Fourth Week of Session - March 23-27

Budget and tax cut proposals took center stage this week. Both the House and the Senate passed their versions of the next state budget out of their respective appropriations committees.  The spending plans will now go to the floor. Learn where lawmakers are suggesting to spend your money and discover the $4 billion difference between the two proposals in the latest Florida TaxWatch Budget Watch.

The House budget totals $76.154 billion and the Senate budget comes in at $80.425 billion—which would be the largest budget in history.   The House proposal is $826 (1.1 percent) million less than the Governor’s recommended budget and $919 million (1.2 percent) less than current year spending.  The Senate budget would be a 4.3 percent increase over current year spending.  Despite the big difference in budget totals, the two chambers are fairly close in many areas. The higher Senate budget is due to a proposed increase in federal dollars being drawn down through its alternative to Medicaid expansion.  In fact, the Senate spends $229 million in general revenue less than the House.  For more information on the two budget see the new Florida TaxWatch Budget Watch.

The House also released its $690 million tax cut package.  The centerpiece of the proposal is a $470.5 million reduction in the communications services tax.  The rest is a patchwork of many different tax cuts some of them very small and many that had not been part of any legislation so far this session.  The Senate does not plan to release its tax proposal until some of the budget issues, especially in health care, are sorted out. See the full house proposal.    

For more information on any of these issues, please feel free to contact our Research staff by emailing Stephani Meyers, Research Assistant.

Taxes

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Action This Week

House Tax Cut Package – The big news this week was the announcement of the House’s $690.1 million tax cut package.  The centerpiece of the proposal is a $470.5 million reduction in the communications services tax.  The rest is a patchwork of many different tax cuts some of them very small and many that had not been part of any legislation so far this session.  The proposal includes:

Tax Rate Reductions

  • A reduction in the state communications services tax on wireless phone, cable and satellite television and non-residential landline phone services rate by 3.6 percentage points ($470.5 million);
  • A small reduction in the sales tax on commercial leases from 6 percent to 5.8 percent ($53.1 million).

Sales Tax Exemptions 

  • Agricultural items, including, irrigation equipment, costs of maintenance and repairs of irrigation, power farm equipment, stakes, and certain trailers and feed for aquatic organisms ($13.4);
  • School book fairs ($2.8 million);
  • K-12 food and beverage concessions in support of extra-curricular activities (1.7 million);
  • College textbooks and instructional materials ($43.7 million);
  • Machinery and equipment used for metal recycling ($0.9 million);
  • Gun club memberships or admissions $1.2 million); and
  • Motor vehicles brought to Florida by military personnel deployed outside the U.S. ($0.9 million).

Sales Tax Holidays

  • A 3-day "back-to-school" holiday for clothing, school supplies, and computers ($44.0 million);
  • A one day holiday for items sold by small businesses priced at or below $1,000 ($40.3 million); and
  • A one day tax holiday for firearms, ammunition, camping tents, and fishing supplies ($3.2 million).

Property Taxes

  • Increases the exemption for widows, widowers, blind, or totally and permanently disabled persons from $500 to $5,000 ($41.3 million); and
  • Updates and expands the partial homestead exemption available to military servicemembers deployed overseas ($0.2 million).

Corporate Income Taxes

  • Creates a new credit for federal defense contractors that hire Florida subcontractors ($5.5 million);
  • Increases the annual amount of research and development tax credits from ($14.0 million);
  • Increases tax credits available for voluntary brownfields clean-up ($12.0 million); and
  • Extends the Community Contribution Tax Credit program ($13.3 million).

Other Changes 

  • Equalization of the tax rates applied to apple and pear cider ($0.5 million);
  • A one year extension of a current title insurance premiums tax reduction ($4.5 million); and
  • An exemption from the aviation fuel tax for fuel used by Florida higher educational institutions. 

The total tax savings in this package is $690.1 million, of which $36.5 million is local government revenue.  These changes do not have a significant effect on state trust funds, so the $653.7 million state impact is all general revenue.  Some of these tax cuts are one-time, such as the sales tax holidays.

The first year impact of the tax cuts on revenues for the new budget is $608.4 million in general revenue.  

Florida TaxWatch commends the House for including the communications services and commercial lease tax cuts and the increase in the research and development tax credit in its tax package.  We urge the Legislature to try to increase the commercial lease tax reduction and also include making the sales tax exemption for manufacturing machinery and equipment permanent.  The Senate does not want to release its tax proposals until some of the budget issues, especially in health care, are sorted out.

There was action on several tax bills this week, including:   

Exemption for Manufacturing Machinery & Equipment – Another Florida TaxWatch priority.  A 3 year exemption on the sales tax for manufacturing machinery and equipment is set to expire in 2017. SB 544, which passed the Commerce & Tourism Committee, will make the sales tax exemption permanent.

Commercial Leases - SB 140, reducing the sales tax on commercial leases from 6 percent to 5 percent, passed the Senate Finance and Tax Committee this week.  Florida TaxWatch strongly supports the reduction/elimination of this tax.  A small reduction in the tax (0.2 percentage points) is part of the House tax package which was announced.

Sales Tax Exemption for College Textbooks - SB 938, which would exempt college textbooks from the state and local sales tax, passed the Higher Education Committee. 

Value Adjustment BoardsHB 260 increases accountability for local Value Adjustment Boards, and passed Fiscal Policy.  

Property Tax Exemption - HB 173 would increase the exemption for widows, blind persons, and totally and permanently disabled persons from $500 to $5,000.  It was passed by Local and Federal Affairs.

Small Business Sales Tax Holiday – SB 384 creates a one day sales tax holiday for small businesses, and passed the Finance and Tax Committee. 

Corporate “Piggy-Back” Bill - SB 7014 was approved by the Fiscal Policy Committee.

Direct Mail Advertising - SB 858 would create a new sales tax exemption.  It passed the Commerce and Tourism Committee this week.

For more information on these and other tax bills, see below.

Florida TaxWatch Tax Priorities

Communications Services Tax – This the largest reduction in the Governor’s tax cut package ($470.9 million) is a 3.6 percentage point reduction in the state portion of the CST, a tax levied on cell phones, cable and satellite television and non-residential landline phone service.  The state rate on phone and cable television would fall from 6.65 percent to 3.05 percent. The rate on satellite television would fall from 10.8 percent to 7.2 percent.  Consumers will save $43 annually for every $100 per month they spend on communications services. Since part of the state CST is shared with local governments, the budget provides $44.8 million in GR to hold local governments harmless from the CST cut. Florida TaxWatch has been recommending a reduction in the CST for several years, finding that it would be the most justifiable way to give broad based tax relief to Floridians.  Florida’s total state and local CST rate can reach as high as 16.29 percent, one of the highest rates in the nation.  Florida’s CST rate is also more than twice the highest state and local general sales tax rate in the state.  A committee substitute for SB 110 was approved by the Communications, Energy, and Public Utilities Committee which increased the tax rate reduction from 2 percent to 3.6 percent to mirror the Governor’s recommendation.  The Committee invited Florida TaxWatch to testify on the bill.  SB 110 passed Senate Finance and Tax last week and now goes to its last committee stop – Appropriations.  This week, the House announced its proposed tax package, which contains the CST reduction. The package was discussed in the House Finance and Tax Committee this week but the bill has not yet been filed.  

Sales Tax Exemption for Manufacturing Machinery and Equipment - The 2013 Legislature passed a three year exemption, set to expire April 30, 2017.  SB 544, HB 613, SB 1044 and HB 4035 would all make the exemption permanent. This is a long-standing recommendation of Florida TaxWatch.  The extension will not cost the state any money this year, but recurring savings are expected to be $142.5 million annually. Under SB 544 and HB 613, the exemption for cement mixer drums enacted last year would still expire on April 30, 2017.   HB 613 has passed the Economic Development and Tourism Committee.   SB 544 passed the Commerce and Tourism Committee this week and is on the Finance and Tax agenda next week (Monday).  This exemption is not part of the House tax cut package that was released this week.

Commercial Leases - A tax cut that was not included in the Governor’s proposal, but which appears to have legislative support, is a reduction in the sales tax on commercial leases.  HB 101, SB 140, HB 245 and SB 1230 all would reduce the tax.  The first two would reduce the tax rate from 6 percent to 5 percent.  HB 245 and SB 1230 would create an increasing exemption.  The first $10,000 of lease payments would be exempted in FY 2105-16, and the exemption would increase by $10,000 annually, until it reached $90,000 in FY 2023-24.  Florida TaxWatch strongly supports the reduction/elimination of this tax, which is unique to Florida.  SB 140 passed the Senate Finance and Tax Committee this week.  A small reduction in the tax (0.2 percentage points) is part of the House tax package which was announced this week.

Collection of Sales Taxes on Remote Sales: Florida TaxWatch has been researching this issue and recommending solutions for more than 10 years.   Many bills have been filed to help address this over the years.  This year SB 310 would bring Florida fully into the Streamlined Sales and Use Tax Agreement, which provides an opportunity for Florida to begin collecting money from a compact of sellers that voluntarily collect the tax.  HB 101 would expand nexus over remote retailers, requiring more retailers to collect tax on sales to Floridians.  HB 1265 is a memorial urging Congress to support the Marketplace Fairness Act.  These bills have not yet been heard.

Sales Taxes

Sales Tax Holiday – The Governor is recommending another of the popular “back to school” sales tax holidays.  The 3-day sales tax exemption for clothing priced at $100 or less, school supplies at $15 or less, and the first $750 of the price of a computer would save consumers $41.1 million.  No legislation that mirrors this has been filed yet (although there certainly will be), but HB 101 would create a permanent 3-day holiday on the same items.  This week, the House announced its proposed tax package, which contains a three-day holiday.

Sales Tax Exemption for College Textbooks - The Governor also wants to exempt college textbooks from the state and local sales tax. The exemption would apply to textbooks for both public and private institutions. College students would save an estimated $41.4 million per year, or $60 to $75 per student annually.  The state would lose $33.9 million annually, local governments would lose $7.5 million annually.  SB 938 and HB 1317 contain this exemption.  The Senate bill includes the textbook exemption, as well as other provisions aimed at keeping higher education affordable, such as requiring an annual report to the Legislature from Board of Governors and State Board of Education on their respective college affordability efforts.  SB 938 passed the Higher Education Committee this week.

Agricultural Exemptions - HB 249 and SB 398 -- would create and expand several agricultural sales tax exemptions:

  • Adds irrigation equipment and repair to the existing exemption for the sales or lease of farm equipment;
  • Exempts the sales price of up to $20,000 for a trailer weighing 12,000 pounds or less;
  • Exempts stakes used by a farmer to support plants during agricultural production; and
  • Expands the term “livestock” to include aquaculture species raised for commercial purposes.

SB 398, which would save $13.4 million annually, has passed the Senate Agriculture and Finance and Tax Committees.  This week, the House announced its proposed tax package, which contains the exemptions.

Small Business Saturday Sales Tax Holiday - HB 259 and SB 384 would create a one-day holiday (November 28, 2015) during which no sales tax would be collected on any retail sale by a small business.  A small business would be a business that remitted less than $200,000 in sales taxes to the state during the previous year.  SB 384 cap the value of exempt items to $500 and HB 259 caps it at $1,000.  The fiscal impact of this legislation with the $1,000 cap is $40.3 million.  HB 259 has passed the Finance and Tax Committee.  SB 384 passed the Finance and Tax Committee this week.  This is also part of the new House tax package.

Direct Mail Advertising - SB 858 would create a sales tax exemption for DMA goods and services.  It passed the Commerce and Tourism Committee this week and now goes to Finance and Tax.

Sales tax bills that were not heard in committee this week:

HB 693 and SB 712 would exempt the sale or lease of all aircraft from the sales tax.  Currently the exemption is provided only for aircraft over 15,000 pounds that is used by a common carrier.

HB 355 and SB 506 would change the method for calculating the amount of sales tax due on all purchases.  Instead of using the current bracket system, the sales price would be multiplied by the tax rate and rounded down to the nearest cent. These bills have not been heard and its significant price tag - $101 million - will make it difficult to advance.  

HB 303 and SB 624 would impose a 25 cent surcharge on tickets to professional sporting events to fund high school sports programs.

SB 198 would allow the governing authority in each county to levy a discretionary sales surtax of 0.5 percent or 1 percent for the purpose of funding capital restoration of natural water bodies, including tributaries, canals, stormwater systems, and channels.  Funds may be used for dredging operations if related to ecologically beneficial muck removal.

HB 89 and SB 188 would exempt the sale of an original work of art that is signed and sold by the artist if the work is not numbered and the sales price equals or exceeds $1,000.

SB 864 and HB 905 would exempt the sale of electric and hydrogen motor vehicles.

HB 101, HB 739 and SB 900 would create the Restaurant and Hotel Renovation Tax Refund Program allowing hotels and restaurants that undertake renovations could apply for sales tax refunds.  To qualify the hotel renovation must be at least $2 million and the restaurant renovation must be at least $100,000.  The refund would be based on the additional sales tax the business collects after renovation and cannot exceed 50 percent of those taxes.

Sales Tax Exemption Review – HB 1221 would also create a Joint Legislative Sales & Use Tax Review Committee to examine exemptions and exclusions for possible repeal or modification.  It also would create a water’s edge unitary corporate income tax scheme for Florida.  This bill has not yet been referred to a committee and has no Senate companion.

Property Taxes

Value Adjustment Boards (VAB) - HB 695 and SB 972 would make several changes to the VAB process including: taxpayers must sign the petition; interest on assessment and refunds would change from 12 percent to the prime rate; and a VAB that received more than 10,000 objections would be reviewed by the Department of Revenue.   SB 972 passed the Community Affairs Committee last week and is on the Finance and Tax agenda for next week (Monday).  HB 695, which also changes the composition of VABs from county commissioners, school board members, and citizen members to all citizen residents of the county appointed by their legislative delegation, has passed Finance and Tax.

SB 260 and HB 489 would allow a taxpayer to include multiple items of substantially similar tangible personal property on a single VAB petition and to pay a single petition filing fee.  HB 489 has already been unanimously approved by the full House.  SB 260 passed the Fiscal Policy Committee this week and is on the Special Order calendar next week.   

Property Tax Exemptions - HB 173 would increase the property tax exemption for widows, blind persons, and totally and permanently disabled persons from $500 to $5,000.  It was passed by Finance and Tax last week and passed the Local and Federal Affairs Committee this week. It is also part of the House tax proposal.

Property tax bills that were not heard in committee this week:

Save Our Homes “Glitch” Bill - SJR 1142 would repeal the recapture provision which allows the assessed value of homestead property to increase by the SOH cap, even if the market value falls, provided that the assessed value does not exceed the just value.

Law Enforcement Services Special Assessment -  SB 780 and HB 919 would allow the governing body of a municipality to levy this asessment to fund all or a portion of its costs of providing law enforcement services if property tax millage is reduced by a similar amount.  SB 780 has passed the Community Affairs Committee and is now in Finance & Tax.

Renewable Energy Source Devices - SJR 400 and HJR 865 propose an amendment to the state Constitution that would exempt the assessed value of these devices from the tangible personal property tax and allow the Legislature, by general law, to prohibit consideration of the installation of such device in determining the assessed value for real property taxes. It would expire December 31, 2036.  SJR 400 has passed the Communications, Energy, and Public Utilities Committee and HJR 865 has passed the Energy & Utilities Subcommittee.

Property Tax Exemptions - HB 847 and SB 1086 would create a new property tax exemption for businesses located at the same location for at least 20 years.  Improvements to the property that are made as a result of technological or production advances or to meet new regulatory requirements would not increase the property's assessed value for a period of 10 years.  Also, the new machinery and equipment included in such improvements would not be subject to tangible personal property taxes.  

HJR 229 and SJR 588 propose an amendment to the state Constitution to allow the Legislature, by general law, to exempt from taxation property owned by a municipality that is not used for municipal or public purposes. 

HJR 299 and SJR 910 propose an amendment to the state Constitution to authorize the living spouse of a deceased veteran, who upon death was aged 65 or older, partially or permanently disabled as a result of combat, and honorably discharged, to keep the discount on ad valorem taxes currently afforded the veteran.  The exemption is based on the percentage of the veteran's disability.  The exemption would be transferrable to another residence if the spouse remains unmarried and uses it as the primary residence.  SJR 910 passed the Military and Veterans Affairs, Space, and Domestic Security Committee last week.

HJR 375 and SJR 652 propose an amendment to the state Constitution that would revise the current homestead tax exemption that may be granted by counties or municipalities for low-income, elderly people that have lived in their home for at least 25 years.  The current exemption is 100 percent of the assessed value of a homestead with a just value less than $250,000.  The amendment would lock in the just value of the home to its value when the exemption is originally applied for, meaning the taxpayer would not lose the exemption due to rising value.  SJR 652 passed the Community Affairs Committee last week.

Taxpayers' Bill of Rights - HB 417 would add a new right that reads: “The right to value definitions based on actual assessment practices, applicable provisions of the State Constitution, and the laws of this state, applied consistently in both assessment development by the property appraiser and assessment review by the value adjustment board and the courts of this state.”

Corporate Income Taxes

Corporate Income Tax “Piggy-Back” - Florida uses federal taxable income as the starting point for determining corporate income tax liability.  The Legislature passes an annual “piggyback” bill to conform to any changes in the federal tax code.  Sometimes the Legislature “de-couples” certain federal changes from Florida law and that it appears this will be the case in 2015.  The federal Tax Increase Prevention Act of 2014 extended two deductions: an increase in the first-year expensing deduction from $25,000 to $500,000 and a 50 percent bonus depreciation deduction.  It has been estimated that adopting these federal changes would cost Florida $180 million in FY 2015-16, with increases in revenue in subsequent years. HB 7009 and SB 7014 de-couple these changes.  The bills would require Florida taxpayers to add-back the federal deductions and then allow them to subtract from income one-seventh of these amounts in the next six years.  The existing federal deductions are treated this way.  The House bill has already been approved by the full House.  SB 7014 passed the Senate Fiscal Policy Committee this week and is on the Special Order Calendar for next week.

Corporate income tax bills that were not heard in committee this week:

Corporate Income Tax Reduction - HB 49 and SB 138 would increase the standard corporate income tax exemption from $50,000 to $75,000, as was recommended by Governor Scott.  The exemption was increased from $5,000 to $25,000 in 2011 and to $50,000 in 2013.  The Governor's proposal to increase it to $75,000 last year did not pass.  This higher exemption would eliminate corporate income taxes for 2,189 out of 9,934 taxpayers (22.0 percent), and save $18.7 million annually.  Since it will apply to tax years beginning on or after January 1, 2016, the FY 2015-16 impact will be only $7.6 million. 
SB 138 has passed two committees and is now in its last committee of reference – Appropriations.  This was not part of the House tax package announced this week.

Water’s Edge Unitary Tax – HB 1221 would create a water’s edge unitary corporate income tax scheme for Florida.  The bill would also create a Joint Legislative Sales & Use Tax Review Committee to examine exemptions and exclusions for possible repeal or modification.  This bill has not yet been referred to a committee and has no Senate companion.

Community Contribution Tax Credit Program - HB 311 and SB 302 would delay the expiration of the program for 9 years, until June 30, 2025. Under this program, businesses that have made contributions to eligible projects (mostly homeownership opportunities for low-income people) may receive tax credits, equal to 50 percent of the contribution, which can be taken against sales and use taxes, corporate income taxes, and insurance premium taxes.   Total credits are limited to $21.9 annually.   HB 311 has passed the Economic Development & Tourism Subcommittee last and is now in Finance & Tax.  SB 302 has passed the Transportation, Tourism, and Economic Development Committee, where it was amended to allow the money to also be used for homeownership opportunities for persons with special needs.

New Small Business Tax Credit – SB 128 and HB 517 would create a new corporate income tax credit for new small businesses.  If qualified, the business would receive a $1,500 credit for each employee, up to a maximum total credit of $21,000. 

Florida Student Internship Tax Credit – HB 427 would provide a corporate income tax credit for hiring a student as an intern within the student's field of study if the business has been in existence for at least 3 years.  The credit is limited to two students per business and the student must be employed as an intern for no more than 180 days.  The credit is equal to 50 percent of the student’s salary, with a limit of $3,600 per student.

Research and Development Tax Credit – SB 886 and HB 991 would increase the total amount of the current R&D tax credit that is available for all businesses from $9 million to $20 million annually.

Food Desert Tax Credit - SB 610 and HB 1107 provide an income tax credit for grocery businesses that sell nutrient-dense food items in areas designated as food deserts.  The credit would be equal to 20 percent of its annual sales.  SB 610 has passed one committee and is now in Finance and Tax.

Other Filed Tax Bills

Replace the Gas Tax – HB 7075, an omnibus transportation bill, contains a provision directing DOT, in cooperation with the Florida Transportation Commission (FTC), to study the impact of implementing a system that charges drivers based on Vehicle Miles Traveled (VMT) as an alternative, sustainable source for transportation funding.  This week, the Transportation & Economic Development Appropriations Subcommittee passed a committee substitute that removed this provision.

Entertainment Industry Financial Incentive Program – This program, which tries to bring film and television productions to the state by offering tax credits, has already received a lot of attention.  A report by the Office of Economic and Demographic Research, which reviewed the return on investment for many of the state’s economic development programs, said the entertainment program is not recouping the state’s investment (in terms of produced state revenue).  SB 1046 and HB 451 make numerous changes to the program, including creating an entertainment industry quick action fund (called the Production Action Fund in the House).  Both bills transfer and rename the Office of Film and Entertainment under the Department of Economic Opportunity as the Division of Film and Entertainment under Enterprise Florida.  They also create three separate incentive programs (a tax credit, a sales tax exemption and new quick action fund).  A production can only qualify for one program at a time.  Each application period starts new, the queue for incentives funding doesn't carry over.  The bills set a sunset date of July 1, 2021 and July 1, 2025 for the action fund.   SB 1046 has passed the Commerce and Tourism Committee.   HB 451 has passed the Economic Development and Tourism Committee.  Florida TaxWatch was asked by the sponsor to review the bill and we found it makes significant improvements to the current program, including changing from a first-come first-served process to one that prioritizes based on expected economic return.

Aviation Fuel – HB 595 and SB 722 would reduce the tax on aviation fuel from 6.9 cents per gallon to 5.4 cents per gallon.  This would be a revenue neutral change by eliminating a current provision that refunds all aviation fuel taxes paid by airlines that offer transcontinental jet service and that, after January 1, 1996, increased the air carrier’s Florida workforce by more than 1000 percent and by 250 or more full-time equivalent employee positions.  Proponents say this will level the playing field for all airlines operating in Florida. Both bills have cleared committees.   The House sponsor said he would offer an amendment later in the process to phase-out the tax credit to ease concerns that a total elimination would be have too large of an sudden effect on airline enjoying the credit.  SB 722 is on the Finance and Tax agenda next week (Monday).

Tax Swaps – Two bills have been filed that would be a significant change to the state’s tax system by replacing some taxes with others.  Both would also provide a large tax cut.  HB 317 replaces the corporate income tax, the sales tax on commercial leases and on manufacturing machinery and equipment with a 1 percent increase in the state sales tax.  This would result in a net $141 million tax reduction.  HB 319 would replace most school property tax (Required local effort and non-voted discretionary and capital outlay levies) with a 2.75 percent increase in the state sales tax.  This would result in a net $279 million tax cut.

Local Government Infrastructure – SB 850 and HB 923 would allow local governments to use impact fees to improve existing infrastructure, not just new infrastructure.  It would also authorize a local option documentary stamp tax of up to $1 per $100 to be used for the same thing.  A local government would be allowed to use only one of the options.  SB 850 was on the Community Affairs agenda for this week but it was temporarily postponed.

Cigarette Tax– SB 1386 would impose a new fee of 2.6 cents on each cigarette produced by a “non-settling” manufacturer.  These are manufacturers that are not part of the tobacco settlement agreements.

Education

Class Size Requirements - SB 818 and HB 665 revise the method for calculating the penalty for failure to comply with the class size requirements by performing the calculation at the school average instead of at the classroom level.  Florida TaxWatch released a report showing that adjusting the way class sizes are calculated will result in significant savings to Florida taxpayers, which can then be reinvested in measures that have been proven to improve student achievement.  Florida's class size limits have cost taxpayers more than $30 billion since voters approved them in a 2002 constitutional amendment. The report encourages the Legislature to adjust Florida's class size calculation to a school wide average. Applying the school level average calculation across all of Florida's public schools would allow school districts to comply with the class size reduction mandate, while reinvesting the savings into measures to improve teacher quality and student achievement. HB 665 passed the Education Committee last week and passed the full House todaySB 818 passed the Appropriations Subcommittee on Education last week.    

Testing, Student Assessments & Teacher Evaluations - SB 616 would reduce testing time in Florida schools, capping the time students spend on state and local tests at 5 percent of their school hours.  It would also eliminate some state-required local testing and allow districts to seek waivers to disregard the test results if they can show problems with the new system affected results.  The legislation would also reduce the reliance on test results in evaluating teacher performance from 50 percent to 33 percent of an evaluation. The bill also eliminates the 11th-grade language arts test (ELA) that Governor Scott halted with an executive order last month, as well as the Postsecondary Education Reading Test (PERT).  The Appropriations Committee passed the bill this week, amending it to provide that the results of this year’s Florida Standards Assessments would not be used to determine whether third-graders can be promoted to the fourth grade or high school students can graduate until an independent review of the exam is conducted.

HB 7069, like the Senate version, eliminates the ELA and PERT tests, reduces the reliance on student test performance in teacher evaluations.  It further prohibits final exams in for classes for which there is a statewide, standardized End Of Course assessment.  It also allows districts to set a school start date as early as Aug. 10, requires the state to develop a uniform assessment calendar and allows teaching assistants to administer tests.  The bill has been approved by the full House.  Amendments to suspend school grades for a year and to allow parents to request that their child take a paper test instead of an on-line one were defeated.  

Digital Classrooms – SB 7050 directs the Agency for State Technology (AST) to establish information technology architecture standards for purposes of implementing the state’s new digital classroom funding allocation by July 1, 2016.  AST must collaborate with the Department of Education (DOE) and the Department of Management Services to identify certain state contract procurement options for services that support such standards and to identify certain shared services available through the State Data Center to facilitate the implementation of school district digital classrooms plans.  AST must also do an annual assessment and provide planning assistance to address issues identified by the assessment.  This bill was approved as a PCB by the Senate Committee on Governmental Oversight and Accountability last week, including an amendment to appropriate $9.9 million to the Agency for State Technology.  A similar bill (SB 1264) passed the Education Pre-K – 12 Committee last week.

Reducing Educational Facility Costs - HB 181 and SB 448 aims to provide cost savings to school districts by allowing them to implement exceptions to the State Requirements for Educational Facilities – the public education building code.  These exceptions relate to the use of wood studs in interior nonload-bearing walls, paved walkways, roadways, driveways, and parking areas, covered walkways for relocatable buildings, and site lighting.

A school board must hold a workshop and then the resolution must pass by a supermajority vote at a public meeting.  The school board must conduct a cost-benefit analysis prepared according to a professionally accepted methodology that describes how each exception achieves cost savings, improves the efficient use of school district resources, and impacts the life-cycle costs and life span for the facility. The cost-benefit analysis must also demonstrate that implementation of the exception will not compromise student safety or the quality of student instruction.  HB 181 passed the Education Committee last week. SB 488 is on the Education Pre-K – 12 Committee agenda next week (Tuesday).

Charter Schools – HB 7037 aims to increase charter school accountability and increase student access.  It also changes some funding provisions.  It requires charter schools to begin submitting monthly financial statements upon approval of the charter contract, and clarifies that charter schools that earn two consecutive grades of “F” are automatically terminated.  It removes the limit on replication of high-performing charter schools if the school is created to serve high-need areas.  The bill also creates the Florida Institute for Charter School Innovation at the Florida State University to provide technical assistance, conduct research on policy and practice and provide opportunities for aspiring teachers to experience teaching in charter schools.  Last week, the House Education Appropriations Subcommittee unanimously approved the bill, with an amendment that earmarks $1 million annually for the institute.  Last week, the bill passed the Education Committee and it is now before the full House.

Economic Development

Action 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 544, HB 613, SB 1044 and HB 4035 would all make the exemption permanent. This is a long-standing recommendation of Florida TaxWatch.  The extension will not cost the state any money this year, but recurring savings are expected to be $142.5 million annually. Under SB 544 and HB 613, the exemption for cement mixer drums enacted last year would still expire on April 30, 2017.   HB 613 has passed the Economic Development and Tourism Committee.   SB 544 passed the Commerce and Tourism Committee this week and is on the Finance and Tax agenda next week (Monday).  This exemption is not part of the House tax cut package that was released this week.

Seaports – HB 7039, in addition to several provisions related to the organization and operation of the Florida Department of Transportation, increases the funding for the Florida Seaport and Economic Development (FSTED) Program from $15 million to $25 million per year. The bill passed the House Transportation & Economic Development Appropriations Subcommittee this week.  Two Senate bills (SB 1456 and SB 1554) also contain the seaport funding.  A committee substitute for SB 1554 passed the Transportation Committee last week.

Community Contribution Tax Credit Program - HB 311 and SB 302 would delay the expiration of the program for 9 years, until June 30, 2025. Under this program, businesses that have made contributions to eligible projects (mostly homeownership opportunities for low-income people) may receive tax credits, equal to 50 percent of the contribution, which can be taken against sales and use taxes, corporate income taxes, and insurance premium taxes.   Total credits are limited to $21.9 annually.   SB 302 has cleared the Appropriations Subcommittee on Transportation, Tourism, and Economic Development and was amended to allow the money to also be used for homeownership opportunities for persons with special needs.  The extension of this program is included in the House tax cut package, which was announced this week.

No Action this Week – Florida TaxWatch Priorities

Enterprise Zones - There has been much discussion of Enterprise Zones this session, as the program is scheduled to sunset in December 2015.  Florida TaxWatch has testified at all the committee hearings, referencing our recent analysis of the program.  The report calls on the Legislature to revise and extend the state's Enterprise Zone program, designed to revitalize and redevelop distressed, blighted areas in Florida. 

There are a number of bills dealing with this issue. Last week, the House Economic Development and Tourism Subcommittee approved a proposed committee bill (HB 7067) that would replace the current Enterprise Zone Program with a Local Enterprise Zone Program and an Enterprise Zone Certification. The new program will require local government to exempt eligible businesses from several taxes and fees. The certification program would allow the Department of Economic Opportunity (DEO) to advertise the program to attract businesses. HB 903 and SB 1556 extend the Enterprise Zone program and eliminate the individual limits on sales tax refunds, as well as revise other economic development programs.  SB 392 would reauthorize the program with some changes, including a requirement that zones meet annual goals or be dissolved.  SB 1030 does not address Enterprise Zones directly, but essentially creates an alternative – the Community Creative Grant Program.  This would be a competitive process through which cities and counties could apply for grants to fund local economic development projects.  None of these bills have been heard.

Start-up and Second-stage CompaniesHB 7067 would also create the “Startup Florida Initiative”, which would encourage start-up and second-stage company growth. Florida TaxWatch recently released a report titled “Cultivating Florida’s Second-Stage Companies: Examining the Benefits of Expanding the Statewide Impact of the GrowFL Program,” that highlighted the benefits of second-stage companies, including the creation of 394,000 net new jobs in Florida from 2009 to 2013. This was approved as a PCB by the House Economic Development and Tourism Subcommittee last week.

Freight Mobility and Logistics - HB 257 and SB 956 define a freight logistics zone and allows a county, or two or more contiguous counties to designate one. Projects within freight logistics zones, which are consistent with the Department of Transportation’s Freight Mobility and Trade Plan, may be eligible for priority in state funding and certain incentive programs. HB 331 and SB 958 would direct a portion of motor vehicle fees, such as title fees, to be set aside for specified freight mobility & trade projects. HB 257 has been approved by the full House.  SB 956 has the Appropriations Subcommittee on Transportation, Tourism, and Economic Development.  Florida TaxWatch has researched this issue extensively.  

Other Tax Legislation - See the Taxation Section of this Legislative Update for information on many other tax bills that effect economic development.

No Action this Week – Other Economic Development Bills

Entertainment Industry Financial Incentive Program – This program, which tries to bring film and television productions to the state by offering tax credits, has already received a lot of attention.  A report by the Office of Economic and Demographic Research, which reviewed the return on investment for many of the state’s economic development programs, said the entertainment program is not recouping the state’s investment (in terms of produced state revenue).  SB 1046 and HB 451 make numerous changes to the program, including creating an entertainment industry quick action fund (called the Production Action Fund in the House).  Both bills transfer and rename the Office of Film and Entertainment under the Department of Economic Opportunity as the Division of Film and Entertainment under Enterprise Florida.  They also create three separate incentive programs (a tax credit, a sales tax exemption and new quick action fund).  A production can only qualify for one program at a time.  Each application period starts new, the queue for incentives funding doesn't carry over.  The bills set a sunset date of July 1, 2021 and July 1, 2025 for the action fund.   SB 1046 has passed the Commerce and Tourism Committee and HB 451 has passed the Economic Development and Tourism Committee.  Florida TaxWatch was asked by the sponsor to review the bill and we found it makes significant improvements to the current program, including changing from a first-come first-served process to one that prioritizes based on expected economic return.

Economic Development Programs - SB 1214 makes numerous reforms to several programs.  It standardizes the incentives application process, limits most incentive agreements to 10 years and requires capital investment to remain in the state for the duration of the contract.  It specifies approval of projects at various funding levels:

  • The Governor may approve projects requiring less than $2 million without legislative approval.
  • The Governor must give 10 days’ notice to the Legislative Budget Commission (LBC) for projects between $2 million and $7.5 million.
  • The Governor must wait on LBC approval before taking action on any projects requiring $7.5 million or more.
  • Projects of $5 million or greater with any waivers of program requirements require LBC approval.

It also makes additional changes to the Quick Action Closing (QAC) Fund and the Qualified Target Industry Business (QTI) Tax Refund.  The bill has passed the Commerce and Tourism Committee and the Appropriations Subcommittee on Transportation, Tourism, and Economic Development.

Qualified Television Revolving Loan Fund - HB 237 and SB 196 create a qualified television revolving loan fund - an “evergreen” fund privately managed under state oversight, which offers loans for qualified television content production throughout the state. The program would use state money and private funds raised by a third-party loan administrator. HB 237 passed the Economic Development & Tourism Subcommittee last week.

Small Business Financial Assistance - SB 292 and HB 797 would create the Veterans Employment Small Business Grant Program within the Department of Veterans’ Affairs.  SB 292 has been approved by the Appropriations Subcommittee on Transportation, Tourism, and Economic Development.

Incentives for Small Technology Companies – SB 1090 would authorize the provision of loans to small technology companies through the Microfinance Guarantee Program.  It would appropriate $50 million for these loans.

New Small Business Tax CreditSB 128 and HB 517 would create a new corporate income tax credit for new small businesses.  If qualified, the business would receive a $1,500 credit for each employee, up to a maximum total credit of $21,000.

Health & Aging

Action This Week

Healthcare Expansion – This week, the Senate Appropriations Committee unanimously approved HB 7044 that would help up to 1 million low-income Floridians acquire access to affordable healthcare.  The proposal is an alternative to the Medicaid expansion under the federal Affordable Care Act but, pending federal approval, would still allow Florida to draw down billions in federal funding.  The bill would create a health-insurance "marketplace," where low-income people would shop for plans. People with incomes up to 138 percent of the federal poverty level that do not qualify for Medicaid would be eligible.  These income limits are currently $16,000 a year for individuals and $33,000 for families of four.  Participants would pay monthly premiums ranging from $3 to $25 dollars and there is a requirement to be working or looking for work.  These provisions may be obstacles to federal approval.  The bigger obstacle is the refusal of the House to consider the plan.  This bill now goes to the floor.

ARNP/PA Scope of Practice - HB 335 would expand Baker Act powers to nurse practitioners with certain mental health certifications.  The measure allows a psychiatric nurse to discharge or order emergency treatment for a patient held under the Baker Act.  The bill has passed its committees and is now on second reading.  The Florida TaxWatch Center for Health and Aging has released reports detailing the benefits of expanding nurse and physician assistant scope of practice.  The Senate companion (SB 476) passed the Health Policy Committee this week.  A more comprehensive scope of practice bill (HB 547) passed the Health Innovation Subcommittee this week.   SB 614 would allow ARNPs and PAs to prescribe brand drugs under the prescription drug program.  It has passed the Health Policy Committee with an amendment that limits the prescribing of controlled substances in a pain-management clinic to physicians. It is on the Regulated Industries agenda next week (Tuesday).

 

No Action this Week

Behavioral Health – Earlier this session, Florida TaxWatch released an analysis of Florida’s Behavioral Health Managing Entity (BHME) system, through which the state delivers behavioral health services to uninsured Floridians. The report shows BHME is working well, despite decreasing funding.  It also offer recommendations to improve the system.  There are numerous bills filed that relate to behavioral health and many advance these concepts.

HB 79, SB 340 and SB 1462 create the Crisis Stabilization Services Utilization Database. DCF must develop, implement, and maintain standards under which a behavioral health managing entity must collect utilization data from public receiving facilities.  SB 1462 also authorizes counties to fund treatment based mental health courts and directs AHCA to submit a federal waiver or a Medicaid state plan amendment for the provision of health homes for individuals with chronic conditions, including severe mental illnesses or substance use disorders. The agency is also directed to apply to the federal government for a grant that creates improved access to community mental health services. It has the Children, Families and Elder Affairs Committee.  HB 79 is on second reading.  SB 340 has passed two committees and is in Appropriations.

SB 1340 and HB 1107 create the Substance Abuse Assistance Pilot Program to develop safe and cost efficient treatment alternatives.  DCF may contract with BHMEs or Medicaid managed care organizations to manage the program.  They also create a process for an adult to execute a mental health or substance abuse treatment advance directive to guide their treatment should they become incapacitated.  SB 1340 has passed the Children, Families and Elder Affairs Committee.

HB 1277 would establish the Priority Care Pilot Project to provide access to care for priority target adults with serious mental illness and a history that indicates they could pose a threat to public safety.  It also establishes service requirements for Assisted Outpatient Treatment (AOT), requiring DCF to fund BHMEs “at sufficient levels” for their management of AOT.

SB 1476: creates a mental health treatment bed registry website that collects and publishes utilization data regarding available treatment beds in real-time.  The data would be accessible by facility administrators, service providers, health care providers, and county law enforcement. 

HB 1005: Creates the Behavioral Health Task Force to, among other duties, evaluate whether current funding for BHMEs is adequate.   It also requires that DCF create a new SAMH data collection system with the goal of reducing system fragmentation and improving coordination of care.  It also creates a $450,000 student loan forgiveness program for personnel who work at community behavioral health centers.

SB 1338 is the “Excellence in Behavioral Health Act”.  It creates the Behavioral Health Task Force within DCF.  It also authorizes counties to fund treatment-based mental health court programs and requires the Agency for Health Care Administration to implement a prospective payment methodology for reimbursement rates at community behavioral health centers.  The bill appropriated $110 million to increase Medicaid reimbursement rates for behavioral health services providers to the actual cost of providing such services.

Telehealth - Telehealth 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.  Some healthcare providers are beginning to use telehealth and the bills (HB 545 and SB 478) would put guidelines in state law. A CS for SB 478 by the Health Policy Committee completely amended the first version of the bill, changing the subject of and references in the bill from “telemedicine” to “telehealth,” specifying the practitioners who may provide telehealth, proving telehealth practice standards, and specifically removing the requirement for “telemedicine services to be covered by specified Medicaid programs.” The amendment was further amended to prohibit the prescription of eyeglasses, contact lenses, and any other optical device. Legislation filed last year, despite support for the concept, failed due to disagreements over regulation. The new House and Senate bills differ, but the sponsors have expressed optimism a compromise can be reached. Telehealth is a priority of the Florida TaxWatch Center for Health and Aging (see report).  HB 545 passed the Health Quality Subcommittee last week.   SB 478 is now in the Appropriations Subcommittee on Health and Human Services.

Medical Tourism - SB 86 and HB 945 aim to establish Florida as a worldwide destination for medical tourism.  Enterprise Florida, in collaboration with the Department of Economic Opportunity, is directed to market Florida as a health care destination.  The Division of Tourism Marketing would be required to include the promotion of medical tourism in a four-year marketing plan, which would specifically promote national and international awareness of healthcare specialties and expertise, and showcase key healthcare providers. An annual minimum of $3.5 million would be appropriated from state general revenue to Florida Tourism Industry Marketing for developing and implementing medical tourism marketing. The bill also creates a $1.5 million matching grant program to encourage medical tourism through local and regional economic development organizations. While similar legislation failed last session, the budget provided $5 million to Visit Florida to develop a medical tourism marketing plan and to provide medical tourism matching grants.  See Florida TaxWatch report on Medical Tourism.

Immigrant Access to KidCare—SB 294 and HB 829 would do away with a five-year waiting period for immigrant children to be eligible for Medicaid and the Children’s Health Insurance Program (CHIP).  The bill covers “lawfully residing” children and does not extend to undocumented immigrants. This expansion is expected to cost the state $4.8 million annually. SB 294 has cleared its second committee stop.

Adoptions - SB 320 and HB 7013 would offer incentives to state employees who adopt children in Florida's foster-care system.  They would provide a one-time cash payment of $5,000 per child to state employees and $10,000 per child for those who adopt children with special needs.  The bills would also award incentive payments to community-based care organizations that are responsible for placing children in foster and adoptive homes. HB 7013 has passed the full House.  SB 320 is on second reading.  This legislation is a priority of the House Speaker and Senate President.

Smart Justice

Action this Week

Prison Reform - SB 7020 addresses prison reform, making a number of changes including requiring periodic safety inspections and audits, specialized training for dealing with mentally ill inmates and allowing staff to make confidential reports of inmate abuse or neglect.  The bill also creates an independent commission to provide oversight of the state’s prison system.  Florida TaxWatch has recommended such an oversight commission.  It also addresses another Florida TaxWatch recommendation (see Elderly Release below) with several provisions:

  • Requiring the Criminal Justice Estimating Conference to project prison admissions for elderly felony offenders;
  • Requiring standards of care criteria for the needs of inmates over age 50; 
  • Allowing an inmate’s family or lawyer to hire and pay for an independent medical evaluation; and
  • Expanding the existing conditional medical release program to include elderly and infirm inmates which would allow the Commission on Offender Review to consider the release of elderly and infirm inmates.

The Senate bill was amended during second reading this week and now awaits a final vote.  The House unveiled its prison reform bill this week, with the Criminal Justice Subcommittee approving a proposed committee bill (now SB 7131).   It contains several of the Senate provisions but leaves some others out, such as the independent oversight commission.

Civil Citations - HB 99 and SB 928 would require, rather than allow, that a law enforcement officer, upon making contact with a juvenile who admits having committed a misdemeanor, issue a civil citation when such a program has been established in the local area.  Florida TaxWatch research has shown the benefits of expanding civil citations.  HB 99 has been approved by the Criminal Justice Committee and is on the Justice Appropriations Subcommittee agenda next week (Monday).

Civil Citations - SB 378 would also expand civil citations by allowing law enforcement to issue a civil citation to youth who have committed a second or subsequent misdemeanor. (Civil citation is presently only available to youth who admit to committing a first-time misdemeanor.)  It also authorizes a law enforcement officer to issue a warning to a juvenile who admits having committed a misdemeanor or to inform the child’s parents. If the officer does not use one of these options, the officer may issue a civil citation or require participation in a similar diversion program.  The bill does provide that, in exceptional situations, an officer may arrest a first-time misdemeanor offender in the interest of protecting public safety.  A committee substitute for SB 378 was passed by the Criminal Justice Committee that makes the issuance of a civil citation discretionary. This week, the bill was approved by the Children, Families, and Elder Affairs Committee.

No Action this Week

Mental Health Services – SB 1452 and HB 7113 attempt to expand Florida’s mental health courts, veterans’ courts, drug courts, and juvenile delinquency pretrial intervention programs.  These programs provide pretrial or postadjudicatory alternatives for some offenders, allowing them to access programs and treatment options.  Some of the provisions include expanding participation in veterans’ court, allowing counties to create and fund treatment-based mental health court programs creating a Forensic Hospital Diversion Pilot Program, allowing judges to require qualifying veterans to participate in treatment programs as part of their probation or community control and allowing a juvenile offender with a mental illness to be admitted to a delinquency pretrial treatment program and allows a judge to dismiss charges against the juvenile upon the successful completion of the program.  Florida TaxWatch has recommend the expansion of these programs to help reduce recidivism.  The House bill was approved last week by the Judiciary Committee.

Elderly Release – HB 785 creates the Supervised Conditional Elderly Release Program for inmates 65 years of age or older who pose low risk to society. The bill allows specific elderly inmates to reduce their sentence by up to 50 percent if they meet certain criteria and receive a favorable determination from the Florida Commission on Offender Review. It also expands eligibility for Conditional Medical Release to include severely ill or disabled inmates that do not meet the current 180 day life expectancy requirement. A recent Florida TaxWatch report warns that as the average age of the prison population rises and the number of elderly prisoners multiplies, the cost of lengthy sentences and prisoner healthcare needs threaten a substantial rise in Florida’s Corrections budget.  The report offers options for reform.

Job Tax Credit - HB 121 and SB 356 would create a $1,000 corporate income tax credit for hiring a person who has been convicted of a felony and who remains continuously employed by the corporation for at least 1 year. The credit may be taken only once per new employee and is not available for violent offenders or sexual offenders or predators.

Education Gain-Time – HB 591 would increase the amount of incentive gain-time awarded to an inmate for completing a high school equivalency diploma or vocational certificate from 60 to 120 days.

Inmate ReentrySB 1384 would require the Department of Corrections to develop and administer a reentry program for nonviolent offenders, which is intended to divert nonviolent offenders from long periods of incarceration.  It also requires that assessments of vocational skills and future career education be provided to offenders.

Mandatory Minimum SentencingHB 881 and SB 1092 would allow a judge to impose a sentence less than the mandatory minimum sentence if the unique circumstances of the case indicate that the offender does not pose a threat to the public and the mandatory minimum sentence does not fulfill the goal of punishment and other sentencing criteria.

Pension Reform

Florida Retirement System Reform

Last week, House Speaker Steve Crisafulli paused the efforts of the House to pursue FRS reform this session. His announcement came on the heels of a recent actuarial study that looked at closing the defined benefit pension plan to new employees and placing them in the investment plan, as recommended by the Florida TaxWatch Center for Government Efficiency. The Speaker said “The results from the most recent study of the very same bill changed from several billions of dollars in savings to millions of dollars in costs.  Given the unexpected and puzzling report, we believe it is important to pause and understand what factors caused such a dramatic shift." The study has not yet been made publicly available.

While a bill closing the defined benefit plan to new employees was not filed, there are some bills proposing smaller changes to the FRS.

HB 565 and SB 1054 would create a 6-month period to allow local governments participating in FRS to reassess Senior Management and to request removal from the class of any such positions that it deems appropriate.  The bill allows for possible subsequent reviews and reclassifications every five years.  The bill could save FRS local government money by using the additional flexibility to reduce the number of positions classified as Senior Management.  HB 1054 passed the Community Affairs Committee this week.  HB 565 passed the State Affairs Committee this week and is now on second reading.

SB 7042 and HB 1249 would allow FRS retirees to come back to work for the state and participate only in the investment plan.  The bill is in response to a 2010 law designed to end double-dipping, which provided that when an employee returned, they could not renew their membership in FRS.  While critics say the bill could lead to double-dipping again, proponents say the current law disincentivizes workers from coming back to work for the state.  More than 11,000 employees have returned to state work since June 30, 2010.  They cannot join the FRS again. SB 7042 was approved as a proposed committee bill last week by the Governmental Oversight and Accountability Committee.

 

Local Pension Reform

SB 172 and HB 341 would change the distribution of insurance premium tax revenues that provides some funding for Florida’s municipal police and fire pension plans. The current system which mandates that revenue over a certain threshold be used for additional benefits is becoming unsustainable. The bills authorize deviation from the specified uses of premium tax revenues, by mutual consent of collective bargaining representatives or majority consent of plan members. HB 341 was significantly changed from the Senate proposal, removing the increased benefit accrual rate requirement, and has passed the Government Operations Subcommittee. SB 172 passed Fiscal Policy this week and is now on second reading. 

HB 1279, strongly supported by Florida TaxWatch, passed the House Government Operations Committee last week in a PCB that removed many of its good provisions. The remaining bill only changes the makeup of local pension boards to ensure the majority of members are citizens who are not fund beneficiaries and are appointed by the governing body.  Plans funded under 75% must, every 3 years, conduct an internal audit of the plan's management and accounting practices and investments. The bill is now in Finance and Tax.

SB 242 and HB 1309 would require local government pension plans to use mortality table methodologies consistent with the methodologies by the Florida Retirement System (FRS). In most instances, the mortality tables used will recognize longer lifetimes for annuitants and result in higher annual contributions being required to be paid into the pension funds in the near term.  SB 242 is in its last committee – Appropriations.  HB 1309 has passed the Government Operations Subcommittee and is now in Appropriations. 

Cost Savings

A number of bills have been filed that are related to current and past recommendations of the Florida TaxWatch Center for Government Efficiency.

Action this Week

Pension Reform 

Last week, House Speaker Steve Crisafulli paused the efforts of the House to pursue FRS reform this session, said that such reform was dead.  His announcement came on the heels of a recent actuarial study that looked at closing the defined benefit pension plan to new employees and placing them in the investment plan. The Speaker said “The results from the most recent study of the very same bill changed from several billions of dollars in savings to millions of dollars in costs.  Given the unexpected and puzzling report, we believe it is important to pause and understand what factors caused such a dramatic shift." The study is not yet publicly available.

HB 565 and SB 1054 would create a 6-month period to allow local governments participating in FRS to reassess Senior Management and to request removal from the class of any such positions that it deems appropriate.  The bill allows for possible subsequent reviews and reclassifications every five years.  The bill could save FRS local government money by using the additional flexibility to reduce the number of positions classified as Senior Management.  HB 1054 passed the Community Affairs Committee this week.  HB 565 passed the State Affairs Committee this week and is now on second reading.

ARNP/PA Scope of Practice

HB 335 would expand Baker Act powers to nurse practitioners with certain mental health certifications.  The measure allows a psychiatric nurse to discharge or order emergency treatment for a patient held under the Baker Act.  The bill has passed its committees and is now on second reading.  The Florida TaxWatch Center for Health and Aging has released reports detailing the benefits of expanding nurse and physician assistant scope of practice.  The Senate companion (SB 476) passed the Health Policy Committee this week.  A more comprehensive scope of practice bill (HB 547) passed the Health Innovation Subcommittee this week.   SB 614 would allow ARNPs and PAs to prescribe brand drugs under the prescription drug program.  It has passed the Health Policy Committee with an amendment that limits the prescribing of controlled substances in a pain-management clinic to physicians. It is on the Regulated Industries agenda next week (Tuesday).

Class Size Requirements

SB 818 and HB 665 revise the method for calculating the penalty for failure to comply with the class size requirements by performing the calculation at the school average instead of at the classroom level.  Adjusting the way class sizes are calculated will result in significant savings to Florida taxpayers, which can then be reinvested in measures that have been proven to improve student achievement.  HB 665 is now on third reading.  SB 818 has passed the Appropriations Subcommittee on Education and is now in the Appropriations Committee.   

Criminal Justice

Corrections Review and Oversight - SB 7020 creates an independent commission to provide oversight of the state’s prison system.  The bill is on third reading. See the Criminal Justice portion of the update for more information on the omnibus bill.

Early ReleaseSB 7020 expands the existing conditional medical release program to include elderly and infirm inmates which would allow the Commission on Offender Review to consider the release of elderly and infirm inmates. The bill is on third reading. See the Criminal Justice portion of the update for more information on the omnibus bill.

Civil Citations - HB 99 and SB 928 would require, rather than allow, that a law enforcement officer, upon making contact with a juvenile who admits having committed a misdemeanor, issue a civil citation when such a program has been established in the local area.  Florida TaxWatch research has shown the benefits of expanding civil citations.  HB 99 has been approved by the Criminal Justice Committee and is on the Justice Appropriations Subcommittee agenda next week (Monday).

Civil Citations - SB 378 would also expand civil citations by allowing law enforcement to issue a civil citation to youth who have committed a second or subsequent misdemeanor. (Civil citation is presently only available to youth who admit to committing a first-time misdemeanor.)  It also authorizes a law enforcement officer to issue a warning to a juvenile who admits having committed a misdemeanor or to inform the child’s parents. If the officer does not use one of these options, the officer must issue a civil citation or require participation in a similar diversion program.  The bill does provide that, in exceptional situations, an officer may arrest a first-time misdemeanor offender in the interest of protecting public safety.  A committee substitute for SB 378 was passed by the Criminal Justice Committee that makes the issuance of a civil citation discretionary. This week, the bill was approved by the Children, Families, and Elder Affairs Committee.

Procurement 

SB 574 and HB 615 would allow school districts to use on-line procurement and electronic auctions.  Allows DOE to use electronic auctions to help districts procure buses. HB 615 passed the Government Operations Subcommittee this week.  SB 574 has passed one committee and is now in Education Appropriations. HB 113 and SB 778 could reduce costs through increased competition by prohibiting local ordinances and regulations from restricting a certified contractor’s competition for award of a contract for construction services based upon certain conditions when the state is paying 50% or more.  SB 778 passed the Appropriations Committee this week and is now on second reading.  HB 113 has passed three committees and is now in State Affairs.

Agency Inspectors General 

HB 371 and SB 1304 would provide additional employment qualifications for inspectors general & staff.  The bills expand the records and personnel accessible to inspector general during audit or investigation, authorizes inspectors general to administer oaths, and authorizes Chief Inspectors General to issue and enforce subpoenas. They also require personnel to comply with requests of inspectors general under penalty of loss of employment. Both bills passed committees this week.

No Action this Week

Collection of Sales Taxes on Remote Sales

Florida TaxWatch has been researching this issue and recommending solutions for more than 10 years.   Many bills have been filed to help address this over the years.  This year, SB 310 would bring Florida fully into the Streamlined Sales and Use Tax Agreement, which provides an opportunity for Florida to begin collecting money from a compact of sellers that voluntarily collect the tax.  HB 101 would have expanded nexus over remote retailers, requiring more retailers to collect tax on sales to Floridians.  HB 1265 is a memorial urging Congress to support the Marketplace Fairness Act.  These bills have not yet been heard.

Telehealth

CGE has recommended that the Legislature remove disincentives and barriers to use of telehealth services and provide a foundation for statewide expansion of telehealth. SB 478 and HB 545 sets practice standards and allows prescription through telehealth. Both bills have passed a committee.

Criminal Justice

Elderly Release - HB 785 creates the Supervised Conditional Elderly Release Program for inmates 65 years of age or older who pose low risk to society. The bill allows specific elderly inmates to reduce their sentence by up to 50 percent if they meet certain criteria and receive a favorable determination from the Florida Commission on Offender Review. It also expands eligibility for Conditional Medical Release to include severely ill or disabled inmates that do not meet the current 180 day life expectancy requirement. 

Mental Health Services – SB 1452 and HB 7113 attempt to expand Florida’s mental health courts, veterans’ courts, drug courts, and juvenile delinquency pretrial intervention programs.  These programs provide pretrial or postadjudicatory alternatives for some offenders, allowing them to access programs and treatment options.  Some of the provisions include expanding participation in veterans’ court, allowing counties to create and fund treatment-based mental health court programs creating a Forensic Hospital Diversion Pilot Program, allowing judges to require qualifying veterans to participate in treatment programs as part of their probation or community control and allowing a juvenile offender with a mental illness to be admitted to a delinquency pretrial treatment program and allows a judge to dismiss charges against the juvenile upon the successful completion of the program.  Florida TaxWatch has recommend the expansion of these programs to help reduce recidivism.  The House bill was approved last week by the Judiciary Committee.

Inmate ReentrySB 1384 would require the Department of Corrections to develop and administer a reentry program for nonviolent offenders, which is intended to divert nonviolent offenders from long periods of incarceration.  It also requires that assessments of vocational skills and future career education be provided to offenders.   HB 121 and SB 356 would create a $1,000 corporate income tax credit for hiring a person who has been convicted of a felony and who remains continuously employed by the corporation for at least 1 year. The credit may be taken only once per new employee and is not available for violent offenders or sexual offenders or predators. HB 591 would increase the amount of incentive gain-time awarded to an inmate for completing a high school equivalency diploma or vocational certificate from 60 to 120 days.

Mandatory Minimum Sentencing – HB 881 and SB 1092 would allow a judge to impose a sentence less than the mandatory minimum sentence if the unique circumstances of the case indicate that the offender does not pose a threat to the public and the mandatory minimum sentence does not fulfill the goal of punishment and other sentencing criteria.

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Media Inquiries:  Contact Morgan McCord by Email or Cell: 850.212.5052

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Contact Morgan McCord by Email
or Cell: 850.212.5052

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