Bates

 Timothy D. Bates is a partner in the New London, Connecticut, office of Robinson & Cole LLP and special counsel to the Town of Killingly, Connecticut.

Assessors normally appraise real property according to comparable sales, capitalization of income, or replacement value. In certain unique situations involving leased land, however, tax assessors can use two of these methods and then add the results together to come up with the total value of the property.

That is the message of the Connecticut Supreme Court in Sheridan v. Town of Killingly, 897 A.2d 90 (2006), which held that the trial court committed error by not allowing the income valuation of rental property to be increased by the sales value of the leasehold interest.

Killingly, a rural town in northeastern Connecticut, re-assessed the property in 2002. John R. Sheridan owned 202 acres surrounding Alexanders Lake. The property consisted principally of 274 leased tracts of land with lake access. The leases ran for ten years each, but were invariably renewed. Many tenants had erected substantial lakeside homes on these tracts; just before trial, one such building sold for $425,000, a remarkable sum given that it sat on leased land and would have to be removed if the lease were terminated.

Sheridan set generally uniform rents for the tracts, which are approximately 1/10th an acre in size, to provide himself with income of $500,000 a year. Rents for each tract at the time of the tax appeal equaled $2,275 a year.

Melissa Bonin, the Killingly assessor, maintained a comprehensive record of property sales leading up to the re-assessment year, and for each sale, she calculated the sales value of the underlying land and the cost value of the improvements on that land. She noted that while land values differed between different parts of town, the cost valuations of the structures remained remarkably predictable based on age and condition. She perceived, however, that the sales prices for improvements on Alexanders Lake leased tracts invariably exceeded their cost valuation. Further, Bonin observed that when leases for tracts on Alexanders Lake sold, even without any improvements, the tenant who sold the lease received substantial consideration.

The assessor concluded that Sheridan’s tenants owned valuable leasehold interests because of the low rent and the certainty of renewal. Accordingly, when the town re-assessed, she hired Steven R. Flanagan, MAI, specifically to determine the value of the Sheridan property.

Flanagan began by calculating the income valuation of the Sheridan holdings. He estimated the gross rents from the tracts, deducted annual expenses, and capitalized the net income, resulting in a value of $15,000 per tract, or approximately $4 million. However, he also examined the sales of five leases, involving tracts that either had no improvements on them or that had improvements that were immediately demolished upon purchase of the lease. Flanagan found that those leases sold on an average of $35,000, which he determined to be the value of the leasehold interests of each of the tracts.

Flanagan testified at trial that if the Sheridan leases were at market value, there should be no value for the leasehold. However, he reasoned, as the rent was substantially below market, the tenant had something to sell, and the sales price of the leases indicated the value of the leasehold.

Flanagan concluded that the true value of each tract should be determined by adding the $15,000 income valuation to the $35,000 sales valuation of the leasehold, resulting in a value per lot of $50,000, or a total assessed value of approximately $14 million.

Sheridan ’s appraiser, Robert R. Morra, valued the property based exclusively on the income approach. Using relatively the same income as Flanagan, but accounting for several additional deductions and employing a slightly different discount rate, Morra determined that the value of the tracts was $2.4 million. He argued it was not appropriate to value the leasehold interests because he questioned whether they existed and stated that even if they did exist, they belonged to the tenants, not the property owner.1

The trial judge, Arnold Aronson, agreed with Morra, stating in his opinion after trial:

This court finds it difficult to accept Flanagan’s reasoning. First, “[t]he leasehold estate is the lessee’s or tenant’s estate. When a lease is created, the tenant usually acquires the rights to possess the property for the leased period, [and] to sublease the property (if this is allowed by the lease and desired by the tenant) . . . . In return, the tenant is obligated to pay rent, surrender possession of the property at the termination of the lease, remove any improvements the lessee has modified or constructed (if specified), and abide by the lease provisions . . . .” Appraisal Institute, The Appraisal of Real Estate (12th Ed. 2001), p. 83. As one can see, the value of the tenant’s leasehold interest cannot be tacked on to the lessor’s interest, because that would require the plaintiff to pay a real estate tax on property that cannot be attributed to him, as the owner.

Sheridan v. Town of Killingly , No. CV030070359S, 2004 WL 2757569, at *4 ( Conn. Super. Ct. Nov. 5, 2004). Accordingly, Judge Aronson ruled that the assessor could not combine “the value of the tenant’s interests with that of the lessor’s interest in the tracts on the subject property.”

The town appealed, and the Supreme Court of Connecticut reversed. The supreme court reasoned that the leasehold interest reflected the true value of the property, stating, “In taking that excess value into account, the town does not thereby tax the property owner for a property interest that belongs to the lessee. Rather, the town uses the excess value as an indicator of the true and actual value of the owner’s interest.” 897 A.2d at 96–97.

Moreover, the supreme court noted that if the town could not assess the owner for the value of the leasehold interest, that value would go untaxed, as the tenant had no taxable real property reflecting that interest.

Sheridan had argued on appeal that to allow the town to add the income valuation to the sales valuation in effect taxed Sheridan’s interest twice, but the supreme court demurred, stating “‘valuation of some properties may appropriately involve more than one single theory of valuation.’” 897 A.2d at 98. Affirming the two-step valuation, the court ruled, “The leasehold interest would have no monetary value above the value of the improvements if the capitalized value of the actual rents were equivalent to the fair market value of the leasehold tracts. The town merely used the value of the tenants’ leasehold interest as an indicator of that fair market value.” Id.

In so ruling, the Connecticut Supreme Court joined a majority of state courts that do not give deference to valuations based on below-market rents. In Valencia Ctr., Inc. v. Bystrom, 543 So. 2d 214 (Fla. 1989), the Florida Supreme Court ruled that the total value of a shopping center could not be determined by simply capitalizing the net income of a below-market lease. The Georgia Appellate Court in Martin v. Liberty County Bd. of Tax Assessors, 262 S.E.2d 609 (Ga. Ct. App. 1979), refused to discount the assessed value of the property based on the negative effect of a below-market lease. The Iowa Court of Appeals issued a similar ruling in a case of a post office with a below-market rent in Oberstein v. Adair County Bd. of Review, 318 N.W. 2d 817 (Iowa Ct. App. 1982).

In Nebraska, the owner of an eighteen-hole golf course appealed an order of a county tax assessment review board that affirmed the decision of the assessing entity and denied the owner’s request for a reduction of the assessment. On appeal, the property owner argued that its assessment should be lower, because the property was encumbered with a long-term lease, with rents that were below market value. After surveying the approaches used in other states, that court concluded:

[T]he actual or fair market value of the real property can only be ascertained by first determining the fee simple value, including the value of the leasehold estate, the leased fee estate, and any other severed estate. Therefore, based upon our examination of Nebraska law and jurisprudence from other states, we hold that the actual value of real property tax for tax purposes shall be the value which a willing buyer would be willing to pay for the fee simple interest.

Omaha Country Club v. Douglas County Board of Equalization, 645 N.W.2d 821, 831 (Neb. Ct. App. 2002). 2

A minority of state courts have held that valuation of rental property would necessarily be limited to the capitalization of existing net rental income, even if the leases were below market. See, e.g.,Supervisor of Assessments of Allegany County v. The Ort Children Trust Four, 448 A.2d 947 ( Md. 1982); C.A.F. Investment Co. v. Saginaw Township, 302 N.W.2d 164 ( Mich. 1981).

The Washington Supreme Court has taken a middle approach holding:

[I]n valuing property subject to a long-term lease, contract rent should be presumed the proper base figure for valuation in the absence of clear, convincing evidence that market rent exceeds contract rent. . . . If market rent exceeds contract rent, the appropriate method of valuation is to add the present value of the leasehold bonus to the capitalized value of the contract rent.

Folsom v. County of Spokane, 725 P.2d 987, 992 ( Wash. 1986).

The combined valuation approach adopted by the Connecticut Supreme Court finds support in condemnation law. When condemning rental property, it is customary to condemn both the landlord’s interest, based on the capitalized net rent, and the tenant’s leasehold interest, based on the difference between the actual rent and the market rent. See Canterbury Realty Co. v. Ives, 216 A.2d 426 ( Conn. 1966). As Judge Aronson noted, this allocation of interests accords with the standards articulated by the Appraisal Institute in The Appraisal of Real Estate (12th ed. 2001). In the context of tax assessments, however, the allocation of the leasehold interest to the tenant does not make sense. As the Supreme Court of Connecticut noted, the assessment of real property attempts to value the entire fee interest, and the fee interest includes the income received by the landlord during the lease and the value of the reversionary interest in the property at the conclusion of the lease, or the leasehold interest.

The Sheridan case has been remanded to the trial court for determination of the assessment based on adding the value of the leasehold interest—if the court finds it exists and can value it—to the income valuation of the property. Although the ultimate assessment of the Sheridan property remains uncertain, it is clear, based on the supreme court decision, that valuation of land subject to below-market rent cannot be limited to capitalization of the existing rentals, that if there is a leasehold interest, it must be valued and included in the assessment, and that it is proper to value the same property in part based on income valuation and in part based on sales valuation.

Endnotes

1. Both Flanagan and Morra agreed that these tracts were unique properties and that there were no comparable rents to determine whether Sheridan’s rentals reflected the market. If comparative rentals had been available, Flanagan, presumably, would have valued Sheridan’s property based on market rate rents, rather than actual rents, then would have deducted expenses, and capitalized the net market rent. See Denver v. Bd. of Assessment Appeals , 848 P.2d 355 ( Colo. 1993).

2. Based on these cases, property owners with above-market rents could argue that their assessment should be reduced by the negative value of leasehold interests. No reported cases could be located for such a holding.

Fit and Smoke-Free: New Conditions of Employment

By Katharine J. Jackson

Katharine J. Jackson is an associate with Morrison, Frost, Olsen & Irvine, LLP, in Manhattan, Kansas, and also serves as assistant city attorney for Manhattan.

 In late 2005, the World Health Organization (WHO), the health branch of the United Nations, announced that it would no longer recruit or hire individuals who smoke, including those who limit smoking to the off-work hours. Citing the fact that tobacco is the “major preventable cause of death in the world,” the WHO policy on the nonrecruitment of smokers and other tobacco users states the need for its staff members to lead by example in the “global campaign to curb the tobacco epidemic.” WHO’s policy also states that the organization will continue to recruit individuals with other unhealthy lifestyles, although WHO actively encourages its employees to maintain good health.

WHO’s stance against smoking is not a new concept among employers, because it is well-established that cigarette smoking is extremely hazardous to the smoker’s health and, consequently, extremely costly for employers (increased health care costs, more absences from work because of illness, less overall productivity). Indeed, cigarette smoking has a staggering impact on the human body, with attendant health consequences ranging from cancer to heart disease to reduced cardiovascular fitness.

More state and local government employers are making hiring decisions and imposing conditions of employment impacting employees’ off-work conduct to encourage a healthier workforce and to reduce costs. The hiring practices extend beyond smoking restrictions to the exclusion of overweight and obese individuals from the workplace. Obesity is similar to tobacco use in that it has wide-ranging negative health consequences, increasing the incidence of cancer, heart disease, and diabetes. Furthermore, according to the U.S. Center for Disease Control, obesity affects a greater percentage of the U.S. population—although 25 percent of Americans are smokers, more than 65 percent of Americans are considered overweight/obese, which constitutes “epidemic” status. The impact of these arguably preventable and treatable diseases on employers is astounding—the American Medical Association reports that more than $150 billion is spent on health problems caused by tobacco use and obesity combined.

Most employees who are smokers or overweight/obese are not protected by the Civil Rights Act of 1964 or the Americans with Disabilities Act, leaving the decision as to which hiring decisions and conditions of employment are acceptable to the courts. In evaluating a challenge to an employer practice or policy, the courts must examine not only whether some form of unlawful discrimination has occurred, but they must also determine the proper extent, if any, that an employer may regulate its employees’ lawful off-duty activities, such as cigarette smoking. Not surprisingly, the law varies widely among jurisdictions.

In support of smoking bans and related health policies, employers argue that certain behaviors and conditions impact job performance in such a negative way that it is permissible to prohibit unhealthy behaviors outside of work. Most common are smoking bans imposed upon public safety personnel, such as police officers and firefighters. Individuals in these occupations have long been required to meet physical fitness standards, and perhaps smoking bans are a logical extension of these requirements. Consider, for example, a police officer chasing a suspect on foot or a firefighter running up stairs to respond to an apartment fire. Smoking may affect his or her physical fitness in such a way that his or her ability to adequately respond in certain emergency situations is compromised. In the case of public safety personnel, proponents argue, a smoking ban is essential to the employee’s primary job function of protecting the safety of citizens. Several jurisdictions have upheld no-smoking policies as a reasonable condition of employment, particularly in the case of public safety personnel.

Employers, however, may be more motivated by financial interests than by potential improvement of job performance. The cost of health care has skyrocketed, and healthier employees mean less money dedicated to health care, workers’ compensation, and disability benefits. By reducing the number of employees with the risk of serious health complications caused by smoking and obesity, smoking bans and other lifestyle restrictions improve the bottom line.

Opponents of employment restrictions claim that employers are engaging in unlawful “lifestyle discrimination” and invading employees’ private lives. Many jurisdictions agree, prohibiting employers from imposing conditions of employment that regulate off-duty behavior that is otherwise legal. Of course, such laws may not apply to discriminatory hiring practices that affect individuals who are overweight/obese, because in those cases, the employers make decisions based on appearance, rather than to regulate the behavior that may lead to the disease (such as eating unhealthily).

Ultimately, as state and local government employers buckle under the pressure of soaring health care and related costs, they may be confronted with the decision of whether it is reasonable to impose hiring practices or conditions of employment that result in a healthier workforce. Such decisions require employers to carefully review jurisdictional precedence and balance the interests of employers against the rights of employees.

Post-Kelo Legislation in Minnesota and Wisconsin

By Andrew J. Pratt

 Andrew J. Pratt practices in the Duluth, Minnesota, office of Fryberger, Buchanan, Smith & Frederick, P.A.

 Nothing is to prevent the State from replacing any Motel 6 with a Ritz-Carlton, any home with a shopping mall, or any farm with a factory.” So wrote former U.S. Supreme Court Justice Sandra Day O’Connor, in her dissenting opinion in the Kelo v. New London case, decided in 2005. The “eminently” controversial Kelo decision upheld a condemnation proceeding by New London, Connecticut, to condemn and demolish a number of private residences to make room for restaurants, shopping areas, and a marina, all adjacent to a Pfizer research facility. Critics of the ruling claimed that the condemnation was not done for a public use, but was an unconstitutional taking of private property to assist private development. Supporters argued that municipalities must be able to redevelop economically depressed areas in order to spur growth. The Supreme Court’s ruling triggered a backlash in the states as twenty-seven state legislatures have passed various reforms of the eminent domain process.

Wisconsin and Minnesota each enacted reform bills in the last legislative session. Wisconsin Act 233 prohibits the condemnation of property that is not blighted if the municipality intends to convey or lease the property to a private entity. If a municipality intends to condemn property to convey or lease to a private entity, the municipality must first make written findings, including a conclusion supported by facts, that the property is blighted, the scope and legal description of the redevelopment project, and the purpose of the condemnation. These written findings must be provided to the owner of the property. The law contains a broad definition of blighted property, but provides that property containing only one dwelling unit is not blighted unless (1) it is unoccupied by the property owner, or a relative of the owner, or (2) the crime rate on or adjacent to the property is at least three times the crime rate in the remainder of the municipality. The Wisconsin legislation became effective immediately.

Minnesota ’s legislation is more comprehensive. The legislation limits the use of eminent domain only for a public use or public purpose, which includes use by the general public or public agencies. In addition, the law provides four other categories of public use: (1) mitigation of a blighted area, (2) remediation of an environmentally contaminated area, (3) reduction of abandoned property, or (4) removal of a public nuisance.

In order for an area to be considered blighted, it must be “in urban use” and 50 percent or more of the buildings in the area must be structurally substandard. A building is “structurally substandard” only if it has been cited for building code violations involving structural aspects of the building and the citations have not been remedied after two notices. In addition, the cost to cure the code violations must exceed 50 percent or more of the assessed value of the building.

The second sub-category for a public use, remediation of an environmentally contaminated area, requires that at least 50 percent of an area must contain contaminated parcels for which the estimated costs of cleanup exceed the assessed value of the parcel, or in which the property owner has not complied with a court order to remedy the contamination within a reasonable time.

A municipality may also claim a public use for the reduction of abandoned property, which is defined as property that has been unused or unoccupied for at least one year, has not been maintained, and for which taxes have not been paid for at least the previous two years. Finally, the fourth sub-category of public use, removal of a public nuisance, is already defined elsewhere in state law.

The stringent definitions of blighted and environmentally contaminated areas and abandoned property show that the legislature has severely constrained municipal authority to condemn property for redevelopment purposes. Even further, another provision in the law affirmatively states that the public benefits of economic development, including an increase in tax base, tax revenues, employment, or general economic health, do not by themselves constitute a public use or public purpose. This is a direct repudiation of the condemnation allowed in the Kelo case.

Another important segment in the Minnesota law has to do with attorney’s fees. This part of the law applies to all eminent domain proceedings, even those that relate to traditional public uses, such as roads or parks. If a final damage award to the property owner is more than 40 percent greater than the last written offer by the municipality for the property, the court must award the property owner attorney’s fees. If the final damage award is at least 20 percent, but not more than 40 percent, greater than the last written offer, it is within the court’s discretion whether to award attorney’s fees. No attorney’s fees are allowed if the final award is less than $25,000. Finally, if a court determines that a taking is not for a public use or is unlawful, the property owner is automatically entitled to attorney’s fees. These provisions dictate that municipalities secure multiple and accurate appraisals of property in order to make precise written offers to property owners.

Another increased cost of eminent domain in Minnesota is required compensation for loss of business goodwill. A property owner must be compensated for this loss unless the municipality can establish, by a preponderance of the evidence, that the goodwill loss is not caused by the condemnation, can be reasonably prevented through relocation, or that such compensation is already included in the property owner’s damages.

The Minnesota legislation also contains requirements on appraisals, negotiations, and municipal public hearings that should be reviewed before the commencement of any condemnation proceeding. The law went into effect immediately, with certain tax increment financing districts being grandfathered in.

Only time will tell whether eminent domain reform will have a real effect on municipal redevelopment projects in Wisconsin and Minnesota. It is immediately apparent, however, that municipalities will have to find ways to navigate sophisticated regulations and spend more money to condemn private property.

Communication Disruption by Hurricanes—What Are Your Remedies as a Cable and Telephone Subscriber?

By Scott A. Robin and Diane P. Perez

 Scott A. Robin is the chair of the communications practice in the Ft. Lauderdale, Florida, office of Weiss Serota Helfman Pastoriza Cole & Boniske, P.A. Diane P. Perez was a 2006 summer associate at Weiss Serota Helfman Pastoriza Cole & Boniske, P.A. and is currently a third-year law student at the University of Miami School of Law.

 During last hurricane season, many residents in both Florida and along the Gulf Coast lost cable and telephone services in the wake of Hurricanes Katrina, Rita, and Wilma. These hurricanes caused an unprecedented disruption in communications, leaving thousands of people without access to news and emergency information and without the ability to contact loved ones.1 Every Floridian should know what remedies are available to a subscriber in the event a hurricane disrupts communications.

Emergency Preparedness Plans

In light of last year’s hurricanes, the nation’s top cable companies have pledged to review and assess their emergency preparedness plans and continue ongoing efforts to coordinate emergency activities with first responders, government agencies, and service providers.2 After a comprehensive analysis of the adequacy and effectiveness of infrastructure recovery efforts, earlier this year the Federal Communications Commission (FCC) released recommendations on ways to improve disaster preparedness and network reliability and resiliency during emergencies.3 As a result, cable operators are working to ensure that their systems are ready in the event of another hurricane.4 For example, Comcast Cable Communications is taking a variety of steps to prepare for natural disasters.5 These measures include reviewing and updating emergency plans; conducting an assessment of system needs; coordinating emergency plans with local and regional equipment vendors, public utilities, broadcasters, and wireline and wireless phone companies; and reaching out to emergency personnel.6 In the event such measures and those taken by other providers still leave a subscriber without communication services after a storm, subscribers may pursue specific remedies at the state and local levels.

Remedies for Disrupted Communication Services Due to Natural Disasters

Remedies vary depending on whether a cable or telephone disruption is involved. Under the Cable Television Subscriber Protection and Competition Act of 19927 (the “Cable Act”) and FCC rules,8 a local franchising authority may enact and enforce subscriber protection regulations.9 The Cable Act and FCC regulations provide minimum requirements for cable services such as maintaining a conveniently located business office, staying open during normal business hours, answering telephone calls from subscribers within certain time parameters, standards for installations, service interruptions and service calls, training company representatives, measuring response time to customer telephone calls, scheduling appointment windows and cancellation, communicating between cable operators and subscribers, requesting refunds, and issuing of credits.10 These national rules provide local governments with the ability to enforce more stringent local consumer protection laws. Many cities and counties have adopted specific consumer protection provisions to address concerns that have arisen in their communities. The adoption and enforcement of such consumer protections impact the quality of cable services and are essential for subscribers nationwide. The standards give the local government the ability to require a certain level of customer service and to implement enforcement mechanisms and fines for noncompliance.

Although several Florida county and municipal cable ordinances provide for service credits or refunds for outages in the event a hurricane, last year many subscribers contacted cable companies for service credits because of the unprecedented disruptions and found that none were available. In fact, many cable franchises and cable ordinances do not provide for such consumer credits. Frequently, cable franchises and ordinances only provide for service credits or refunds for outages resulting from “normal operating conditions,”11 which are only those conditions within the cable provider’s control. Under these circumstances, subscribers will pay for services they did not receive. Although some cable providers remain reluctant to provide service credits or refunds for “acts of god” disruptions and incorporate “Force Majeure” clauses in franchise agreements, a recent trend has emerged in which cable providers seem more willing to automatically credit a subscriber’s bill for cable outages. Cable providers are even offering automatic credits for outages as an incentive for homeowners’ associations and condominium associations to enter into a “bulk” service agreement. However, for those cable providers that remain reluctant to voluntarily provide service credits, local cable ordinances should be amended to mandate these credits.

Many Floridians were without power for more than a week in the aftermath of Hurricanes Katrina, Rita, and Wilma and without cable services for even longer. In addition, just two years ago, Hurricanes Charley, Frances, Ivan, and Jeanne caused substantial damage to Florida homes. Thousands of residents lost electricity and cable service for extended periods of time. Despite being without cable services in the aftermath of these disasters, subscribers still had to pay their normal cable fees as some local cable ordinances did not provide for service credits. Because there are also thunderstorms, windstorms, floods, tornadoes, and other natural disasters in Florida and forecasters predict twelve-to-fifteen named storms this hurricane season,12 county and municipal authorities should revise their codes to require submission of emergency preparedness plans, as mentioned above, that provide an ascertainment of a cable operator’s policy on service credits or refunds in the event of outages after major service interruptions.

In addition to cable outages, many Florida residents lost telephone services because of the destruction caused by last year’s hurricanes. Although BellSouth Communications, Inc., has stated publicly that it would provide service credits for lack of telephone service caused by hurricanes, its good faith promise was not the only remedy available. Under section 25-4.110(6) of the Florida Administrative Code, telephone companies must make appropriate adjustments or refunds when a subscriber’s service is interrupted by anything other than the subscriber’s negligence or willful acts and remains interrupted for over twenty-four hours after the subscriber notifies the company. The refund is the pro rata part of the month’s charge for the period of days and the portion of the service and facilities rendered useless or inoperative.13

In the likely event of a telephone outage this hurricane season, residents should keep track of the number of days without service and immediately notify their telephone operators after power is restored. If the telephone company fails to provide a service credit on the following month’s bill, then residents should notify the Florida Public Service Commission, which regulates telephone companies.

Proposed State and Federal Legislation and Its Effect on Subscriber Remedies

Proposed state franchising legislation, HB1199, that would have eliminated local franchising authority and the local government’s ability to enforce customer service standards was passed by the Florida House of Representative, but failed in the Senate. Congress is also considering legislation to rewrite the nation’s telecommunication laws. The proposed federal legislation, the “Advanced Telecommunications and Opportunities Reform Act,” H.R. 5252, formerly titled the “Communications, Consumers and Broadband Deployment Act of 2006,” S. 2686, would strip local governments of their authority to franchise their public rights-of-way for cable services and impose a national franchising scheme.14 The FCC would have the authority to oversee and review all local rights-of-way management practices and customer service issues,15 thus restricting the flexibility local governments have enjoyed in the past in enacting service credit provisions within their cable ordinances. On June 8, 2006, the U.S. House of Representatives approved its version of the bill by a 321–101 vote,16 while the U.S. Senate is currently considering its own version.

Being left uninformed and without the ability to communicate with family and friends can be extremely frustrating. In the absence of preemption by a national franchising scheme, however, local and state remedies are available for time spent without cable and telephone services. Those remedies are in the form of service credits or refunds and can be found in a local government’s cable ordinance and in the Florida Administrative Code.

Endnotes

1. Press Release, National Cable & Telecommunications Association, Cable Commits to Readiness Plan for Hurricane Season (May 17, 2006), available at http://www.ncta.com/ContentView.aspx?hidenavlink=true&type=reltypl& contentId=3191.

2. Id.

3. Id.

4. Id.

5. Id.

6. Id.

7. 47 U.S.C. § 552.

8. 47 C.F.R. § 76.309.

9. Id.

10. Id.

11. 47 C.F.R. § 76.309(c)(4)(ii) defines “normal operating conditions” as those service conditions that are within the control of the cable operator. Those conditions that are not within the control of the cable operator include, but are not limited to, natural disasters, civil disturbances, power outages, telephone network outages, and severe or unusual weather conditions.

12. NOAA Continues to Predict Above-Normal Hurricane Season, NOAA News Online, Aug. 8, 2006, available at http://www.noaanews.noaa.gov/stories2006/ s2678.htm.

13. The refund is not applicable for the time the company stands ready to repair the service and the subscriber does not provide access to the company for such restoration work. Fla. Admin. Code Ann. R 25-4.110.

14. Alexander Ponder, Telecom Bill Moves from House to Senate, Nation’s Cities Weekly, June 19, 2006 (Newspaper), available at http://www.nlc.org/Newsroom/ Nation_s_Cities_Weekly/Weekly_NCW/2006/06/19/10844.cfm.

15. Id.

16. Id.