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Top Stories from April 21

April 21, 2009

Offshore Drilling

Today, the House Policy Council passed (17-7) HB 1219 Relating to Environmental Control by Rep. Charles Van Zant (R-Palatka) after adopting a strike-everything amendment by Rep. Dean Cannon (R-Winter Park).  Originally, the bill directed the Florida Department of Environmental Protection (DEP) to develop an expedited plan, including legislative recommendations, to implement offshore oil and natural gas drilling programs in Florida.  Rep. Cannon’s amendment provides for an innovative process by which the state of Florida can begin the process of considering proposals for offshore drilling in Florida waters.  The proposal would not immediately trigger energy exploration in state waters; instead it would empower the Governor and Florida Cabinet to consider a process for reviewing, approving or rejecting proposals for exploration and production of oil and natural gas in Florida’s waters.

Furthermore, the amendment by Rep. Cannon would replace the current ban on drilling in Florida waters with a plan, which would allow the governor and Florida Cabinet to charge $1 million per application to explore state-controlled waters that stretch between 3 and 10 miles offshore.  Additionally, if a bid was accepted by the Cabinet, the state would require a $500 million bond before any drilling could begin and one-eight of any royalties from new production of oil or natural gas.

Barney Bishop, AIF’s President & CEO, led a presentation of industry experts on the issue.  AIF was the first business association in Florida to endorse offshore exploration and production of oil and natural gas in Florida waters.  During his testimony, Bishop stated that the “potential for significant and new public revenues from oil and gas were immense.”  In addition, he reminded committee members that the current technology would allow for environmentally safe and sound exploration and production.  Economist Hank Fishkind also presented before the committee and stated that “opening up Florida waters to the industry could generate $31 billion in royalties to the state over the next 20 years, and spawn an industry that would create 17,000 to 20,000 jobs.”

During debate, Rep. Rick Kriseman (D-St. Petersburg) called a “point of order” on the amendment arguing that it was not germane to the original intent of Rep. Van Zant’s bill.  Rules Chairman Bill Galvano (R-Bradenton) ruled that the point was not well taken and the amendment was allowed to be voted on.

HB 1219 will now be considered on the floor of the House of Representatives.

AIF has been a long-time supporter of offshore drilling as a way to reduce our dependence on foreign sources of oil and provide for affordable and reliable energy for the thousands of businesses and citizens of Florida.  This new proposal begins the conversation on how Florida can reap the benefits of environmentally sound exploration and production of oil and natural gas.  We commend Rep. Dean Cannon for bringing forward this bold initiative and urge all legislators to vote in favor of this proposal.

Unemployment Compensation

Today, the Senate Ways & Means Committee unanimously passed SB 810 by Sen. Rudy Garcia (R-Hialeah) revising Florida's unemployment tax structure. This legislation addresses the looming insolvency of Florida's unemployment compensation trust fund. With the addition of an amendment today, the bill now provides the following four measures through which employers' unemployment compensation tax obligations will change:

  • Increasing the taxable wage base upon which unemployment taxes are calculated from $7,000 to $8,500;
  • Permanently increasing the Unemployment Compensation Trust Fund trigger thresholds from 3.7% to 4% and 4.7% to 5%; 
  • Reducing the period within which an employer may recoup its tax credits from 4 years to 3 years to better stabilize the fund; and
  • Extending the eligibility of current unemployment recipients through approximately $700 million in federal stimulus funds available from the federal government.

These measures will represent an increase in the average Florida employer's unemployment tax of approximately $35 per employee for small employers with a minimal experience rating. However, the measures are said to be needed to avoid imposition of a forced repayment program from the federal government that would likely result in loss of some or all employer unemployment compensation tax credits and an additional legislative assessment on all employers above the current tax level.

AIF supports the passage of this bill as the best means for Florida's employers to mitigate the increasing levels of unemployment our state is acing and ensure adequacy in funding of the system. We are committed to continuing to work with legislative and agency leaders to develop and implement the least expensive means of addressing the looming insolvency.