Florida Government Finance Officers 2016 Legislative Review April 14, 2016 Davin Suggs Fiscal Policy Director Florida Association of Counties Amber Hughes Senior Legislative Advocate Florida League of Cities

Overview  Review of 2016 Legislative Session  2016 Legislative Highlights  SFY 2017 Budget  2017 Preparation and Outlook  Additional Resources & Information

Bills That Passed

DJJ Cost Sharing SB 1322 (Latvala, J.) Requiring certain counties that are not fiscally constrained to pay their annual percentage share of $42.5M to DJJ in FY16-17, with the state paying the remaining costs of detention; Beginning in FY17-18 & each year thereafter, requiring non-fiscally constrained counties to pay their annual percentage share of 50% of the “total shared detention costs” with the state paying the remaining costs of detention, including fiscally constrained & out of state youth; Requiring litigating counties to dismiss all lawsuits & all counties to execute waivers/releases for all claims arising before FY16-17 in order to only pay 50% of “total shared detention costs”; Provides that current pre – post billing model will remain in effect for any county that does not dismiss lawsuits; Estimated $12M savings to counties in FY16-17.

Renewable Energy Device Assessment Limitation CS/CS/HJR 193 (Rodrigues) Proposes an amendment to the Florida Constitution to allow the Legislature to exempt the assessed value of a renewable energy device from tangible personal property tax and the installation of those devices from determining the assessed value of real property, both residential and nonresidential. CS/HB 195 schedules a special election on August 30, 2016 for this proposed constitutional amendment. If approved by 60 percent of voters, the amendment would take effect January 1, 2018 and expire on December 31, 2037.

1. What is the percentage breakdown of the cost-sharing between the state and counties for juvenile detention cost? A.50/50 B.70/30 C.90/10 D.0/100

Public Record Exemption: Local Government Audit Report SB 7002 (Community Affairs) Reenacts a public records exemption for work papers related to local government audits by an internal auditor and investigations by an inspector general. As a result, the covered records will remain exempt from disclosure until the audit or investigation is complete or no longer active.

Tax Reduction Plan HB 7099 (Finance and Tax) Removes the expiration date on the sales tax exemption for purchases of machinery and equipment, revising the definitions regarding certain industrial machinery and equipment. The bill clarifies that for a limited time period, economic development property tax exemptions can be granted in areas that were designated enterprise zones as of December 30, The bill includes a three day back-to-school sales tax holiday from August 5th through August 7th. The bill allows certain coastal counties to use TDT revenues to fund law enforcement and emergency medical services on a reimbursement basis to address impacts related to increased tourism.

Value Adjustment Board CS/CS/HB 499 (Avila ) Specifies who is eligible to represent a property owner at a hearing. Requires the petition to be signed by the taxpayer or accompanied by written authorization to represent a taxpayer. Requires VABs to submit the certified assessment roll to the property appraiser by June 1. Reduces the interest owed from 12 % to the prime rate on unpaid taxes and excess tax that are refunded.

2. How long is the back-to-school sales tax holiday? A.2 days B.3 days C.10 days D.15 days

Deployed Servicemembers HB 7023 (Finance & Tax) Updates the list of designated military operations for which deployed servicemembers may qualify for the existing ad valorem tax exemption based on the reported submitted to the Legislature by the Department of Military Affairs. Extends the normal March 1 application deadline for the exemption application for qualifying deployments during the 2014 and 2015 calendar years to June 1, The bill also provide refund procedures for servicemembers who were on qualifying deployments for more than 365 days during the 2014 and 2015 calendar years. The bill first applies to the tax rolls for 2016

Exemption for Low-Income Seniors CS/HJR 275 (Avila) Proposed amendment to the Constitution that clarifies provisions of an existing amendment that was approved by the voters in The proposed amendments would clarify that the value limitation of $250,000 of just value of a homesteaded property is required at the time of the initial application. The amendment takes effect January 1, 2017, if approved by 60 percent of the voters and adopted by a city or county, but operates retroactively to January 1, 2013 for exemptions granted as of January 1, CS/HB 277 (Avila) implements CS/HJR 275

Exemption for Disabled First Responders CS/HB 1009 (Metz) Proposes an amendment to Constitution allow the legislature to grant a full or partial property tax exemption on homestead property to first responders that are totally and permanently disabled as a result of injuries sustained in the line of duty. Subject to the approval by 60 percent of the voters in the November 2016 general election, the proposed amendment will take effect on January 1, 2017.

Public-Private Partnerships CS/SB 124 (Evers) Amends the statutory framework that local governments must adhere to when engaging in P3s. Provides supplemental authority to local governments, thereby allowing cities to rely on Home Rule authority to enter into P3 agreements or follow the process in Florida statutes. Authorizes local governments to collect a fee, as determined by local ordinance, to cover the costs associated with reviewing unsolicited proposals.

Special Assessments on Agricultural Lands CS/HB 773 (Albritton) Prohibits cities and counties from levying special assessments for fire protection on lands that are classified as agricultural lands for assessment purposes unless the property contains a residential dwelling, or contains a nonresidential farm building having a just value that exceeds $10,000.

3. What just value must nonresidential farm building have for a fire special assessment to be levied? A.$5,000 B.$10,000 C.$25,000 D.$50,000

Bills That Died

Ad Valorem Assessments HB 1345 (Wood) Would have amended the definitions of “fair market value” and “just value” for the purposes of assessment of property for property taxes.

Recapture HJR 7015 (Finance & Tax) & SJR 1074 ( Gaetz, D.) Proposed an amendment to the Constitution that would have delegated authority to the Legislature to limit the growth of assessed value of properties. The growth rate of homestead properties would have been limited to the lesser of 3 percent, the inflation rate or the percent of change in the homestead property’s just (market) value if the change is greater than or equal to zero. The growth rate of certain non-homestead properties would have been limited to the lesser of 10 percent or the change in the non-homestead property’s just value if the change was greater than or equal to zero. The joint resolutions also allowed the Legislature to prohibit the assessed value of those properties from increasing if the just value decreases.

Reduced the state portion of the communications services tax (CST) rates by 2.0 percent, reducing the general state rate from 4.92 to 2.92 percent and the rate on direct-to-home satellite from 9.07 to 7.07 percent. Unlike legislation passed last year, there was no “hold- harmless” provision, so the bill would have had a negative recurring impact caused by the reduction in revenues the state shares with local governments. Communications Services Tax SB 256 (Hukill)

4. How many proposed Florida Constitutional amendments will voters have the opportunity to vote on in 2016? A.0 B.5 C.1 D.3

Maximum Millage Rates CS/CS/SB 1222 (Flores) Revised the method for computing the maximum millage for the purposes of adopting the millage for a city, county or certain special districts. Instead of using a rolled-back rate assuming the previous year’s maximum rate was levied, the formula would have used the adopted millage for the prior year, adjusted for change in per capita Florida personal income. The formula change would have reduced the millage rate than could be adopted by a simple majority vote for many cities.

Local Government Capital Recovery HB 7009 (Finance & Tax) Required a municipality or a county that met certain thresholds of delinquent designated revenues to seek bids from licensed collection agencies offering a one-time, upfront cash payment to the municipality in exchange for the right to collect all of the municipality’s delinquent designated revenues. A municipality or a county was not required to enter into a contractual relationship with any company that bids, and could have continued to collect delinquent designated revenues by any method allowed by law. The bill required the management letter for the annual financial audit to include a discussion of the current balance of delinquent designated revenues and collection efforts. The bill also required the city or county to forward all bids that it received in response to a procurement request issued pursuant to this section to the Department of Financial Services.

Local Tax Referenda CS/CS/HB 791 (Ingoglia) & CS/SB 1100 (Brandes) Prohibits a law enforcement agency from establishing a traffic citation quota. If a law enforcement agency receives more than 33 percent of the total revenues it incurs within the fiscal year from traffic citations, the agency must submit a report to the JLAC detailing its total revenue from traffic citations and its total expenses for law enforcement.

Sales Tax on Commercial Leases SB 116 (Hukill) & HB 247 (Fitzenhagen) Reduced the sales and use tax that is levied on the rental or license fees charged for real property from 6 percent to 5 percent.

Government Accountability CS/CS/HB 593 (Metz) & CS/CS/SB 686 (Gaetz, D.) Would have created the "Florida Anti-Corruption Act of 2016" amending various provisions relating to local government accountability, transparency and oversight. Would have required all elected municipal officers to file a full and public financial disclosure (Form 6), rather than a financial interest disclosure (Form 1). Governmental entities would have been required to create a lobbyist registration and reporting program. Would have imposed new requirements on cities and counties regarding posting of their budgets; establishing internal protocols to prevent and detect fraud, waste and abuse.

Firefighter Cancer Disability Presumption SB 7090 (Community Affairs) & HB 7139 (Finance & Tax) Would have established a cancer disability presumption for firefighters (HB 345 also applied to paramedics). Grandfathered in approximately 40,000 current local government firefighters from having to pass a physical examination. Would have resulted in significant increases in expenses for local governments for workers’ compensation and disability pension benefits.

FRS: Renewed Membership SB 7014 (GOAC) & HB 881 (Raulerson) Would have reestablished renewed membership in the Florida Retirement System. A retiree of the FRS pension plan, the FRS investment plan and the Senior Management Service Optional Annuity Program who was employed in a regularly established position with a covered employer on or after July 1, 2016, would have been a renewed member in the FRS.

5. Which disability presumption did not pass and is expected to be back next year? A.Cancer B.Stroke C.Heart Disease D.Zika Virus

FRS Renewed Membership/Death Benefits/Default to Investment Plan CS/HB 7107 (State Affairs) Was a comprehensive bill relating to the Florida Retirement System (FRS). Would have authorized renewed membership in the investment plan for retirees of the investment plan. Established new survivor benefits for members of the investment plan who are killed in the line of duty. Changed the default from the pension plan to the investment plan for members who did not affirmatively choose a plan.

Certificates of Public Convenience and Necessity for Life Support or Air Ambulance Services CS/CS/CS/HB 517 (Renner) would have provided that a governmental entity located in a county that has a minimum of three independent special fire control districts was not required to obtain a certificate of public convenience and necessity or any other authorization by that county to provide basic or advanced life support non- transport services. CS/CS/SB 742 (Hutson) would have required all counties to adopt or amend an ordinance to provide standards for the issuance of certificates of public convenience and necessity for basic or advanced life support services.

Red Light Cameras CS/SB 168 (Brandes) & HB 4027 (Artiles) Would have repealed existing law and preempted local government authority to install and use traffic infraction detectors to enforce specified provisions when a driver fails to stop at traffic signal.

Public Records & Attorney Fees HB 1021 (Steube) & CS/CS/CS/SB 1220 (Garcia) Would have allowed a judge to review the facts of a public records lawsuit and determine whether or not attorney fees should be awarded to a complainant in specific situations. Would have also required that complainants provide written notice to the agency’s custodian of records at least five business days before filing a civil action in order to be eligible to receive attorney fees in a public records lawsuit.

Appropriations Budget Comparison (in millions)GAAFinal$ Difference% Difference SFY 2016SFY 2017SFY 16 vs. SFY 17 Section 1. Education1,666900,0001,783,000, , % Section 2. Education21,258,396,70222,005,103,065746,706, % Section 3. Health and Human Services32,952,000,00034,298,935,6411,346,935, % Section 4. Criminal Justice and Corrections4,229,500,0004,39,602,000201,102, % Section 5. Natural Res./ Environmental/ Growth/ Trans.13,361,569,55414,563,828,1451,202,258, % Section 6. General Government4,411,095,9774,542,487,122131,391, % Section 7. Judicial Branch516,359,000521,700,0005,341, % Total Budget78,395,821,23782,154,655,9733,758,834, % *SFY 2017 Total does not account go Back of the bill vetoes

GAA FY

FRS Contribution Rates (HB 5005): Modifies employer contribution rates. Employer normal contribution rates for each membership class of FRS (Defined Benefit and Defined Investment) are amended as follows: ClassFY Normal RateFY Normal Rate Regular2.97%2.91% Special Risk11.35% Special Risk Administrative Support3.87%3.17% Elected Officers (legislators)6.63%6.48% Elected Officers (judges)11.68%11.39% Elected Officers (county officers)8.55%8.48% Senior Management4.38%4.32% DROP4.17%4.10% SFY 2016 FRS Rates

ClassFY UAL RateFY UAL Rate Regular 2.83%2.65% Special Risk 8.92%8.99% Special Risk Administrative Support 22.47%27.54% Elected Officers (legislators) 33.75%37.62% Elected Officers (judges) 23.30%22.62% Elected Officers (county officers) 32.30%32.09% Senior Management 15.67%15.41% DROP 7.10%7.12% To address unfunded actuarial liabilities (UAL) of the system, the bill amends the current 2016 employer contribution rates for each membership class of FRS as follows:

6. How much is the total state budget for the fiscal year? A.$65 billion B.$72 billion C.$82 billion D.$112 billion

2017 Outlook  Communication Services Tax & DBS  Property Taxes- Implementing bill  Sales Tax Exemption on Commercial Leases  Government Accountability Max Millage

Additional Resources & Information Associations Florida Association of Counties ( Florida League of Cities ( Florida School Boards Association ( State and Legislative My Florida ( Online Sunshine ( Office of Economic & Demographic Research ( News & Events Sayfie Review ( The News Service of Florida ( Florida Channel (

Questions and Contact Information Amber M. Hughes Sr. Legislative Advocate Florida League of Cities Davin J. Suggs Fiscal Policy Director Florida Association of Counties