2016 Session - Week 3

January 25-29, 2016

 

House and Senate $1 Billion Apart on Budget

The House and Senate Appropriations Committees both passed their versions of the next state budget this week, with the Senate adopting multiple amendments (the House adopted one amendment to correct an error.)  They will next be voted on by the full respective chambers before entering conference committees to negotiate the differences. .

The House spending plan totals $79.98 billion.  This is $1.58 billion more than current spending and $730 million more than the Governor recommended.  The Senate budget totals $80.97 billion, $1 billion more than the House.  

There are many differences that must be resolved before a final budget agreement is reached.  Some of the major differences are:

Taxes – The House Finance and Tax Committee has approved a “$1 billion” tax cut package.  The impact to state revenue in the upcoming budget year is only $305.6 million, but much more in future years.  The Senate has not released a complete tax package but its budget contemplates much less in tax cuts.

Trust Fund Sweeps – The House budget would take $402 million from trust funds to shore up available General Revenue, including $172 million from affordable housing and $79.5 million from economic development.  The Senate budget sweeps $120 million (none from housing or economic development.)

PECO – The Senate provides $369 million for education fixed capital outlay, the House provides $474 million.  The biggest difference is the House gives $90 million to charter schools, the Senate does not provide charters any PECO funding.

Economic Development Tools – The Governor recommended a $250 million fund to use to incentivize business to invest in Florida—in addition to $38 million in current economic development “tools.”  The Senate provides $250 million, but that includes all tools.   The House only provides $18 million.

Environmental Funding – The two chambers are about $200 million apart, with the House spending more on Everglades restoration and land acquisition and the Senate spending more on springs restoration.

Public School Funding - While the two chambers are close on per-student funding, how to pay for that (state revenue vs. local property taxes) may become an issue.

This week also saw several bills relating to Florida TaxWatch research priorities pass committees, including making the sales tax exemption for manufacturing machinery and equipment permanent, reducing the business rent tax, increasing funding for seaports, giving the Department of Transportation another funding tool, encouraging pre-arrest diversion programs, and expanding registered nurse and physician assistant scope of practice.  Florida TaxWatch appeared before several committees this week, presenting our research on many of these issues. 

Taxes

House Tax Cut Package – HB 7099 contains the House proposal to reduce taxes by “$1 billion.” The Finance & Tax Committee passed the bill this week and it will go directly to the floor. It is a wide-ranging proposal that includes almost 40—mostly small--provisions.  The House reaches its $1 billion total by adding the annualized recurring (permanent) cuts and the non-recurring (one-time) cuts – some of which do not take effect until FY 2017-18.  However, the total value of the cuts in the upcoming budget year is $353.7 million and will rise to approximately $600 million in FY 2017-18 (including both state and local revenue).

Florida TaxWatch commends the House for including two of our research priorities:

Sales Tax Exemption for Manufacturing Machinery and Equipment – The bill will make the exemption--set to expire April 30, 2017--permanent, saving taxpayers $73.1 million annually. Florida TaxWatch has presented its research findings in several Committees. The Governor has also included this in his recommended tax package.  This exemption is also moving in the Senate--SB 98 is now in its last committee—Appropriations.  

Business Rent Tax (BRT) – The bill would reduce the sales tax rate imposed on the rental of commercial property from six percent to five percent.  The tax will drop to 4 percent for one calendar year beginning January 1, 2018, then return to 5 percent.  The 1 percent reduction would save businesses $298.5 million annually.  Since the effective date is not until January 1, 2017, the tax savings in the upcoming fiscal year would be $120.6 million.  The reduction and eventual repeal of this tax, which is unique to Florida, is strongly supported by Florida TaxWatch. A BRT reduction is also part of the Governor’s proposed tax cuts, as well as in SB 116—which has already passed two committees in the Senate. 

The House package also includes four sales tax holiday, including a 10-day “back to school holiday,” a several relatively small reductions in sales, ad valorem, corporate income, and other taxes.   

For more information on the House Tax Cut Package see this Florida TaxWatch analysis.  

In addition, the Legislature continued to move other tax bills through the process including two Senate bills that contain tax cuts that are in the House package. 

Small Business Saturday Sales Tax Holiday - HB 721 and SB 1236 would create a one-day sales tax holiday on “Small Business Saturday,” November 26, 2016. During the holiday, a small business dealer may opt not to collect sales on purchases of items that cost $1,000 or less.  SB 1236 passed the Commerce and Tourism Committee this week.  

Renewable Energy Production Tax Credit - SB 1272 would make the credit statute permanent and increases the annual cap on the total value of credits from the current $10 million to $15 million. It would also allow unused credit funding in a fiscal to be carried forward.  The current credit is allowed annually based on the taxpayer’s production and sale of electricity from a new or expanded Florida renewable energy facility.  SB 1272 was passed by the Communications, Energy, and Public Utilities Committee this week. A one-year extension of the credit—with no increase in the cap--is also part of the House tax cut package (HB 7099) which was approved by the Finance and Tax Committee this week.

Three property tax-related proposals also advanced this week.

Revise the Millage Cap - HB 1015 and SB 1222 would change the way local governments determine their maximum allowable millage rate (without requiring a supermajority vote). Currently, the maximum millage rate that most non-school taxing authorities can levy by simple majority vote is a rolled back rate based on the amount of taxes which would have been levied in the prior year if the maximum millage rate had been applied, adjusted by the change in Florida per capita personal income.  These bills would base the rolled back rate on the amount of taxes actually levied in the prior year, adjusted for change in per capita Florida personal income.  This would in effect make the cap annual, not allowing local governments to build up a cushion between actual and allowable rates.  Florida TaxWatch understands the sentiment behind these bills, but is concerned they will put pressure on the governing bodies to levy the maximum rate or else lose the excess capacity.  Both bills were approved by committees this week.

Exemption for Parents of Unmarried Veterans Killed in Duty - HJR 1391 and SJR 1624 are proposed constitutional amendments that to allow the parent or parents of an unmarried veteran who died from service-connected causes while on active duty to receive ad valorem tax relief on a homestead property.  There is already an exemption for the spouse of a veteran killed in duty.  SJR 1624 passed the Community Affairs Committee this week.  The implementing bill (SB 1622) for the amendment also passed.  It would make the exemption 100 percent of the tax owed.

Exemption for Deployed Military Personnel – SB 160 and HB 7023 would add 11 military operations that qualify for the current property tax exemption for servicemembers deployed in the previous year SB 160 was placed on Special Order this week, to be considered by the full Senate next week. The House bill is also ready for a floor vote.

 

Education

These education bills that Florida TaxWatch is following were heard in committees this week:

Student and Teacher Assessment – SB 1360 would allow school districts to voluntarily drop the current Florida Standards Assessment test and instead use national standardized tests like the SAT and the ACT as the basis for assessing student achievement.  The bills also provides for several alternative assessments and industry certifications as options for students to meet high school subject area, course, credit, and assessment requirements. It also calls for the renegotiation of existing student assessment contracts and negotiation of new contracts to implement the alternative assessments. The bill further exempts the performance of students with excessive absences from counting against a classroom teacher’s performance evaluation.  SB 1360 has been approved by the Senate Education Pre-K – 12 Committee and is now in the Appropriations Subcommittee on Education.  However, there is no House companion measure.

Class Size Reform – SB 1634, which deals with school choice, specifies that the calculation for compliance with maximum class size requirements for a specified district innovation school of choice is at the school level. The bill also requires the State Board of Education to review at a specified interval the performance metrics of each individual innovation school of choice for compliance with certain requirements. SB is now in the Appropriations Committee.   HB 149 revises the method for calculating the penalty for schools that fail to comply with the class size requirements at the school level average. The bill clarifies that a school’s compliance with class size is measured at the classroom level and that only the calculation of penalties is based upon the school average. The bill also requires the amount of the financial penalties to be expended in the schools that are out of compliance to achieve compliance. The bill also requires the district to publish, by school, compliance data and the compliance plan on the school district website and provide a copy of the compliance plan to the School Advisory Committee at all noncompliant schools. HB 149 has been placed on the Calendar and is awaiting a floor vote.  Florida TaxWatch has released a series of reports on the topic of maximum class size requirements.

Principal Leadership - SB 434 and HB 287 create the Principal Autonomy Pilot Program Initiative. The Initiative is designed to afford provide highly effective principals of participating schools with greater autonomy to operate his or her school in a way that produces significant improvements in student achievement and school management. The Senate bill is in its last committee.  This week, HB 287 was approved by the Education Committee – its last committee stop.  The number of districts that will participate in the pilot has been increased from three to seven.  Florida TaxWatch honors a select group of outstanding principals each year as part of its Principal Leadership Initiative.

STEM Teacher Loan Forgiveness ProgramSB 290 and HB 15 create a STEM Teacher Loan Forgiveness Program to encourage and incentivize qualified college graduates to remain in Florida and to teach a science, technology, engineering, or mathematics (STEM) course at a public school. SB 290 was approved by the Senate Appropriations Subcommittee on Education last week.  The House bill has not been heard.

 

Economic Development

These are some of the economic development bills that Florida TaxWatch is following that advanced this week:

Sales Tax Exemption for Manufacturing Machinery and Equipment - The 2013 Legislature passed a three year exemption, set to expire April 30, 2017.  SB 98 and HB 115 will make the exemption permanent, saving taxpayers $76.9 million annually. This is a long-standing recommendation of Florida TaxWatch.  Florida TaxWatch has presented its research findings in several Committees. The Governor included this in his recommended tax package.  SB 98 is in its last committee—Appropriations.  The exemption is also in the proposed House tax cut package, which was approved as a proposed committee bill this week.

Transportation Funding – SB 756 and HB 7027 are the Florida Department of Transportation’s (FDOT) legislative packages.  One of the provisions would create the FDOT Financing Corporation, authorizing the corporation to issue debt for the purpose of financing needed transportation projects.  This would be another tool for FDOT to maximize existing revenue, the department would still be bound by the current statutory cap on debt.  This week, Florida TaxWatch released a study highlighting the benefits of, and the need for, increase transportation funding in the state.  Also this, the full House approved HB 7927 and SB 756 cleared the Appropriations Committee.

Seaport and Airport Funding – SB 756 and HB 7027 would also increases the funding for the Florida Seaport and Economic Development (FSTED) Program from $15 million to $25 million per year.  Florida TaxWatch research has shown the importance of seaport funding.  HB 7027 was approved by the full House this week and SB 756 cleared the Appropriations Committee.

HB 7061 creates the Florida Seaport Security Advisory Committee and the Seaport Security Grant Program, subject to legislative appropriation, to provide funding for the implementation of security plans and measures at Florida’s deepwater ports.  It also creates an aviation transportation and economic development program to finance airport transportation and facilities projects, and provides for a minimum of $15 million from the State Transportation Trust Fund to fund the program each year. HB 7061 was approved by the full House this week. 

State Economic Development Programs – HB 1325 and SB 1646 are omnibus economic development bills that would make numerous changes to various state economic incentive and tax refund programs, including the entertainment incentive program, the Quick Action Closing Fund and the qualified targeted industry tax refund program.  HB 1325 also creates the Innovation Florida Initiative to encourage high-technology startup and second-stage business growth.  Last year, Florida TaxWatch released a report that highlighted the benefits of second-stage companies.  Last week, the Commerce and Tourism Committee passed a committee substitute for SB 1646.  Among the changes contained in the CS are the renaming of the Quick Action Closing Fund to the Florid Enterprise Fund.  The bills also lowers the required return on investment from 5 to 1, to 3 to 1, requires that projects create at least 10 jobs and requires that 20 percent of the award comes from local financial support.   This fund is a priority of the Governor, who recommended funding of $250 million.  The Senate has tentatively agreed to that amount.

 

Smart Justice

These criminal justice bills that advance recommendations of the Florida TaxWatch Center for Smart Justice were heard in committees this week:

Prearrest Diversion ProgramsSB 618 and HB 1031 encourages local communities to implement diversion programs for certain offenders and enabling law enforcement officers to issue civil citations to adults in specific circumstances. HB 1031 passed the Criminal Justice Subcommittee this week.  SB 618 was placed on 3rd reading and is schedule for a floor vote next week.  Florida TaxWatch research has been cited during testimony on the bill.

Juvenile Criminal Records – A number of bills making it easier for juveniles to clear their criminal records are nearing becoming law.  SB 386, which decreases the period of time a minor’s criminal history record must be retained before expunction, has already been approved by the full Senate.   HB 147 lowers the age of automatic expunction of juvenile criminal records from 24 and 26 to 21 and is on the House calendar.  HB 293 and SB 700 exempt juvenile information compiled by the Criminal Justice Information Program from public records.  HB 293 has been approved by two committees and SB 700 was approved by the Criminal Justice Committee this week.  

Mental Health Services in the Criminal Justice System – HB 439 and SB 604 look to expand the use of mental health and veterans courts and other diversion programs.  They expand eligibility for veterans, authorize creation of mental health court programs, allow county courts to order conditional release of defendant for outpatient care and treatment, creates a Forensic Hospital Diversion Pilot Program (FHDPP),   expand eligibility for certain pretrial intervention programs, and authorize pretrial mental health court programs for juvenile offenders. Florida TaxWatch research has shown the benefits of these courts as cost-effective diversion programs. A committee substitute for HB 439 was approved by the House Appropriations Committee last week. The CS text, which was filed this week, makes implementation of the FHDPP discretionary.   The Senate companion has passed one committee. 

Alternative Sanctioning - HB 1149 creates an alternative sanctioning program for technical violations of probation. A technical violation is a violation of supervision that is not a new felony offense, misdemeanor offense, or criminal traffic offense. The bill allows a judge to establish an alternative sanctioning program and determine which technical violations will be eligible for alternative sanctioning. An eligible probationer who commits a technical violation may choose to participate in the program and admit to the violation, comply with a probation officer’s recommended sanctions, and waive his or her right to a hearing on the violation. A probation officer’s recommended alternative sanction must be reviewed by the court, which may approve the sanction or remove the probationer from the program. This could save money by reducing arrests, incarceration of offenders pending technical violation hearings, and probation officer and court personnel time spent at violation hearings. HB 1149 was approved by the Criminal Justice Subcommittee last week.

 

Health & Aging

Two health care bills that advance a recommendation of the Florida TaxWatch Center for health and Aging were heard in committee this week:

ARNP/PA Scope of Practice – The Florida TaxWatch Center for Health and Aging has released reports detailing the benefits of expanding nurse and physician assistant scope of practice.  A number of bills have been filed this session to allow ARNPs and PAs to order medication in certain circumstances. Currently, Florida is the only state not allowing these individuals this authority.  HB 977 and HB 1241 were both approved by the Health and Human Services Committee this week. Florida TaxWatch presented our research findings before the committee.

 

Other CHA Priority Bills

Telehealth – Another priority of the Florida TaxWatch Center for Health and Aging (see report) is telehealth, which involves providers using the Internet and other technology to care for patients remotely.  It can increase access to health care in areas such as rural communities.  HB 1353 and SB 1686 authorizes health care practitioners to use telehealth and creates a Telehealth Task Force within AHCA to analyze and make recommendation concerning telehealth.  HB 7087 opens up access to telehealth services by licensed health care professionals.  Professionals outside of the state may also provide telehealth services to Floridians if they register with the Department of Health (or applicable board), meet requirements, and pay a fee.  They would be prohibited from opening a physical office/offering in-person services in Florida, but would otherwise be able to practice within the relevant scope of practice established by Florida law and rule.  HB 7087 has been approved in proposed committee bill form last week. SB 1686 has passed one committee.

Behavioral Health Services - HB 7097 and HB 979 seek to further align the Marchman and Baker Acts, as well as implement coordinated receiving systems and county transportation systems.  These two bills include TaxWatch recommendations, calling for data driven funding and raising the age of transition for SAMH services from 18 to 21.  SB 12 seeks to improve mental health and substance abuse programming in Florida, and creates a single, consolidated license to provide both mental health and substance use disorder services.  The House Children, Families & Seniors Subcommittee passed HB 7097 (PCB CFSS1) and HB 797 last week.  SB 12 passed the Appropriations Subcommittee on Health and Human Services last week. 

 

Government Efficiency

Public Records – SB 1220 and HB 1021 amend current law to provide that in a public records enforcement lawsuit, a court may, but is not required to, award reasonable enforcement costs, including attorney fees, to the complainant if the court determines the agency unlawfully refused to provide a public record. To be awarded such costs, the bill also requires a complainant to provide written notice of the public records request to the agency’s records custodian at least 5 business days before filing the lawsuit.  HB 1021 was approved by the Government Operations Appropriations Subcommittee this week, with Florida TaxWatch research being citing during the debate.  SB 1220 is on the Judiciary agenda next week.

HB 273 requires requests for public agency records relating to contracts for services to be made directly to the public agency and revises several provisions in agency contracts for services related to public records.  After passing the full House last week, HB 273 was approved by the Senate this week and now goes to the Governor.

Florida TaxWatch released its report on predatory public records abuses last week, offering recommendations to prevent malicious and frivolous lawsuits while protecting taxpayer's rights to government in the sunshine. These recommendations include educating government employees on the public records laws, creating a requirement to give notice to an agency of the intent to sue prior to civil litigation and permitting public agencies to recover their attorney fees and related costs if the court determines that the public records request is frivolous or serves no legitimate public purpose or interest. 

Sale of Surplus State Land – HB 359 and SB 546 make it easier and more efficient for water management districts to sell surplus land. The bills authorize water management districts to sell parcels of land valued at $25,000 or less through an expedited process and make other changes to make the process more efficient.  Both bills passed committees this week.  The house bill has been placed on the Special Order Calendar.

  

Municipal Power Regulation – HB 579 would impose additional transparency and accountability requirements on the Florida Municipal Power Agency, as recommended by Florida TaxWatch.  The bill was approved by the Government Operations Appropriations Subcommittee last week.  Florida TaxWatch presented its findings to the committee and our research was cited several times during testimony and debate on the bill.

Government Efficiency - SB 7052 requires the Governor to develop government efficiency recommendations on an annual basis and to submit them to the Legislature for consideration as part of the General Appropriations Act. State agencies are required to report quarterly regarding the implementation of the recommendations and any cost impacts for the first two years. This is a longtime Florida TaxWatch recommendation and is a recommendation of the Government Efficiency Task Force and is included in the Task Force’s January 2016 Interim Report. The bill has been approved by the Senate Governmental Oversight & Accountability Committee. Florida TaxWatch spoke in support of the bill and the good work of the Task Force.

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Media Inquiries:  Contact Joe Follick by Email or Cell: 850.212.5052

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Contact Joe Follick by Email
or Cell: 850.212.5052

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