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Business Observer Thursday, Feb. 26, 2009 9 years ago

High-wire Act

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This year's legislative session has everyone looking up from the throes of recession as the three-ring circus of House, Senate and Executive bodies seek to balance more than just the budget.
by: Jay Brady Government Editor

This year's legislative session has everyone looking up from the throes of recession as the three-ring circus of House, Senate and Executive bodies seek to balance more than just the budget, but also attracting jobs.


Editor's note: The full bills and staff analysis may be found at the “Online Sunshine” web site, www.leg.state.fl.us or go directly to the House or Senate web sites at www.myfloridahouse.gov or www.flsenate.gov, respectively, and click “Bills”.

Although their only true responsibility is to approve a balanced budget, the Florida Legislature will have to execute their task this year with the caution and precision of a circus aerialist or risk sending Florida's economy into an even deeper recession.

Economic development, growth management, regulations, fees and taxes are key elements of the more than 1,600 bills and joint resolutions filed by members of the Legislature heading into the annual session beginning March 3 in Tallahassee.

A special session was held in January to slice the current fiscal year state budget due to reduced revenues. Even after cutting $8 billion between the 2008 session and the special session, there still exists a funding shortfall of $5.5 billion to 6 billion, according to Rep. Will Weatherford, R-Wesley Chapel, a member of the Joint Legislative Budget Commission.

Senate President Jeff Atwater told the Senate Select Committee on Florida's Economy that the most important issue facing Florida is “creating and ensuring an environment for economic success for all Floridians...”

No Small task.

Singing from the same sheet of music as Atwater, Senate President Pro Tempore Mike Fasano, R-New Port Richey, told a Pasco County Economic Development Council group this month, “We've got to create jobs. We got 80 million baby boomers that will be looking for a place to live, so we've got to make Florida more attractive.”

One way Fasano is pursuing that goal is to sponsor SB 852, which would expedite the permitting process for economic development projects.

Some of the major stated goals of House leadership include:

• Creating a legal and regulatory environment that fosters economic growth and job creation;

• Lowering the tax burden on families and businesses;

• Reversing or restraining the growth of government.

The Review will be monitoring and reporting on these goals throughout the legislative session. To give readers with as much information as possible, we are providing an advance look at some of the key bills and resolutions likely to affect businesses along the Gulf Coast and throughout Florida.

In the following box, you will find a short list of House and Senate bills impacting businesses and the economy. The bill summaries have been abbreviated. The full bills and staff analysis may be found at the “Online Sunshine” web site, www.leg.state.fl.us or go directly to the House or Senate web sites at www.myfloridahouse.gov or www.flsenate.gov, respectively, and click “Bills”.

While most bills will die in committee, many will survive the committee process and emerge as committee substitutes. One such bill has already been modified — CS/SB 360, which creates the “Community Renewal Act.”

Expect this bill to be one of the most watched and controversial this session as its authors seek to revise the Growth Management Act and the Environmental Land and Water Management Act with the support of the state's top planner, Department of Community Affairs Secretary Tom Pelham.

One of the more prolific bill sponsors in the legislature is Sen. Mike Bennett, R-Bradenton. Bennett, the sponsor of SB 360, referred to the bill as “a small bite of a big problem,” when he closed out the testimony before the Senate Transportation Committee meeting Feb. 19. It must have been music to the committee's ears when Pelham, in his testimony to the committee, added his backing saying, “The department strongly supports the basis and the concepts of this bill.”

In addition to CS/SB 360, and in keeping with the legislative leadership's desire to revamp the state's burdensome regulatory structure to expedite economic recovery, several bills deal with rules, fees, economic development, real estate and foreclosure issues and, yes, taxes.

A surprising number of bills, in this economy, propose to raise taxes and fees, ranging from motor vehicle tag fees to sales and excise taxes. Others will attempt to hold the line on property, sales and excise taxes, and impact fees.
HB 329/SB 1134 is misleadingly titled “Streamlined Sales and Use Tax Agreement,” which, according to Rep. Weatherford, seeks to have Florida join 23 other states in a compact for a national internet sales tax. Congressional action would be required sometime down the road should enough states sign on to the effort. Some legislators are trying to sell it using the “F-word” — arguing it's about “fairness” to local merchants who must regularly remit the sales and use tax dollars to the Florida Department of Revenue.

Perhaps the most important long-term bill may turn out to be the 61-page HB 437, the Florida Hurricane Catastrophe Fund, which seeks to maintain “a viable and orderly private sector market for property insurance in this state,” and so far does not have a companion bill in the Senate.

A pair of House and Senate Joint Resolutions that will garner much media attention would put items on the ballot for voters to amend the Florida Constitution.

One, is HJR 97/SJR 532 — which is called the “Commercial and Residential Rental Property Assessment Limitation and Additional Homestead Exemption for First-Time Homestead Property Owners.”

This amendment would limit increases in assessments of real property used for commercial or residential rental purposes to the greater of 5% or the average annual percentage growth in revenues derived from property over the preceding three years, if ownership of property has not changed. The amendment would also provide first-time homestead property owners with an additional homestead exemption equal to 50% of a property's just value in the first year and be reduced by 20% in each succeeding year.

The second constitutional amendment is HJR 385/SJR 738 — “Limitation on Aggregate Ad Valorem Taxes on Real Property.” It would limit total ad valorem tax on a parcel of real property to 1.35% of the highest taxable value of the property with some limitations further described below.

REVIEW SUMMARY


What. Florida House and Senate Bills must balance lower revenues with greater needs of competing interests.
Issue. Will legislative leaders' goals be realized or will Gov. Crist wield veto power again?
Impact. Economic, fiscal, social, political

Proposed bills in summary


HB 485 (compare SB 1502) - Fast Track Economic Stimulus for Small Businesses
General Bill by Rep. Will Weatherford, R-Wesley Chapel
Fast Track Economic Stimulus for Small Businesses: Establishes New Markets Development Program; provides for tax credits for making qualified equity investments; provides requirements and limitations for such credits; specifies application and certification requirements and procedures for Office of Tourism, Trade, and Economic Development to qualify equity investments as eligible for tax credits; provides for calculation of tax credits.
Effective Date: July 1, 2009

HB 641/SB 1062 - Unemployment Compensation
General Bill by Rep. Steve Crisafulli, R-Merritt Island
Designates act “Accurate Employment Statistics Enhancement Act”; redefines term “employee leasing company” to reflect reporting requirements imposed by act; requires employee leasing company to submit report regarding its establishments to Labor Market Statistics Center.
Effective Date: Oct. 1, 2009

HB 437 - Florida Hurricane Catastrophe Fund
General Bill by Rep. Kevin Rader, D-Boynton Beach
Creates Division of Florida Hurricane Catastrophe Fund as division of State Board of Administration; revises provisions requiring State Board of Administration to invest specified funds; provides for reversion of fund assets upon termination of fund; provides for optional coverages of fund; revises temporary increases in coverage limits (TICL); requires TICL addendum to contain division promise to make reimbursements to TICL insurer; includes level of TICL coverage specified by board among factors required to be considered when determining amount of increase in fund's claims-paying capacity; requires division to employ specified methods, principles, standards, models, or output ranges when establishing reimbursement premiums for fund.
Effective Date: July 1, 2009

HB 55/SB 728 - Excise Tax on Documents
General Bill by Rep. Evan Jenne, R-Ft. Lauderdale and Sen. Mike Bennett, R-Bradenton
Limits imposition of tax to amount of consideration paid for property subject to mortgage when consideration is less than amount owed on mortgage.
Effective Date: July 1, 2009

HB 73/SB 852 - Expedited Permitting Process for Economic Development Projects
General Bill by Rep. Rob Schenck, R-Spring Hill and Sen. Mike Fasano, R-New Port Richey
Designates act “Mike McHugh Act”; requires DEP and water management districts to adopt programs to expedite processing of permits for certain economic development projects; requires municipalities and counties to identify certain businesses by resolution; provides timeframe for permit application approval or denial.
Effective Date: July 1, 2009

HB 167/SB 942, Compare SB 976 - Exemption from the Tax on Sales, Use, and Other Transactions
General Bill by Rep. Joseph Abruzzo, D- Wellington and Sen. Mike Bennett, R-Bradenton
Designates act “Consumer Energy Savings Act”; specifies period during which sale of energy-efficient product is exempt from tax on sales, use, and other transactions; provides limitation; provides for DOR to adopt rules.
Effective Date: July 1, 2009

HB 175/SB 356 - Local Government Officers and Employees
General Bill by Rep. Darren Soto, D-Orlando and Sen. Charlie Justice, D-St. Petersburg
Expands eligibility for participation in state group health insurance program and prescription drug coverage program to include all counties, municipalities, special taxing districts, and district school boards rather than only small counties and municipalities and certain school boards.
Effective Date: Oct. 1, 2009

HB 227/SB 580 - Impact Fees
General Bill by Rep. Gary Aubuchon, R-Cape Coral and Sen. Mike Haridopolos, R-Melbourne
Requires challengers of impact fees to prove specified elements by preponderance of evidence; prohibits courts from using deferential standards that favors either party to such actions.
Effective Date: July 1, 2009

HB 253/SB 474 - Use of Public Moneys and Property
General Bill by Rep. Eddy Gonzalez, R-Hialeah Gardens and Sen. Mike Bennett, R-Bradenton
Prohibits use of public funds for certain purposes benefiting professional sports team and provides exceptions; provides for ad valorem taxation of property owned by governmental entity if property is used by private entity for nonexempt purpose.
Effective Date: July 1, 2009

HB 329/S 1134 - Streamlined Sales and Use Tax Agreement
General Bill by Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee
Revises various provisions of law relating to Streamlined Sales and Use Tax Agreement, and puts the state in the column of states seeking a national internet tax.
Effective Date: July 1, 2009

HB 351/SB 742 (similar) - Property Insurance Rate Reduction
General Bill by Rep. John Legg, R-Port Richey
Creates “Property Insurance Rate Reduction Act”; requires insurance companies writing property insurance policies in state to consider county ordinances and amendments to Florida Building Code when setting property insurance rates.
Effective Date: upon becoming a law

HB 441/SB 856, compare S 932 - Coastal Management
General Bill by Speaker pro-tempore Ron Reagan, R-Bradenton
Includes specified port-related industrial or commercial project facilities within list of facilities that are not developments of regional impact, making their development easier.
Effective Date: July 1, 2009

HB 469 - Tax on Sales, Use, and Other Transactions
General Bill by Rep. Tom Grady, R-Naples
Tax on Sales, Use, and Other Transactions: Designates act “Aviation and Maritime Full Employment Act”; limits amount of tax collected on individual sales of aircraft or boats.
Effective Date: July 1, 2009

HB 731 - Tax on Sales, Use, and Other Transactions
General Bill by Rep. Dwight Bullard, D-Miami
Provides for one cent increase in sales & use tax rate; revises brackets for calculating sales tax amounts; provides for distribution of revenues from increase; provides for one-cent decrease in three years.
Effective Date: July 1, 2009

HB 477/S 850 (compare HB 11) - Cigarette Tax Revenues/Moffitt Cancer Center
General Bill by Rep. Will Weatherford, R-Wesley Chapel
Increases percentage of net collections deposited into Alcoholic Beverage and Tobacco Trust Fund from cigarette tax to be paid monthly to Board of Directors of H. Lee Moffitt Cancer Center and Research Institute for specified purposes; revises provisions providing for use of transferred moneys to include cancer research, treatment, and related facilities.
Effective Date: upon becoming a law and shall operate retroactively to Jan. 1, 2009

HB 519 (similar SB 256) - Electrical and Alarm System Contracting
General Bill by Rep. Lake Ray, R-Tallahassee
Electrical and Alarm System Contracting: Requires that electrical journeyman be present on industrial or commercial new construction site when certain electrical work is being performed.
Effective Date: July 1, 2009

HB 521, compare SB 1006, SB 1102 - Just Valuation of Property
General Bill by Rep. Carlos Lopez-Cantera, R-Miami
Revises provisions relating to factors for determining just valuation of property.
Effective Date: upon becoming a law

HB 571, similar SB 974 - Sales of Assets Other Than in the Regular Course of Business
General Bill by Rep. Perry Thurston, D-Ft. Lauderdale
Provides notice requirements for corporations and limited liability companies engaging in sales of assets other than in regular course of business.
Effective Date: July 1, 2009

HB 577, compare SB 768 - Tax Credits for Research and Development
General Bill by Rep. Scott Plakon, R-Longwood
Creates research and development tax credit program in DOR; provides that any unused credit may be carried forward for specified period; authorizes sale or assignment of unused credit to specified taxpayers.
Effective Date: July 1, 2009, and is effective for tax years beginning on or after January 1, 2010

HB 591/SB 216 - Campaign Financing
General Bill by Rep. Janet Long, D-St. Petersburg
Campaign Financing: Prohibits local government from spending, and persons or groups from accepting, public funds for political advertisements or electioneering communications concerning an issue, referendum, or amendment that is subject to vote of electors; provides exception and clarification.
Effective Date: July 1, 2009

HB 611/SB 616 - Public Construction Projects
General Bill by Rep. Dorothy Hukill, R-Port Orange
Public Construction Projects: Revises exceptions to requirement that certain public projects be competitively awarded; requires local government to support decision to perform project with its own employees and make factual finding that project cost will be same or less than lowest bid.
Effective Date: July 1, 2009

HB 653 - Homestead Property Foreclosure Actions
General Bill by Rep. Darren Soto, D-Orlando
Designates act “Foreclosure Bill of Rights”; provides procedural requirements and limitations for plaintiffs, defendants, and courts in homestead property mortgage foreclosure actions; specifies document production requirements; requires mediation; specifies settlement negotiation requirements; provides criteria for commercial reasonableness of renegotiated loans; provides for forbearance liens; provides lien limitations.
Effective Date: July 1, 2009

HB 709 - Construction Defects
General Bill by Rep. Gary Aubuchon, R-Cape Coral
Revises requirements and procedures for notice and opportunity to repair certain defects; authorizes parties to agree to mediation.
Effective Date: Oct. 1, 2009

HB 849/SB 1522 - Appraisal of Property
General Bill by Rep. Rachel Burgin, R-Tampa
Deletes requirement that property appraiser consider property's highest and best use when determining property's just value.
Effective Date: Jan. 1, 2010

HB 875/SB 1038 - Landlord-Tenant Relations
General Bill by Mia Jones, D-Jacksonville
Requires landlord or landlord's agent to notify mortgagee in writing within specified period that premise is being rented as dwelling unit and adds or changes many other requirements, such as prohibiting any purchaser who receives certificate of title on foreclosed premises from taking possession of premises earlier than 60 days after tenant is given written notice of foreclosure.
Effective Date: July 1, 2009

SB 304 (compare HB 105, SB 464) - Homestead Property Assessments/Increase/Just Value
General Bill by Sen. Mike Bennett, R-Bradenton
Permits an increase in the assessed value of homestead property only when the just value increases. Provides for retroactive application of the act.
Effective Date: Upon becoming law. Or, per HB 105, July 1, 2009, and shall operate retroactively to Jan. 1, 2009

SB 350/HB 47 - Entertainment Industry Economic Development
General Bill by Sen. Mike Haridopolos, R-Melbourne
Revises the entertainment industry financial incentive program to provide corporate income tax and sales and use tax credits to qualified entertainment entities rather than reimbursements from appropriations.
Effective Date: July 1, 2009

SB 360 (compare SB 1306) - Department of Community Affairs
General Bill by Sen. Mike Bennett, R-Bradenton
Cites this act as the “Community Renewal Act.” Extends dates relating to requirements for adopting amendments to the capital improvements element of a local comprehensive plan. Provides legislative findings relating to transportation concurrency exception areas. Revises provisions relating to the state review of comprehensive plans. Revises provisions relating to impact fees, etc.
Effective Date: Upon becoming law

SB 1306 - Growth Management
General Bill by Sen. Mike Bennett, R-Bradenton
Redefines the term “financial feasibility” to provide for school facilities that do not meet concurrency requirements in a particular year. Revises provisions relating to the concurrency requirements for public facilities.
Effective Date: July 1, 2009

SB 1408 - Taxpayer Rights/Supporting Documentation
General Bill by Sen. Ronda Storms, R-Brandon
Provides a taxpayer the right to be provided all supporting documentation used in a property appraiser's assessment, without requesting such documentation, 14 days before the value adjustment board's hearing date.
Effective Date: July 1, 2009

SB 1636 - Sale of Business Opportunities
General Bill by Sen. Carey Baker, R-Eustis
Deletes provisions that allow the seller of a business opportunity to post a certificate of deposit or guaranteed letter of credit in lieu of a surety bond. Increases the amount of the required surety bond.
Effective Date: July 1, 2009

HB 205/SB 1058 - Mortgage Foreclosure Diversion Pilot Programs
General Bill by Rep. Paige Kreegel, R-Port Charlotte and Sen. Mike Bennett, R-Bradenton
Authorizes each judicial circuit to establish mortgage foreclosure diversion pilot program; requires that when such program exists, conciliation conference must be held before foreclosure order may issue in proceeding concerning owner-occupied residential property.
Effective Date: upon becoming a law

Proposed Constitutional Amendments

HJR 385/SJR 738 - Limitation on Aggregate Ad Valorem Taxes on Real Property
Joint Resolution by Rep. David Rivera, R-Miami
Proposes amendment of State Constitution to limit total ad valorem tax on parcel of real property to 1.35 percent of highest taxable value of property; applies limitation to all ad valorem taxes on real property except those levied for payment of local bonds issued to finance or refinance capital projects authorized by law and approved by vote of electors or to refund outstanding bonds or levied for periods not longer than 2 years when authorized by vote of electors; requires Legislature to provide for distribution of revenues collected on parcels that exceed 1.35-percent limitation.

HJR 97/SJR 532 - Commercial and Residential Rental Property Assessment Limitation and Additional Homestead Exemption for First-Time Homestead Property Owners
Joint Resolution by Rep. Carl Domino, R-Juno Beach and Sen. Evelyn Lynn, R-Daytona Beach
Proposes amendments to State Constitution to limit increases in assessments of real property used for commercial or residential rental purposes to greater of 5% or average annual percentage growth in revenues derived from property over preceding 3 years if ownership of property has not changed and to provide first-time homestead property owners with additional homestead exemption equal to 50% of property's just value in first year and reduced by 20% in each succeeding year.

Other Bills of Interest


HB 75/SB 1120 University of South Florida

HB 93 (compare HB 283, SB 1510) Excise Tax on Documents

HB 101/SB 744 Homestead Assessments

HB 127 (similar SB 628), HB 149/SB 418, HB 199 (similar SB 656), HB 669 (similar SB 1026) Enterprise Zones

HB 183 Pinellas County

HB 269/SB 286 Super Enterprise Zones

HB 283 (compare HB 93, SB 1510) Discretionary Surtax on Documents

HB 303/SB 1262 Sale or Lease of Business Opportunities

HB 321, HB 657/SB 718, HB 787 (similar SB 1576) Discretionary Sales Surtaxes

HB 423/SB 1526, HB 459/SB 1112 Corporate Income Tax

HB 425 (compare SB 1640) Regulation of Professions

HB 517 (compare SB 596) Residential Tenancies

HB 563/SB 936 Homestead Property

HB 857/SB 1590 Communications Services Taxes

HB 863/SB 1362 Tax on Property Rental Fees and Tax on Admissions

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