Important Note: This “Weekly Brief” is a synopsis of the full report that is made available to AIF Members. The full report is much more comprehensive and detailed and covers additional issues important to the business community. If you are an AIF member and would like to view the full report, you can do so by going to the AIF “members only” website at fbnnet.com
With approximately two weeks to go in the 2007 session, legislators are working through the weekend negotiating the two most important issues of this year’s session – property tax reform and the budget. Conferences are currently taking place on both subjects. Most experts agree that consensus will be reached on the budget, but the jury is still out in respects to property tax reform. Senate Minority Leader Steven Geller (D-Hallandale Beach) has publicly stated that he is not certain whether both chambers will come to an agreement on this important issue in time for the end of session. The House and Senate each have their own philosophical idea of how to achieve savings. For more information on the House and Senate plans please see the “Property Tax Reform” section of this report in which we lay out the intricacies of both packages.
Week 7 was extremely busy for AIF and the business community. Committee meetings are coming to an end, as such, bills that still have multiple committee references are more than likely done for this year. The business community achieved a great victory on Wednesday with the defeat of the “Guns in the Workplace” bill. We have included video of AIF President & CEO, Barney Bishop’s testimony on this legislation so be sure to check it out.
Legal Reform
On Tuesday, April 17th the Senate Judiciary Committee approved SB 1558 Relating to Comparative Fault/Apportionment by Senator Jeremy Ring (D-Margate) by a narrow 6 – 5 vote. This terrible bill for the business community would do away with the Florida Supreme Court’s Fabre ruling, which allows juries to consider all entities in a lawsuit before apportioning fault. If SB 1558 were to become law, it would essentially undo the repeal of Joint and Several Liability and expose businesses to paying more than their fair share of fault in a lawsuit.
Although this was certainly a setback for the business community, SB 1558 still has two more committees of reference to go – the Senate Commerce Committee and the Senate Criminal and Civil Justice Appropriations Committee. We have no doubt that we will ultimately be successful in defeating this attempt at undermining the repeal of Joint & Several Liability. As of the writing of this report, the bill has not been placed on the agenda for the Tuesday, April 24th meeting of the Commerce Committee.
AIF opposes SB 1558 and its undoing of the “Fabre” decision. Fair distribution of fault cannot be achieved if a jury cannot consider the actions of all parties involved. We urge all AIF members to contact their legislators and let them know that this bill should not be heard and that there is no need to change existing law.
Guns in the Workplace
On Wednesday, April 18th the House Environment and Natural Resources Council overwhelmingly voted (10-4) against HB 1417 by Representative Dennis Baxley (R-Ocala). The bill is formally called the "Individual Personal Private Property Protection Act" however; the goal of the bill is to allow individuals to keep firearms stored in their cars at their places of employment.
AIF has opposed this bill for the past two years; primarily because of the limitations it places on the employment at will doctrine that Florida employers depend on for doing business.
The bill would restrict employers from creating or maintaining policies, which ban firearms from their premises. It would also prohibit an employer from conditioning employment on an individual's consent to search of their vehicle while parked on the employer's premises. The bill as drafted does not specify that its purpose is to promote transport and storage of firearms in employees' vehicles. Instead it refers to personal private property. Representative Bob Allen (R-Merritt Island) filed an amendment that would have made specific references only to firearms rather than vague references to private property. The Council, however, did not adopt this amendment.
AIF President and CEO - Barney Bishop's Testimony
AIF opposes legislation that prohibits businesses from enforcing or maintaining policies that ban guns in the workplace. Employers should be allowed to establish these types of policies and exert their rights as property owners. Maintain a safe work environment is paramount for the longevity of any employer in Florida. We were pleasantly surprised by the overwhelming margin by which the bill failed.
Property Insurance Reform
On Wednesday, April 18th the Senate Community Affairs Committee approved SB 1864 Relating to Hurricane Damage Mitigation by Senator Bill Posey (R-Rockledge) by a 7 to 1 vote. Senator Ronda Storms (R-Brandon) was the only dissenting vote on the bill. The bill makes several revisions to the “My Safe Florida Home” Program, which provides mitigation grants for homeowners to harden their homes in order to lessen the damage caused by hurricanes. The Senate bill is significantly different from its House companion, HB 7057, which has already passed the full House. The biggest difference between the two bills is the Senate bill provides grants that would be limited to 25 percent of the costs of the improvements, up to $2,500, rather than 50 percent grants up to $5,000.
AIF supports legislation aimed at strengthening, expanding, and fully funding Florida’s home hardening efforts. We are encouraged to see that many of AIF’s and its Florida Hurricane Crisis Coalition’s (FHCC) recommendations have found their way into both the House and Senate proposals. Mitigation is the surest way for the state to protect itself from the damaging effects of windstorm damage.
On Friday, April 20th the House Jobs & Entrepreneurship Council unanimously approved HB 1223 by Representative Alan Hays (R-Umatilla). The bill creates the “Citizens Property Insurance Corporation Liquidation Task Force” to analyze and compile data and to develop a report to the legislature setting forth the statutory and operational changes needed to reduce Citizens Insurance Company’s growth and to return it to its former role as a non-competitive residual market mechanism which provides insurance only when it’s not available otherwise in the private insurance market. Barney Bishop, AIF’s President & CEO, testified in support of the bill. Mr. Bishop pointed out that Florida businesses are now liable for 41% of Citizens’ deficits as a result of legislation passes in the Special Session. Floridians could be slapped with assessments ranging from $1,400 to $17,000 a year to bail out Citizens if the state has another hurricane season like it did in 2005 Mr. Bishop urged the legislature to take immediate steps to eliminate future Citizens’ deficits.
AIF supports Rep. Hays’ bill because it begins to develop strategies for curbing artificially suppressed insurance rates and the irresponsible expansion of Citizens Insurance Company, a government-administered insurance company that should be an insurer of last resort not the State’s primary provider of insurance coverage.
AIF has also learned that HB 1267 by Representative Julio Robaina (R-Miami) will be on the House Policy & Budget Council’s agenda on April 23rd. The bill lowers the threshold for Citizens’ eligibility. Prior to this year’s Special Session on Property Insurance Reform, an applicant was not eligible for Citizens coverage if they received a quote for coverage from a private insurer. The Special Session legislation, HB 1A, provides that a private insurer quote in which the proposed premium is greater than 25% does not disqualify an applicant from coverage through Citizens. HB 1267, lowers this threshold from 25% to 15%, thus, further making Citizens a competitor as opposed to a provider of last resort. In addition, HB 1A froze Citizens’ rates at the 2006 level through 2007. HB 1267 extends this moratorium on Citizens rate increases to January 1, 2009. Both of these provisions will shift additional exposure from the private sector to the state and further increases the likelihood of future deficits which businesses will be taxed to cover. AIF will be present to testify against the bill.
Property Tax Reform
THE SENATE PLAN:
On Tuesday, April 17th the Senate Finance & Tax committee approved the Senate property tax reform package. Four bills make up the package and include: millage tax roll back, tangible personal property tax exemptions, transparency for local governments, and portability.
SB 1020 by Senator Mike Haridopolos (R-Melbourne) was the first bill considered; it addresses the millage tax roll back. The bill includes a cap on the amount of ad valorem (property) taxes a local government can levy. To stabilize the ad valorem taxes levied by local governments there will be a freeze on the millage rate and then a process where the rate can increase using a per capita Florida Personal Income plus growth formula. If an increase beyond this millage rate is needed, the governing body can increase it with a 2/3 vote of its members.
The next bill was by Senator Jeff Atwater (R-North Palm Beach). It was a Senate Joint Resolution (SJR) which would amend the Florida Constitution if approved by the voters. SJR 3034 would create a $25,000 exemption for each tangible personal property return. This section is designed to help small businesses in the state by eliminating this tax that cost more in filing than the actual tax. Approximately 77% of taxpayers will be exempted. Those not exempted will save about $450 per return. The proposed constitutional amendment also allows limited portability of the “Save Our Homes” (SOH) assessment differential to a new homestead. Finally, it grants first time home buyers an additional $25,000 homestead exemption which will be offset as their SOH differential increase. SJR 3034 was unanimously passed.
SB 1022 by Senator Haridopolos was next. This bill deals with affordable housing and provides that certain affordable housing properties must be assessed on the basis of their actual rental income. The bill was unanimously approved by the Committee.
The final bill to be considered was also by Senator Atwater. SB 560 encompasses the Taxpayers Rights concept that the Senate had previously discussed. The first part of the bill deals with eminent domain and will give homestead property owners compensation for the expected future tax benefits of the SOH in an eminent domain taking. Next, the issue of “highest and best use” was addressed. It clarifies the definition of “highest and best use” and present several factors property appraisers must consider when arriving at just value or taxable value. The transparency issue is also in this bill and would require local governments to post revenues, expenditures and other information related to the Truth in Millage “TRIM” notices on its website so that citizens and businesses can easily see how tax payers money is being spent. There is also a section dealing with a study of the assessment appeal process. Currently tax payers find it very difficult to challenge the Value Adjustment Board (VAB). There was even an Auditor General report showing the flaws in the system. The study will be completed by next session so this issue can be addressed at that time. The Committee also unanimously approved this bill.
AIF is pleased to see that the Senate is not considering an increase to the state’s sales tax and we support many of the provisions outlined above including the $25,000 tangible property exemption for business, portability of the “Save our Homes” cap, and the transparency provisions that allow tax payers to know how their tax dollars are being spent.
THE HOUSE PLAN:
On Wednesday, April 18th the House of Representatives passed its version of property tax reform this afternoon. Three bills mainly comprise their package: HJR 7089, HB 7001, and HB 261. The first of these was HJR 7089 by the House Policy & Budget Council, a proposed Constitutional amendment that gives counties the local option of putting to referendum the repeal of property taxes in exchange for a 2.5% increase in sales tax. The debate on this issue was framed as follows – members of the majority party described the measure as the most dramatic tax cut in the history of Florida; those in the Democratic Party debated against the proposed Constitutional amendment by focusing on the potential sales tax increase and calling it the largest tax increase in the history of Florida. In the end the measure passed on a 78-40 vote.
HB 7001 by the House Government Efficiency & Accountability Council establishes a property tax rollback to 2000-2001 levels and caps future growth for local governments. This proposal would cut property taxes by 19 percent on average and it would represent approximately $6.3 billion dollars in savings. During debate, Representative Robert Schenck (R-Springhill) described the rollback as a “return to normalcy.” The bill passed by a unanimous (118-0) margin.
Finally, the house passed (117-1) HB 261 Relating to Just Valuation by Representative Carlos Lopez-Cantera (R-Miami). The bill changes the method used by property appraisers in deriving the just valuation of a property. In addition, it creates stricter criteria for the "highest and best use" standard used by property appraisers. Specifically, it explicitly requires consideration of any zoning or permitting requirements, physical deterioration, functionality, and costs of removal of tangible personal property in appraisal to determine an accurate value of "highest and best use." It helps businesses by requiring property appraisers to consider how much income a property generates in order to determine the value of a property.
All three bills were sent to the Senate for consideration.
AIF is opposed to the idea of sales tax increase as a way to offset revenue raised by property taxes. Florida’s economy is vibrant and our state’s unemployment level is among the lowest in the country. An increase in sales tax could potentially disrupt the current state of Florida’s economy. We do however, support the provisions found in HB 261. Changes to the way property is appraised in this state are needed in order for businesses and homeowners to be fairly assessed.
On Thursday, April 19th the full Senate considered their property tax reform package. As was described previously, four bills make up the Senate’s proposal. All of these bills were rolled over to Third Reading. When this happens the bills usually will be considered for a final vote the next time the Senate is in Session. However, on Thursday, the Senate decide take up the House property tax proposals that had been passed the day before and substitute their bills. The bills were then sent back to the House.
Late that afternoon the House took up the Senate messages, which included the four property tax reform bills that had been substituted with the Senate language. On motions by Representative Anitere Flores (R-Miami), the House refused to concur with the Senate and agreed to go to conference with Senate on these proposals.
The Senate has appointed the following Senators to the property tax reform conference committee:
On Friday, April 20th the House Policy & Budget Council unanimously approved proposed committee bills (PCBs) PBC 9 Relating to Assessment of Homestead and PBC 10 Relating to a Special Election. PBC 9 is a proposed constitutional amendment that would provide for portability of the “Save our Homes” (SOH) property tax cap. It would allow homestead property owners to take their SOH savings with them when they move. Currently homeowners lose their SOH once they move from their original homestead, leading many Floridians to feel “locked-in” because of fear of having to pay more in property taxes. This PCB is the House’s answer to the Senate’s property tax plan which already includes the concept of portability.
PBC 10 would establish a special election for the adoption of PBC 9. This would allow Floridians to take advantage of the benefits of portability right away without having to wait until the next general election, which is scheduled for November of 2008.
AIF supports portability as a way to help those Floridians who would like to move to a smaller or larger home, but are afraid to lose their SOH savings. Allowing for portability could also spur Florida’s housing market, which has been losing steam in recent years due to increases in property insurance and property tax rates.
Workforce Housing
On Thursday, April 19th the Senate Finance and Tax Committee unanimously approved SB 780 Relating to Affordable Housing by Senator Rudy Garcia (R-Miami). The bill requires certain counties to adopt a plan for ensuring workforce housing by a certain date, creates an expedited amendment process for certain comprehensive plan amendments, and creates an exception to restrictions on the number of plan amendments which can be adopted annually. A tax deferral program on property taxes for affordable housing rental properties is created by the bill. The bill was amended at a previous committee stop and now contains provisions that tie state affordable housing grants to the successful development of specific affordable housing plans by counties where the disparity between median income and median cost of housing is greater than $150,000 dollars.
AIF supports legislation that provides incentives for local governments and developers to build new workforce housing projects. Employers in Florida must be able to attract a stable and dependable workforce. This can only be accomplished if employees can find affordable homes close to the jobsite. In addition, local governments must be held accountable so that the dollars they receive from the state are well spent.
Health Care
On Wednesday, April 18th the House of Representatives passed HB 1401 Relating to Health Flex Plans by Representative Jimmy Patronis (R-Panama City) on a 116-2 vote. HB 1401 is idea # 88 of the Speaker’s 100 Ideas for Florida and it expands health flex plan eligibility from 200 to 250 percent of the federal poverty level (the current federal poverty level is $20,650), thereby increasing the number of people who can become eligible for these types of plans. The bill also permits health flex plans to access the employee group market, in certain circumstances. An amendment was adopted during a previous committee meeting that provides for an appropriation of $250,000 in non-recurring general revenue to the Agency for Workforce Innovation (AWI) to award Small business Health Insurance Plan Grants to eligible businesses. HB 1401 will now be sent to the Senate for consideration.
AIF supports the market-based solutions to the problem of Florida’s uninsured found in HB 1401. According to a study by the Agency for Healthcare Administration (AHCA), approximately 19% of all Floridians do not have health insurance. These individuals typically rely on emergency rooms for their primary care. Unfortunately, this kind of care is the most expensive option. Expanding access for low-income employees to health flex plans is sound public policy.
Property Tax Exemptions for Renewable Energy Source Devices
Sales Tax Exemptions for Biofuel
Energy-Efficient Motor Vehicle Sales Tax Refund Program
Renewable Energy Technologies Investment Tax Credit
Florida Renewable Energy Production Credit
“Green Building” – Energy Conservation and Sustainable Building Act
Guaranteed Energy Performance Savings Contracting
Energy Efficiency and Conversation Month and Energy-Efficient Products Sales Tax Holiday
Solar Energy System Incentives Program
Renewable Energy Technologies Grants Program and Farm-to-Fuel Grants Program
Greenhouse Gas Inventories
Power Plant Siting Act and Transmission Line Siting Act
The creation of a Farm-to-Fuel Advisory Council
Biofuel Retail Sales Incentive Program and Florida Biofuel Production Inventive Program
Florida Building Commission/Energy Codes
Biodiesel Fuel for State-Owned Vehicles
Biodiesel Fuel for School District Transportation
In addition, the bill appropriates $85.6 Million for the various programs, positions and incentives created by the bill. The bill was presented by House Energy Committee Chairman Bob Allen who proudly stated that this legislation was the byproduct of over four months of work. Chairman Allen believes that the House has “set a good template for the state’s energy policy and that the bill builds on the good work of last year’s legislation, SB 888 – the first comprehensive energy bill.”
AIF supports many of the provisions in this comprehensive energy bill, especially the provisions that offer great incentives for the development of alternative energy sources. Florida is the 3rd largest consumer of energy in the country, as such we should look for ways to partner with the energy industry so that Florida’s businesses and consumers have access to reliable and affordable energy.
Workers Compensation
On Tuesday, April 17th SB 746 Relating to Workers’ Compensation/First Responders by Senator JD Alexander (R-Lake Wales) was unanimously approved by the Senate General Government Appropriations Committee, its last committee of reference. AIF has voiced objections to this bill for fear that the special workers’ compensation benefits it provides for First Responders would erode the 2003 workers’ compensation insurance reforms championed by AIF.
The sponsor has made changes to the bill in an effort to accommodate AIF’s concerns and today sponsored an amendment adopted by the committee, which removed the bill’s claimant attorney compensation provisions which was AIF’s greatest concern with the bill. AIF led the effort in 2003 to change how workers’ compensation plaintiff’s attorneys are compensated. This change has resulted in substantial savings to employers in their cost of workers’ compensation insurance – almost a 40 percent reduction.
SB 746 is now ready to be considered on the floor of the Senate for final consideration.
AIF applauds Senator Alexander’s continued effort to work with the business community on avoiding any negative impact on the savings achieved thanks to the workers’ compensation reforms of 2003.
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