The state legislature has passed Bill 601/2892 that reconfirms the power of the Cape Canaveral Taxing District to tax, buy, sell and condemn lands inside and outside its district. Cape Canaveral hospital is seeking to fill in 8.85 acres of the Banana River to add new medical offices and increase parking areas. The fill would require over 200 million pounds of material to be dumped into the Lagoon. Amendments to the bill added by Representative Bob Allen allows the Taxing District to ignore local government's laws on the height and density of building and the filling of the Lagoon. The bill also states that if the taxing district is allowed to swap land it owns for Aquatic Preserve Land, filling the preserve will be presumed to be in the public interest. The bill is expected to go before the Governor on July 1. The hospital claims it is 72% occupied though its own needs assessment states it has a 48.8% occupancy rate. Data from the Florida Agency for Healthcare indicates the hospital occupancy rate is lower today than ten years ago and at no time has ever been higher than 66% when 80% is required to be permitted to add hospital beds. The expansion will add seven story buildings and two multistory parking lots but no hospital beds. Most of the 8.85 acres the hospital wants to fill are publicly-owned and part of the Banana River Aquatic Preserve, created by the Legislature to protect valuable submerged lands that are critical to water quality, the marine environment and economic well being of marine based businesses. The Aquatic Preserve rules prohibit filling or structures in an aquatic preserve. The MRC's position is that allowing the filling in of an aquatic preserve would set a precedent that would undo the most important protection given to any portion of the Indian River Lagoon, an Estuary of National Significance. One acre of seagrass would be buried by the fill. Each acre of seagrass provides habitat for 10,000 fish. If the entire proposed fill area were restored it would provide habitat for over 88,000 fish.

   The hospital has proposed mitigating for its impacts by deeding back to the state the submerged lands it was given in 1959 that it has not been allowed to fill. It also proposes additional mitigation such as refilling in a deep portion of the river and replanting sea grass there. Transplanting seagrass has never been successful in the Lagoon. The US EPA, US Fish and Wildlife and the National Marine Fisheries Service have all stated that similar versions of this project would substantially impact aquatic resources of national importance. The hospital proposes to fill in waters conditionally approved for harvesting shellfish and St. Johns River Water Management District rules prohibit permits for filling this class of waters. Local residents, a Cocoa Beach City Councilman and the Florida Audubon Society have filed for an adminis-trative hearing with the Water Management District to block the hospital from receiving a permit to fill the lagoon. Charles Lee of Florida Audubon wrote "this open water fill is identical to the type of dredge and fill activities that once were responsible for devastating tens of thousands of acres of Florida's coastal estuaries." Sierra Club and the Partnership for a Sustainable Future have opposed the proposal and argue that the hospital is part of the Health First Network which could expand other facilities in the area to provide increased service or expand onto existing parking lots rather then fill in the Lagoon. Save the Manatee Club opposes the expansion because the acres to be filled are listed as critical habitat for the manatee. The Lagoon brings $800 million annually to the local economy.