March 21, 2018

Changes in the Wind Bring New Opportunities in Florida for Advanced Israeli Transportation Firms

Holland & Knight Transportation Blog
Meital Stavinsky | David P. Sofge

Winds of change are blowing across Florida – not a חמסין (scorcher), but instead tropical breezes that bring new hope for residents dealing with snarled traffic and new opportunities for developers, local communities and Israeli companies with world-class autonomous vehicle technology. (For a look at the general U.S. picture and Israel's global role in innovative transportation, see "U.S. Congress Takes the Wheel on Autonomous Vehicles," Israel Practice Newsletter: Winter 2017.)

A New Test Track for Central Florida

First, on Nov. 13, 2017, officials from Florida's Turnpike Enterprise, along with state and local officials, dedicated SunTrax, a $42 million, 475-acre autonomous vehicle testing site. Florida Agriculture Commissioner Adam Putnam, a Republican candidate for governor, declared at the dedication ceremony that Polk County will be the "testbed for the next generation of technology." Construction on a 2.25-mile oval test track is expected to be completed by spring 2019. By agreement with the state, Florida Polytechnic University students will take the lead in sensor testing and wireless communication for the vehicles.

Platoons Form Up on the Turnpike

In December of last year, Florida's Turnpike was the setting for a successful test of "platooning" technology for commercial trucking. The test, using a combination of automated vehicle technologies, links two vehicles so that the driver of a lead truck controls acceleration and braking for a digitally linked "follow" truck, which travels in a position around 65 feet behind the lead truck – much closer than normally allowed. In this driver-assisted system, the follow truck driver retains control of steering, and either driver can sever the link whenever appropriate (as when another vehicle drops in between the two linked vehicles).

The objectives are improved safety and a substantial reduction in fuel consumption. Florida regulators have welcomed the testing of this technology, and a number of legislative proposals are in the works to facilitate use of the system if it continues to demonstrate that it can provide greater efficiency and improved safety.

Miami Builds Momentum

Now South Florida is moving into the fast lane for autonomous vehicle technology and related transit-oriented development. Late February brought news that Miami-Dade County has become the testing ground for a pilot program to gauge how residents will respond to autonomous and semi-autonomous vehicles. Partners in the program include Ford Motor Co., Domino's Pizza and Postmates (the nation's largest on-demand delivery service which will, inter alia, bring drinks to your door within 25 minutes under the company's alcohol-on-demand program). Ford and its partners are working closely with Miami-Dade County, which is researching ways to move residents from the suburbs to downtown. The county may be able to provide dedicated lanes and specialized traffic infrastructure for autonomous vehicles.

Mapping for the program is under way now. Ford anticipates Miami will be the company's largest test site for autonomous vehicles by the end of 2018. Few regulatory hurdles are anticipated, based on Florida's reputation as the most hospitable place in the U.S. for self-driving vehicles.

At the same time, the city of Miami and other municipalities, along with Miami-Dade County, are pushing hard for new transit-oriented development (TOD). This includes the new Brightline rail service, with a terminal complex rising near Miami's civic center at the western end of Flagler Street, and an ambitious Strategic Miami Area Rapid Transit (SMART) Plan for rapid transit corridors and express buses, under the leadership of Miami-Dade Mayor Carlos Giménez and the county's Transportation Planning Organization (TPO).

If successful, these efforts could help to relieve the pressure on Miami's notoriously snarled roadways and provide new flexibility for 'walkable' development that is less stressful, safer, and more sustainable for the future.

Money Matters

Financing for all this has not been neglected. In February, Miami-Dade County passed an ordinance authorizing tax increment financing (TIF) which explicitly references the SMART Plan's rapid transit corridors.

TIF has a turbulent history but has often been used with great success in Florida and elsewhere. It involves computation of a "tax increment" equal to 1) the total amount of ad valorem tax revenue collected in a specified district after a financed development which is in excess of 2) the base or "frozen" amount that would have been collected from the same area without the financed development. The tax increment can then be used for direct subsidies or as backing for an issuance of bonds.

Often criticized for straying from its original purpose to clear slums, improve blighted areas and provide affordability for low income residents (as detailed in a 2016 Miami-Dade County Grand Jury report) and even blocked by Gov. Jerry Brown in California, the land of its origin, TIF has nevertheless received a strong mandate from the Florida Supreme Court, most notably in its 2008 decision in Strand v. Escambia County, 992 So. 2d 150 (Fla. 2008). Under Strand and related Florida holdings, a referendum of affected electors, which is generally required for the issuance of bonds under the Florida Constitution, is not required for a TIF offering so long as the bondholders do not have a pledge of the issuing district's full faith and credit or of its ad valorem taxing power, even if the amount of the tax increment is measured based on a differential (before and after development) in the amount of ad valorem taxes attributable to the specified area. (Holland & Knight filed an amicus brief in support of the victorious party in Strand v. Escambia County.)

Looking Down the Road

These developments will be interacting in new ways through 2018 and beyond. How will Ford and its partners adapt the pilot program to the Florida initiatives for transit-oriented development? Will the county and its municipalities be able to incorporate the arrival of autonomous vehicles into their plans to radically transform the region's transportation environment?

Clearly, there are converging lanes ahead, but the signals are clear: Florida is positioning itself as an exciting new frontier for testing advanced transportation technologies as they continue their advance in the U.S. market. Joint collaboration in Florida between U.S. and Israeli autonomous vehicle companies has the potential to attract smart and innovative jobs to the region, to the benefit of providers and local communities alike.

About Our Autonomous Transportation Team Attorneys

Transportation in the 21st century is going through revolutionary change as mode of transport, infrastructure and technology converge in unprecedented ways. Holland & Knight's Autonomous Transportation Team has the in-depth experience and knowledge needed to help companies, including startups, in their efforts to define the future of this ever-evolving arena. Our attorneys and professionals advocate for clients and assist them in navigating all aspects of the complex legal, policy and regulatory landscape surrounding autonomous transportation, including in the automobile, aviation, maritime, rail, transit and trucking industries. We are uniquely positioned to assist clients in seizing opportunities and overcoming challenges for new autonomous transportation technologies.

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