Florida's 2013 Legislative Session, early on, was marked by greater accord than in past years. The contributing factors: camaraderie between House and Senate leadership, the absence of party factions of former sessions, a rebounding economy producing a budget surplus, and the fact that lawmakers were not facing re-election. However, on Day 57, bipartisan goodwill eroded when House Democrats gridlocked floor debate by requiring each bill to be read in full, and jeopardized the passage of major legislation in retribution over the absence of an agreement to federally-fund health care for the poor.
This paramount issue divided the Republican House, Senate and Governor from day one: whether to accept or reject over $50 billion in federal funds during the next decade to cover a million uninsured Floridians as envisioned by the federal Patient Protection and Affordable Care Act (PPACA). A move by the House to reject Medicaid expansion outraged Democrats and countered Governor Rick Scott's dramatic decision to embrace federally-funded expansion after his earlier opposition. Instead, legislative leaders opted for private insurance plans with the House rejecting support from Washington and the Senate primarily choosing to utilize the federal dollars. An impasse remained until Session's end.
On other measures, Senate President Don Gaetz (R-Destin) and House Speaker Will Weatherford (R-Wesley Chapel) entered into an unprecedented mutually-agreed-upon Session agenda, dubbed the "Florida Work Plan". The legislature successfully passed joint priorities including higher education, ethics, campaign finance, and elections reform. Also in the last days, the Senate rejected one of the Speaker's priorities to revamp the state's pension system – another installment of building tensions.
The Governor's primary legislative agenda, business tax breaks for manufacturers and across-the-board teacher pay increases, was hotly debated and hung in the balance until late in the process. After an intense drive by the Governor, House and Senate leadership passed the tax break for three years while the Governor had asked for permanent status. And, while granting the requested raises for state teachers, legislators tied them to a performance structure – opposed by the Governor but acknowledged by him as sufficient to give most teachers an increase. The Chambers also differed with the Executive Office over the passage of increased limits on campaign contributions as contained in the campaign finance bill and a budget agreement to boost college tuition. The Governor signed the campaign finance and ethics reform packages on May 1 shortly after passage of his manufacturer tax cut, but his signature on other issues and members' budget projects remained uncertain.
Moreover, an unexpected priority arose and passed to ban internet cafés in Florida after an illegal gambling investigation of the industry prompted the resignation of Lt. Governor Jennifer Carroll. The Lt. Governor, in former years, had done consulting work for the primary target of the investigation.
And, an improving state economy, coupled with concurrence in a number of major spending policies, was reflected in smoother and earlier than normal negotiations on passage of the state's budget for Fiscal Year 2013-14.
LAWMAKERS PASS HISTORICALLY HIGH BUDGET AT $74.5 BILLION
Detailed information on the topics below can be accessed by clicking on the arrow to the left of each sub-heading.
- Session Opens with No Projected Budget Gap – First Time in Six Years
This year's budget writers were not plagued with the multibillion-dollar shortfalls and dramatic spending cuts that marked the Great Recession of previous years. A brighter economy gave a boost to tax collections, helping the House and Senate to agree on the only legislation they are legally required to pass before going home – the state budget.
In crafting this year's budget, economists projected $3.5 billion more in revenue for lawmakers to work with than last. Even taking into account likely policy decisions and budget increases, the state was said to have a surplus of $1.1 billion.
Chairman of the House Appropriations Committee, Rep. Seth McKeel (R-Lakeland) and Senate Appropriations Committee Chair, Sen. Joe Negron (R-Plant City) found that it was good to have a little money again but remained restrained as they crafted the spending plan for Fiscal Year 2013-14 – recognizing that economic factors could change.
The economic recovery slowly taking root in Florida made budgeting far easier, replacing long committee meetings filled with arguments over deep cuts with relatively brief meetings when even members who voted against the plans praised the broad outlines. Negative votes were cast by some House Democrats due to the absence of a plan to expand Medicaid under the federal Affordable Care Act. The Senate saw unanimous votes throughout.
Since the legislature has been adopting its Long-Range Financial Outlook, economists projected a budget gap starting in Fiscal Year 2008-09 and running through 2011-12. While it initially looked like there would be no budget gap for Fiscal Year 2012-13, one developed by the start of session.
This year, the original surplus estimated in the long-range forecast has, according to the state's economists with the Legislature's Economic & Demographic Research (EDR) Office, remained strong and continued to stabilize throughout the Session. EDR is required by the state Constitution to produce a three-year financial report annually which assists with budget forecasting.
In developing these numbers, economists had to balance opposing forces at work on Florida's tax revenues. On one hand, the state's slow-moving economic recovery seemed to be picking up steam. Two actions by the federal government -- the reversal of a payroll tax cut that expired during the "fiscal cliff" negotiations and a series of across-the-board spending cuts called the "sequester" -- threatened to slow that growth.
Amy Baker, Coordinator for EDR, said the federal moves were unlikely to completely undermine the state's recovery, but could cut into the improvement. "If it were not for the effects of the fiscal cliff that are just starting to hit and effects from the sequester, it would have been a very rosy outlook," Baker said. "We would have been adding even more money than we're adding ... but it was definitely dampened by what we think is ahead of us."
At the start of the budget process, lawmakers emphasized that they would be careful about spending, even though reports depicted the state being able to handle most of its expected budget needs without reductions for the first time in several years.
Governor/Senate/House Debate Spending Plans
- Overview: Governor's Recommended Budget
In late January, Governor Rick Scott released his recommended spending plan to the legislature – the largest in the state's history at $74.2 billion. The blueprint, dubbed the "Florida Families First" budget, represented an over $4 billion increase over this year's $69.9 billion budget and was aimed at enhancing education and fostering job growth. In defense, Scott called the budget the third lowest since 2000 on a per capita, inflation-adjusted basis.
The budget proposal featured a $1.2 billion boost for education, a pay increase for teachers, and an increase in funding for economic development incentives for enticing businesses to relocate or expand in the state -- advancing the Governor's job-creation agenda that has been a hallmark of his tenure in office. Scott, in part, proposed to pay for the proposals by cutting payments to health care providers, reducing the state workforce by over 3,000, sweeping cash from trust funds and utilizing leftover cash from the current fiscal year.
Scott, who is up for re-election next year, departed from the budget-cutting that marked his first two years in office, saying that the spending hike was helped, in part, by rising tax collections from a recovering economy – resulting in the first projected budget surplus in six years. Scott's budget recommendations were only a suggestion to lawmakers who scrutinized the proposals cautiously and with restraint before beginning the process of crafting the final budget adopted prior to the end of the Session and scheduled to take effect July 1.
Here are some of the highlights of Governor Scott's recommended budget:
- As a key priority, afforded teachers an across-the-board raise of $2,500 which would cost the state $480 million.
- Requested a $1.25 billion increase for K-12 education. Last year, the governor pushed for, and got, a $1 billion increase for education.
- Recommended a $393 million increase for the state's 12 universities and a $74.4 million increase in funding for the state college system. The University of Florida was singled out for a $15 million appropriation to help the school hire more faculty in an effort to reach top-ten status as a public university.
- Sought a $10.5 million increase to focus on school safety for a total of $74.9 million in the wake of the Sandy Hook Elementary School shootings in Newtown, Connecticut.
- Included no tuition increase for state university and college students.
Tax and Economic Incentive Issues
- As a main priority, eliminated the sales tax on manufacturing equipment, for a savings to these companies of $141 million. Currently, businesses can receive the exemption only if their production increased by at least 5 percent after the equipment purchase. Scott's proposal would remove the 5 percent beginning January 1, 2014, and cost the state approximately $115.3 million.
- Increased the corporate income tax exemption from $50,000 to $75,000 which would reportedly benefit over 2,000 businesses – about 70 percent of the state's corporations—and cost the state approximately $20 million a year. At the Governor's request, the legislature has incrementally increased the exemption over his tenure from $5,000 to $25,000 and then, this year, to $50,000.
- Requested over $200 million more in economic incentives – an increase from the current year's $111 million, aimed at luring businesses to and creating jobs in Florida. The request prompted lawmakers to ask for proof of job creation in his current economic development agenda.
- Financed the mandatory portions of the federal Affordable Care Act but did not include a recommendation on the state's option to expand Medicaid as a key component of the plan. At the time, Scott said there were too many unanswered questions about how the expansion would work. However, in late February, Scott announced his support of expansion for a three-year period.
- Included $116.1 million for the state's population that is currently eligible for Medicaid, but not enrolled. Total spending, under the plan would increase by $1.7 billion to $23.7 billion.
- Suggested budget cuts of $82 million, or 2 percent, in reimbursements to hospitals for Medicaid in-patient rates.
- Included an additional $36.3 million for Medicaid developmentally disabled care to those who are now on waiting lists.
- Provided $424 million, funding 2,400 slots, to reduce waiting lists for programs keeping frail seniors out of nursing homes.
- Eliminated chiropractic and podiatric services from the Medicaid program.
- Kept current spending levels for mental health and substance abuse prevention.
- Recommended spending $6 million specifically to ease the foreclosure backlog in the state's courts.
- Added $4.4 million to increase the number of judges and support staff throughout the system.
- Increased beach renourishment money by $15 million to $25 million.
- Doubled Everglades restoration money to $60 million.
- Provided $75 million to the state's land preservation program, Florida Forever. This included $50 million from the sale of surplus state land. Last year, he requested $15 million and, two years ago, vetoed Florida Forever money altogether.
- Included $135 million for petroleum tank cleanups.
- Recommended $6 million for springs protection.
- Requested a $10 million increase for clean-up of leaking petroleum tanks.
- Included a $917 million increase in the Department of Transportation budget with all the funding coming from the State Transportation Trust Fund as opposed to General Revenue.
- Provided $3.6 billion for highway construction, $288 million for port improvements, $160 million for rail projects, $287 million for bridge construction and repair, $766 million for land acquisition, and $525 million for road resurfacing.
- Provided correctional officers $1,000 bonuses and correctional administrators $500 bonuses, costing the state $21.2 million.
- Did not include privatization of any of the state's correctional facilities, but recommended privatizing 14 publicly-operated work release centers, which the Governor estimates will save $4.4 million. He would also have spent $7.6 million to require every inmate on work release to wear an electronic monitor.
- Provided performance-based bonuses to state employees. Workers with "satisfactory" evaluations would receive a $1,200 bonus – costing the state $167 million. Those with "commendable" or "outstanding" evaluations would receive bonuses of $2,500 and $5,000 respectively – costing the state an estimated $148 million. State workers have not had a pay raise since 2006.
Overview: Senate and House Recommended Budgets
In mid-April, the Florida House and Senate individually passed their own competing $74 billion spending proposals for Fiscal Year 2013-14 – with the Senate plan, SB 1500, at $74.3 billion and the House plan, HB 5001, at $74.4 billion. The proposed budgets joined the Governor's recommended $74.2 plan in hitting historic highs. The House and Senate plans added an additional $4 billion, or approximately 6 percent, in spending from the current year.
The House saw a 99-17 vote with 25 of 44 Democrats breaking with their party to join Republicans in the affirmative while the Senate voted unanimously to approve its blueprint. The vote was seen as a bi-partisan victory, although the negative House votes expressed discontent over the proposal's absence of the state's option to expand Medicaid coverage as part of the federal Patient Protection and Affordable Care Act (PPACA). The health care expansion issue was seen as the major contentious point between the two budgets.
The measures were drafts from which the final budget would be crafted through negotiations between the two chambers. Differences in the plans were not viewed as large enough to prevent agreement before the scheduled end of the Legislative Session. The brighter economic picture allowed budget writers to avoid the drastic spending cuts of previous years and opened the opportunity for the funding of local projects that were few and far between during the years of the Great Recession.
The House devoted about $2.6 billion in reserves, including $1.2 billion in general revenue. The Upper Chamber saved $2.9 billion, including $1.5 billion in general revenue. "Our budget recognizes the ongoing challenges associated with economic recovery as well as the uncertainty caused by instability in Washington," Senate President Don Gaetz (R-Niceville) said in a statement issued by his office. "Florida's fiscal situation is improving, but the tough times over the last few years taught us many lessons."
Health and Human Services
Both the House and Senate proposed budgets that increased funding for Health and Human Services programs with total spending at approximately $30 billion: The House at $31.3 billion and the Senate at $30.8 billion.
Neither the House nor Senate spending blueprints put forth a plan to include a federally-funded expansion of Medicaid to cover a broader swath of low-income Floridians under the federal Patient Protection and Affordable Care Act. Both the House and Senate rejected the expansion. By mid-session, the Senate chose instead to pursue two other possible proposals to pay for low-income Floridians to purchase private insurance – one of the plans relied on federal dollars which the Governor supported; the other plan relied on state money. The House issued a proposal of its own, rejecting federal support and using state money as well.
In addition, both the House and Senate spending plans provided their own formulas for changing how hospitals are paid for care under the current Medicaid system – a move to what is known as the "diagnosis related group" (DRG) system. Additional funding was provided in the House budget aimed at reducing the impact of implementation of the new system – an item not included in the Senate.
Business Tax Cuts and Economic Development Incentives
Neither the House nor Senate included in their initial spending plans two priorities of Governor Rick Scott, although both Chambers acknowledged that negotiation would be ongoing. These included an exemption for manufacturers paying a 6 percent sales tax on equipment purchases and an increase in the current corporate tax exemption, for a total cost of approximately $160 million.
At the time, Sen. Joe Negron (R-Palm City), Chair of the Senate Appropriations Committee, had offered a proposal to cut $225 million in motor vehicle fees that were raised in 2009, when the state was facing an enormous budget gap. The plan would yield about $225 million and would be paid for by eliminating a tax rebate for insurance companies. Senate leaders were said to prefer this approach to other tax cut plans, although they took nothing off the table for discussion during final negotiations. Tax cuts for the House were initially set at about $75 million and also agreed that further negotiation was possible.
Additionally, Governor Scott proposed $278 million in economic incentives as part of his job creation and economic development agenda. The House, however, proposed $73 million, with the Senate proposing $16.2 million. Visit Florida, which is charged with promoting state tourism, was funded in the House at $63.5 million and in the Senate at $54 million. The Governor had requested $75 million. Financing incentives for Space Florida were funded at $10 million by the House and as proposed by the Governor. The Senate added $1 million for the incentives. Governor Scott had originally proposed $36 million for "transformational economic development", but neither the House nor Senate picked up this item. Both chambers had been reviewing the effectiveness of business incentives and were calling for additional accountability on these awards. The imposition of more restrictions on business incentives was part of the budget negotiations.
The Senate allocated $60 million for Florida Forever, the state's land buying program. Of this, $50 million would come from the sale of state lands. In the House, Florida Forever was allocated $75 million and would also include $50 million from the sale of state lands. Governor Scott proposed $25 million for Florida Forever with $50 million from the sale of state lands.
Everglades cleanup was budgeted at $32 million in the House and $70 million in the Senate. The Governor requested $60 million that included $32 million for implementation of a federal cleanup program. On spending for petroleum tank cleanups, the House proposed $126 million while the Senate proposed $135 million. The Governor's request reflected the Senate dollars. For beach restoration, the House came in at $30.9 million while the Senate proposed $46.3 million – both above the Governor's request.
The $8.4 billion work program of the state's Department of Transportation was fully funded by both the House and Senate. The Governor had proposed $8.3 billion.
The House proposed a $1 billion increase in funding from the current year's budget for K-12 education. The Senate rose spending by $1.2 billion. The Governor earlier recommended a $1.2 billion increase. The Senate also met the Governor's proposal for an approximate $480 million for teacher pay raises (a $2,500 across-the-board increase), but wanted raises tied to teacher merit. The House included a total of $676 million for pay raises and encouraged school districts to tie the raises to student performance. The House boosted per-student funding by $395 with the Senate at a $373 increase.
Under the House budget proposal, higher education saw an approximate $4.6 billion increase as opposed to an approximate $6.4 billion increase in the Senate proposal. Both the House and Senate restored a $300 million cut made last year to state universities. The House included a 6 percent tuition increase which was not included in the Senate. It was expected that Governor Rick Scott would oppose the increase. The House added $42.5 million for "pre-eminent universities" for the University of Florida and Florida State University to improve their national rankings. The Senate added $30 million to this cause.
The Senate included a 3 percent across-the-board raise for state workers while the House originally included an average $1,400 raise at 3.3 percent. However, on the House Floor, this provision was amended to provide a recurring $1,000 increase with an available one-time $400 merit-based bonus. The Governor had earlier proposed a $1,200 bonus based on job performance. State workers have not received a raise in seven years.
- FINAL FY 2013-14 STATE BUDGET – THE NUMBERS
House and Senate budget negotiators struck a deal on the final spending plan for Fiscal Year 2013-14 with one extra day to spare. The $74.5 billion budget, $4.5 billion larger than last year, is the largest in Florida's history. It also is the product of more harmonious negotiations between the Chambers than those in past years. The Florida Constitution requires a 72-hour cooling-off period before lawmakers can vote on the budget, and the decisions were finalized well within the time period needed for a timely close of Session on May 3.
The main sticking points that lingered into final negotiations included raises for state employees; how to dole out teacher pay increases; conflicts over tuition increases for state universities and colleges; a complicated scheme for reimbursing hospitals under the Medicaid program for low-income Floridians; spending on Everglades restoration; and issues surrounding clean-up for petroleum tank contamination.
The agreement was a striking contrast to former years plagued by forced budget cuts and days when completing the budget in time for the Session's end forced tensions and late-night wrangling. Helping matters was the fact that, for the first time in six years, budget-writers were working with a surplus instead of a shortfall.
Highlights of the FY 2013-14 General Appropriations Act, as passed, include:
The 2013-14 General Appropriations Act increased K-12 public school funding by $1.2 billion, including a minimum of $480 million in salary increases for instructional personnel based on performance. The budget addresses the House and Senate shared priority of linking jobs to the realities of the economy by fully funding research university preeminence, performance funding for industry certifications at the high school level, and performance funding in our State College System and in the State University System for high demand programs.
STATE EMPLOYEES AND RETIREES FOCUS
The budget funds the 2013-14 unfunded actuarial liability (UAL) contribution for the Florida Retirement System. Only portions of the UAL were funded in 2012-13 and 2011-2012; no funding was provided in 2010-11.
State Employee Compensation and Benefits are increased by $213.2 million comprised of a state employee pay increase and merit based bonus, a tiered pay increase for state law enforcement and as well as a pay increase for the court system. The budget also funds the employer premium increase for state employee health insurance as well as funding for health insurance of certain Other Personal Services (OPS) employees.
PRIVATE SECTOR JOB CREATION / TARGETED ECONOMIC DEVELOPMENT INVESTMENT FOCUS
The budget invests in a number of economic development programs within the Department of Transportation and the Department of Economic Opportunity. The budget fully funds the Department of Transportation Work Program at $8.67 billion, including $3.6 billion in intrastate and arterial highway construction, $421 million in Public Transit Development Grants and $152 million in county transportation programs.
The budget invests $106.6 million in Florida's Economic Development Partners including Enterprise Florida at $18.1 million, VISIT FLORIDA at $63.5 million, and Space Florida at $19.5 million.
Back to School Sales Tax Holiday
The Conference Committee Amendment for SB 406, relating to economic development, provides for a three-day sales tax holiday beginning August 2, exempting certain clothing and shoes valued at $75 or less, school supplies valued at $15 or less, and personal computers for non-commercial use valued at $750 or less.
Economic Development Initiatives
The Conference Committee Amendment for SB 406, relating to economic development, provides for the following:
Oversight of Economic Development Incentives
- The bill creates a rotating, 3-year review schedule for state incentives and economic development programs to be evaluated by the Office of Economic and Demographic Research (EDR) and the Office of Program Policy Analysis and Government Accountability (OPPAGA).
- The bill directs that all applicants for an incentive be evaluated for "economic benefits" in the same manner, and streamlines the reports and reporting dates that must be submitted by agencies administering economic development programs. The Department of Economic Opportunity is directed to publish on its website project-specific information about economic development incentives provided to businesses.
Spring Training Franchise Retention
- The bill creates a sales tax distribution to local governments for the purpose of constructing or renovating Major League Baseball spring training facilities.
Qualified Target Industry and Qualified Defense and Space Contractor Tax Refunds
- The bill removes the individual company lifetime limit for both the Qualified Target Industry and Qualified Defense and Space Contractor tax refund programs.
Total Budget: $74.5 billion ($26.8 billion General Revenue [GR]; $47.7 billion Trust Fund [TF])
Total Reserves: $2.8 billion
- $1.4 billion Working Capital
- $214.5 million to repay Budget Stabilization Fund (third of five payments)
- $708.3 million Budget Stabilization Fund
- $499.3 million Lawton Chiles Endowment Fund
Total Reserves as a Percentage of General Revenue: 9.7%
State Employee Compensation and Benefits
First Pay Increase Since 2006
Total: $213.2 million ($136.8 million GR; $76.4 million TF)
- Effective October 1, 2013, $1,400 pay increase for all state and State University System employees earning $40,000 or less; $1,000 for all employees earning more than $40,000)
- State Employee Pay Increase and Merit Based Bonus – $132.2 million GR; $67.4 million TF ($600 bonus option for approximately 35% of the state workforce based on job performance)
- State Law Enforcement Tiered Pay Increase – $2.1 million GR; $8.2 million TF
- Court System Pay Increase – $2.5 million GR; $771K
State Employee Health Insurance – Total: $78.1 million ($51.5 million GR; $26.6 million TF)
- Funds Employer Premium Increase - $37.8 million GR; $16.1 million TF
- Provides Health Insurance for Certain OPS Employees – $13.7 million GR; $10.5 million TF
Florida Retirement System
Total: $202.2 million ($115.3 million GR; $86.9 million TF)
- Funds normal increase costs for the Florida Retirement System $255K GR; $255K TF
- Unfunded Actuarial Liability – $101.8 million GR; $80.2 million TF
- Increase to Health Insurance Subsidy Contribution for Retirees – $13.2 million GR; $6.5 million TF
Total: $18.5 billion ($14.2 billion GR; $4.3 billion TF)
Total Funding – Including Local Revenues: $28 billion ($18.4 billion state funds; $9.6 billion local)
Early Learning Services
Total: $1 billion ($557.1 million GR; $448.2 million TF)
- Voluntary Prekindergarten Program - $404.9 million GR
- School Readiness Program - $552.5 million ($137.0 million GR; $415.5 million TF)
- Partnership for School Readiness - $31.4 million ($7.9 million GR; $23.5 TF)
Public Schools/K12 Florida Education Finance Program (FEFP)
Total Funding: $18.3 billion ($10.5 billion state funds; $7.8 billion local)
- FEFP Increase is $1.1 billion or 6.12%
- FEFP Increase in Funds per FTE is $404 or 6.34%
- Enrollment Workload Increase – $70 million
- Instructional Personnel Salary Increase – $480 million
- Additional Funds for Florida Retirement System Adjustments – $296.9 million GR
- Sparsity Supplement Increase – $10 million
- High School Industry Certifications – $30 million
- Student Digital Initiatives – additional $18 million
- Teachers Lead Program – additional $13.4 million – $250 per teacher for supplies
Public Schools/K12 Non-FEFP
- Mentoring Programs – $15.8 million GR
- Student Digital Initiatives – $7.8 million GR
- School District Matching Grants – $4 million GR
- Safe Schools Programs – $1 million GR for statewide school security assessment
- School Wireless Connectivity/Bandwidth Access – $17 million GR
Total: $542.9 million ($319.2 million GR; $171 million TF; $52.7 million tuition/fees)
- Workforce Development – $349 million ($291.6 million GR, $57.4 million TF)
- Performance Funding for Industry Certifications – $5 million GR
- Funds for Creation and Expansion of Targeted Career and Technical Programs – $20 million GR
Florida College System
Total: $2.0 billion ($913.2 million GR; $204.9 million TF; $898.9 million tuition/fees)
- Equalization Funding – $33.3 million GR
- Florida Retirement System Adjustments – $27.7 million GR
- Performance Funding for Industry Certifications – $5 million GR
State University System
Total: $4.0 billion ($2 billion GR; $239.8 million TF; $1.8 billion tuition/fees)
- Return Universities to Prior Year Funding Levels – $300 million
- Florida Retirement System Adjustments – $71.9 million GR
- Performance Funding for High Demand Programs – $65 million GR
- University Research Preeminence – $30 million GR
Total: $116.4 million GR
- Florida Resident Access Grant – Student Award Increase – additional $13.8 million
- ABLE Grant – Student Award increase – additional $1 million
Student Financial Aid
Total: $467.1 million ($102.9 million GR, $364.2 million TF)
- Bright Futures – Student Award Level Increase (3%) – additional $9 million TF
- Need-based Financial Aid – additional $3.3 million
- Supplemental Veteran Educational Benefits – $2 million
- McKnight Doctorial Fellowships – additional $1 million
Health and Human Services
Total: $31,144.2 million ($7,836.8 million GR; $23,307.4 million TF); 33,483.25 FTE
- Nursing Home Care – 2% Increase – $235. Million ($54.3 million GR, $180.7 TF)
- Medicaid Price Level and Workload – $32.8 million GR; $933.4 million TF
- Increased Rates for Primary Care Practitioners— $677.7 million TF
- Increased Rates for Private Duty Nursing Services provided by Licensed Practical Nurses -- $9.4 million
- DRG's Transitional Funding – Hospital Reimbursement Adjustment – $36.6 million GR; $51.7 million TF
- Graduate Medical Education (GME) Statewide Medicaid Residency Program — (270 residents at $100,000/resident) — $33.1 million GR; $46.9 million TF
- Serve Additional Clients in the Home and Community Based Waiver for the Aged and Disabled – (1,682 slots at $11,712/slot) – $8.1 million GR; $11.6 million TF
- Federal Health Care Reform Eligible and Not Enrolled – (17,643 enrollees) – $7.2 million; $13.2 million TF
- Resolve Home/Community Based Services Waiver Current Year Deficit— $17 million GR; $23.2 million TF
- Serve Additional Clients through the Home/Community Based Services Waiver (approximately 1,000 clients) — $15 million GR; $21.3 million TF
- Increase Temporary Assistance for Needy Families Cash Assistance for Additional Caseload (additional 97,626 individuals) — $27.5 million GR
- Increase Community Based Mental Health and Substance Abuse Treatment Funding— $23.2 million GR; $9.2 million TF
- Increase Maintenance Adoption Subsidies Funding— $20.6 million GR; $8 million TF
- Resolve Temporary Assistance for Needy Families Cash Assistance Current Year Deficit— $17.5 million GR; $3.2 million TF
- Children's Community Mental Health/Substance Abuse Action Team Pilot Programs— $4.7 million GR; $2.1 million TF
- Increase Domestic Violence Centers Funding— $2 million GR; $1 million TF
- Increase Child Protective Investigations Funding— $4 million GR
- Homeless Programs Funding— $4.75 million GR
- Increase Healthy Families Program Funding— $3 million GR
- Safe Harbor Program to Address Juvenile Sexual Exploitation— $1.5 million TF
- Increase Funding and Provide for Equity – Community Based Care Agencies— $2.4 million GR; $9.4 million TF
- Restore Funding to Serve Clients on the Home and Community Based Waiver— (263 slots at $11,712/slot) $1.3 million GR; $1.8 million TF
- Serve Additional Clients in the Community Care for the Elderly Program—(121 slots at $6,181/slot) $ 3.75 million GR
- Increase Funding for Biomedical Research— $2.85 million GR - James and Esther King Biomedical Program; $5 million GR - Bankhead/Coley Cancer Research Program; $2.05 million GR - Moffitt Cancer Center; $2.05 million GR – Sylvester Cancer Center; $2.05 million GR - Shands Cancer Hospital; $3 million TF – Torrey Pines Institute; and $2.6 million TF - Sanford-Burnham Medical Research Institute
- Cancer Research Endowments— $3.3 million GR – Shands Hospital; $3.3 million GR - Moffitt Cancer Center; and $3.3 million GR - Sylvester Cancer Institute
- Maintenance and Repair of State Veterans' Nursing Homes — $2.6 million TF
Civil and Criminal Justice
Total: $4.27 billion ($3.52 billion GR; $754.3 million TF); 44,410.75 FTE
- Removes the Clerks of Court from the state budget process, as they were prior to 2009, but with additional budgetary oversight and accountability and sufficient revenues to support their operations.
- Restores the 2% salary reduction made in 2009 to the Supreme Court justices and state court judges.
Guardian Ad Litem
- Total: $34.5 million ($34.2 million GR; $320K TF); 590 FTE
- Volunteer enhancement to support first step in program's plan to serve all children in dependency – $3.8 million GR
- Enhanced services at Children's Advocacy Centers – $3.5 million GR
Transportation, Tourism and Economic Development
Total: $11.3 billion ($174.2 million GR; $11.1 billion TF); 13,648 FTE
- Florida Armory Revitalization Program (FARP) – $15.0 million GR
- National Guard Tuition Assistance – $3.5 million GR
Transportation Work Program – $8.67 billion TF
- Intrastate and Arterial Highway Construction – $3.6 billion TF
- Right-of-Way Land Acquisition – $725 million TF
- Seaport Development Grants – $243 million TF
- Rail Development Grants – $184 million TF
- Intermodal Development Grants – $52 million
- Public Transit Development Grants – $421 million TF
- Bridge Construction – $290 million TF
- County Transportation Programs – $152 million TF
- Coast to Coast Connector Trail – $50 million TF
- Economic Development Road Fund – $15 million TF Keep Florida Beautiful – $800,000 TF
Economic Development Partners – $106.6 million
- Enterprise Florida – $18.1 million
- VISIT FLORIDA – $63.5 million
- Space Florida – $19.5 million – Institute for the Commercialization of Public Research – $5.5 million
- Economic Development Tools – Flexible Funding – $45 million ($35.2 million TF; $9.8 million GR)
- Economic, Community and Workforce Development Programs and Projects – $31.7 million
- Economic Development - $9.5 million ($7.5 million TF; $2 million GR)
- Housing & Community Development – $19.6 million GR
- Workforce Development – $2,682,000 ($2,632,000 TF; $50,000 GR)
- Defense Support Task Force – $4 million
- Military Base Protection & Defense Infrastructure – $2.6 million
Environmental / Agricultural
Total: $4.9 billion ($591.9 million GR; $4.4 billion TF); 20,249 FTE
- Everglades Restoration $70 million TF
- Springs Protection $10 million GR
- Land Acquisition for Military Buffers $10 million TF
- Land Acquisition $10 million GR and $50 million TF from Surplus Land Proceeds
- Beach Restoration $37.5 million ($18.2 million GR and $19.2 million TF, includes reversions)
- Water Projects $59.5 million GR
- Hybrid Wetlands Treatment Project $5.5 million GR
- Small County Solid Waste Management Grants $3 million TF
- Small County Wastewater Grants $23.3 million TF
- State Parks Maintenance & Repairs $19.5 million TF
- Petroleum Tanks Cleanup Program $125 million TF
- Wildfire Suppression Equipment $3.3 million GR
- Citrus Research and Budwood Program $9 million GR
- Water Conservation and Best Management Practices $1million GR and $2.3 million TF
- Hybrid Wetland Treatment Projects $6 million GR
- Rural and Family Lands Program $11.1 million GR
- Florida Agriculture Promotion Campaign $4 million GR
- Citrus Health Response Program $.5 million GR and $5.5 million TF
OUTCOME OF MAJOR 2013 LEGISLATION
Detailed information on the topics below can be accessed by clicking on the arrow to the left of each sub-heading.
PLEASE NOTE: When a bill approved by the Legislature is delivered to the Governor, he has 15 days to sign it, veto it, or allow it to become law without his signature. Many of the bills contained in this alert have not yet gone to the Governor for consideration; thus, their final status is unknown at this time. Additionally, due to the time-sensitive release of this report, some bill texts may not yet be available in their final form (i.e., late-day amendments incorporated into texts). If you should need follow-up information, please do not hesitate to contact Greenberg Traurig’s Tallahassee Office.
Major PASSED Legislation/Issues
- Implementation of Federal Patient Protection Affordability and Accountability Act (PPACA): Various Issues / HB 1842
In mid-June 2012, the U.S. Supreme Court upheld the provisions of PPACA which, in turn, required Florida to make decisions on a number of issues pertaining to the implementation of the new law. The issues were whether or not to operate a health insurance exchange, how to reconcile the conflicts between federal and state insurance regulatory law and whether or not to expand eligibility in the Medicaid program.
- Health Insurance Exchange – Early in the year, both the House and Senate agreed Florida would not establish a state-operated health insurance exchange. As such, the federal government will establish an exchange which will allow Floridians to shop for insurance coverage and provide subsidies to certain low income Floridians.
- Insurance Regulation – The Legislature passed SB 1842 by Sen. David Simmons (R-Altamonte Springs) which addresses conflicts between insurance regulatory provisions in federal and Florida law. The bill authorizes the Office of Insurance Regulation (OIR) to assist the federal government with enforcing PPACA provisions by reviewing policy forms and performing market conduct examinations or investigations. It also temporarily suspends the requirement that health insurers and HMOs obtain approval from OIR for nongrandfathered health plans for plan years 2014 and 2015. Insurers must still submit rates and rate changes for those plans prior to using them, but the rates can be used without the OIR approval.
- Medicaid Eligibility – Although the Supreme Court upheld PPACA, there was one caveat. The court ruled the decision of whether or not to expand eligibility in the state Medicaid Program is left to individual states. Even though Gov. Scott reluctantly supported expanding Medicaid eligibility in February, the legislative leadership staunchly refused an expansion. This decision set off a long running and rancorous debate between the Republicans and Democrats as Democratic legislators steadfastly pushed for expanding Medicaid eligibility.
Florida's decision to reject federal funds to Medicaid expansion will leave uninsured Floridians with incomes under $12,000 a year without assistance in securing health insurance coverage. This is due to the fact that PPACA envisioned this population being captured in the newly-expanded Medicaid Program. As such, the House and Senate each advanced plans designed to get health services for low income uninsured Floridians who are not eligible for the current Medicaid program but also are not eligible to receive subsidies from the federal government to purchase coverage in the federal health insurance exchange. Even though the debate continued into the final days of the session, the legislature failed to approve either health care plan.
To view a copy of PASSED SB 1842, click here.
- Hospital Reimbursements / Diagnosis Related Groups / Implementation Funding
Diagnosis Related Groups, better known as DRGs, are a system for identifying and standardizing reimbursement for hospital procedures performed, such as appendectomies or knee replacements, etc. The system was developed in anticipation of convincing Congress to use it for reimbursement, to replace "cost based" reimbursement that had been previously used.
DRGs have been used in the US since 1982 to determine how much Medicare pays the hospital for each procedure, since patients within each category are clinically similar and are expected to use the same level of hospital resources.
Florida's newly-adopted Statewide Medicaid Managed Care Program (SMMC) called for implementing a DRG system as a means of containing costs in the Medicaid Program. This new system would reimburse hospitals based on the needs of the patient, rather than paying a set daily fee for each patient which is the current practice.
The new system is scheduled to take effect on July 1 of this year. Proponents of the measure say it will provide an incentive for hospitals to deliver services in an efficient manner. However, opponents including Florida Hospital Association (FHA) and the Safety Net Hospital Alliance (SNHA) say changing to the DRG-related model payment will give for-profit hospitals a gain of about $95.8 million next year, while safety-net hospitals will lose about $112.7 million. As such, the hospital organizations advocated unsuccessfully for an additional year delay implementation date to give the facilities time to prepare for such a change.
The agreement between the House and Senate to spend $88 million in adjustments for a new hospital reimbursement plan for treating Medicaid patients removed the biggest obstacle to closing out the $24 billion budget for the Agency for Health Care Administration, and was considered a significant win by the public and safety-net hospitals. The Senate originally proposed no money for adjustments in a new DRG payment for safety-net hospitals.
- Managed Care Plan / Federal Approval
In late February, Florida received tentative approval from the federal Centers for Medicare and Medicaid Services of a proposal to shift almost all of Florida's Medicaid beneficiaries into managed care plans – capping nearly two years of negotiations. Medicaid is a joint state and federal program providing health care for the poor. In Florida, the federal government covers approximately 55 percent of Medicaid costs with the state picking up the rest.
The plan, championed by Gov. Rick Scott and Republican legislators in 2011, required a "waiver" to be granted by the federal government before implementation could proceed. The goal is to improve the quality of care for the state's approximately 3.5 million low income Floridians while, at the same time, holding down rising costs. The Medicaid program currently consumes about $21 billion of Florida's budget.
The plan shifts people into managed care plans in two phases – first for seniors who need long-term care and then for the broader Medicaid population, such as low-income women and children. The federal government approved the long-term care proposal before addressing the wider population. The long-term care portion will begin later this year, while the broader plan will begin next year with full implementation by 2015. Hundreds of thousands of Medicaid beneficiaries already receive services through managed care plans, but this new plan makes enrollment mandatory for nearly all of Florida's Medicaid population.
The federal approval is contingent on a number of requirements, including the hiring of an independent entity to oversee the process and establishing a plan to measure the quality of patient care. Also required is the hiring of an ombudsman plus the development of a plan to meet regularly with health advocates, patients and insurers to make sure that the program is performed as intended.
The Invitation to Negotiate (ITN) for the long-term care component of the statewide managed care program was released on June 29, 2012, and contracts were awarded on January 15, 2013. Seven managed care plans were awarded contracts to serve recipients within the Agency's 11 regions throughout the state.
Moreover, 20 managed care organizations are now competing for contracts to serve the broader Medicaid population. AHCA issued 11 separate ITNs on December 28, 2012. Contracts are expected to be awarded later this year in 11 different regions of the state. AHCA will award varying numbers of contracts by region.
- Health Care Facilities / Certificate of Need / Cancer Drug Parity: HB 1159
The issue of allowing for new nursing homes and trauma centers to be built was resolved on one of the last bills approved by the legislature. Since 2001, there has been a moratorium on issuing Certificates of Need (CONs) for new skilled nursing beds. In 2006, and again in 2011, the legislature extended the moratorium, but provided that it would expire on June 30, 2016, or upon the statewide implementation of Medicaid managed care, whichever is earlier. CON is the regulatory process that ensures a need exists before allowing for a new, converted, or expanded health facility.
The original version of HB 1159 by Rep. Marlene O'Toole (R-The Villages) would have exempted communities with high numbers of elderly from the moratorium on new nursing homes, but the measure was met with strong opposition from some in the nursing home industry. In the end, the bill allows for an expedited review of new construction of a community nursing home in a central Florida retirement community called The Villages. Further, the bill paves the way for a trauma center to be constructed in the area represented by Senate President Don Gaetz (R-Destin), over concerns raised by industry experts. During the session, legislation that would have deregulated the application process for trauma centers stalled in the Senate.
Other controversial measures tacked onto the bill in an effort to gain approval from House and Senate leaders included authorizing the Miami Children's Hospital to add obstetrical services for up to 10 women who have a diagnosis indicating the fetus may require at least one perinatal intervention. The issue split the House Miami-Dade delegation and drew a spirited debate on the final day. The Senate signaled that they would not accept this language, but another measure put on the bill late in the day ultimately gained the Senate's nod. That language requires individual and group health insurance policies and HMOs that provide coverage for cancer treatment medications to allow the coverage for oral medication to be no less favorable than for medications taken intravenously. The language prohibits insurers and HMOs from increasing the cost sharing for intravenous or injectable medications and from providing any incentive or changing the classification of a medication to meet the requirements.
PLEASE NOTE: Due to the immediate release of this report after the close of Session, the final version of this legislation was not available at the time of publication. Please contact the Tallahassee Greenberg Traurig office should you need a copy of the bill as passed.
- Optometrists Prescribing Drugs: HB 239
A longstanding, hotly contested lobbying effort was ended this year when the legislature gave final approval to a compromise plan that will allow optometrists to start prescribing oral medications.
The compromise was reached between optometrists and ophthalmologists, who long fended off attempts to allow optometrists to go beyond prescribing "topical" medications, such as drops and creams. Ophthalmologists argued, at least in part, that optometrists did not have adequate drug training --- an argument that drew strong disagreement from optometrists.
With the issue appearing to have momentum this year in the legislature, the two sides agreed to a bill that will expand prescribing powers, with some limits.
The measure, HB 239 by Rep. Matt Caldwell (R-Lehigh Acres), includes 14 oral drugs that optometrists will be able to prescribe, including certain types of antibiotics, analgesic, anti-viral and anti-glaucoma drugs. A 72-hour limit is imposed on when optometrists may prescribe analgesic and anti-glaucoma medications. At that point, the optometrist must consult a physician "skilled in the diseases of the eye". The bill also includes limitations, such as barring optometrists from prescribing many types of controlled substances. Additionally, the bill requires optometrists to take a course and an exam before prescribing or administering oral drugs and makes it clear that optometrists would not be able to do surgical procedures.
To view a copy of PASSED HB 239 click here.
- Biosimilar Drugs: HB 365
The legislature approved HB 365 by Rep. Matt Hudson (R-Naples) which had sparked a turf war between large pharmaceutical companies. The House bill updates Florida's generic pharmacy substitution law to prepare for the advent of interchangeable biologics and biosimilars. A biosimilar biological product is highly similar to another biological product, known as a reference product, with minor differences in clinically inactive components. Biosimilar biological products have been approved and sold in Europe since 2006, as well as in other parts of the world. There is no biosimilar biological product market currently in the United States.
Specifically, the bill provides that a pharmacist may only dispense a substitute biological product for the prescribed biological product if the United States Food and Drug Administration has determined that the substitute biological product is biosimilar to and interchangeable for the prescribed biological product; the prescribing health care provider does not express a preference against substitution; the pharmacist notifies the person presenting the prescription of the substitution; and the pharmacist retains a written or electronic record of the substitution for at least two years.
The Biologics Price Competition and Innovation Act (BPCIA) was enacted as part of the Patient Protection and Affordable Care Act (PPACA) and created a pathway for approval of biosimilar biological products by the FDA to be substituted for more expensive reference products and thereby lower health care costs. Currently, the Federal Food and Drug Administration (FDA) is developing guidance regarding the regulatory pathway for the approval of biosimilar and interchangeable biologic products. The bill, if approved by the Governor, would take effect July 1, 2013.
To view a copy of PASSED HB 365, click here.
- Florida Health Choices Program: SB 1844
SB 1844 by the Senate Health Policy and Appropriations Committees was passed by the legislature to support and streamline operations for Florida's Health Insurance Marketplace.
Administered by Florida Health Choices, Florida's Health Insurance Marketplace is a centralized web portal where small businesses and eligible individuals can shop and compare prices from a variety of health plans and benefit options.
In addition to allocating $900,000 in non-recurring general revenue to Florida Health Choices, SB 1844 simplifies the application process for individuals and small businesses seeking coverage through the Florida Insurance Marketplace and shortens the average time to begin coverage by as much as two weeks. The legislation fights exclusion by ensuring that no vendor offering products or services on the Marketplace can refuse to sell to a participant. The bill also removes restrictive eligibility criteria for individuals so more can be served in the future.
SB 1844 is said to help employers by giving them more flexibility in establishing the open enrollment period for their employees and streamlines the on-boarding process for insurance vendors by exempting the Marketplace forms and website from redundant reviews.
In addition, the bill removes medical underwriting as a requirement in the future and pursues compliance with federal law by aligning product pricing in the Marketplace with requirements of the Patient Protection and Affordable Care Act.
PLEASE NOTE: Due to the immediate release of this report after the close of Session, the final version of this legislation was not available at the time of publication. Please contact the Tallahassee Greenberg Traurig office should you need a copy of the bill as passed.
Major FAILED Legislation/Issues Which May Recur in 2014
- Medicaid Expansion under Affordable Care Act Rejected by Legislators
During the opening day ceremonies of the 2013 Session, House Speaker Will Weatherford (R-Wesley Chapel) announced his opposition to expanding Medicaid eligibility which was called for under the Affordable Care Act (ACA). On the same day, the House Select Committee, charged with determining how to implement ACA, voted to reject Medicaid expansion. Later in the first week, the Senate Select Committee followed the House's lead and also rejected expansion. Just prior to the start of the session, Republican Governor Rick Scott surprised party faithfuls by agreeing to accept Medicaid expansion.
The ACA called for, beginning January 2014, increasing the income threshold for Medicaid eligibility to 138 percent of the federal poverty level, which is higher than the threshold for many people currently enrolled. Economists estimated the expansion would add approximately 900,000 people to the Medicaid rolls. The federal government has promised to pay 100 percent of the expansion costs from 2014 through 2016 and then gradually reduce the share to 90 percent in 2020. This expansion would have cost the state roughly $3.5 billion during the next decade --- with those costs starting to hit during the 2016-17 fiscal year and steadily climbing after that. The state's share, however, would only be a fraction of the $55 billion overall expansion cost, with the federal government paying the rest.
- Medicaid Expansion Alternatives: SB 1816 / HB 7169
As the session ended, the curtain was drawn on two very different plans to provide coverage to low income uninsured Floridians. There is speculation as to whether Governor Scott will call the legislature into a special session to address this issue but with a tough re-election facing him, the possibility seems remote.
The Senate approved SB 1816 by Sen. Joe Negron (R-Stuart) which would have established a state premium assistance program, called Healthy Florida, to help these Floridians purchase private health insurance coverage. This bill was modeled after a plan that the Arkansas Legislature approved in late March. The bill would have also provided for Health Reimbursement Accounts (HRAs) to be used to encourage healthy behavior. Enrollees would have been required to participate in cost sharing in the program.
The program would have been administered under the Florida Healthy Kids Corporation (FHK). Currently, FHK offers, through private insurers, insurance to children in low income families from birth to age 18 who are not eligible for Medicaid. Persons eligible for the program would have been individuals who (1) are Florida residents and meet the definition of being "newly eligible" under PPACA; (2) maintain their eligibility with the corporation; and (3) meet any renewal requirements to renew their coverage at least annually.
To implement this plan, the Agency for Health Care Administration (AHCA) would have been required to submit a state plan amendment to the federal government for permission to use current federal Medicaid dollars to fund the new program. If the state plan was approved, enrollment would have begun on October 1, 2013, with coverage being effective no earlier than January 1, 2014. The program would cover approximately 438,000 enrollees in FY 2013-14 at a cost of $12.6 billion.
The bill would have stipulated that the program would expire at the end of any state fiscal year in which (1) the federal match falls below 90 percent; (2) the federal match contribution falls below the "Increased FMAP for Medical Assistance for Newly Eligible Mandatory Individuals" as specified under PPACA; or (3) a blended federal match formula for this program and the Medicaid program is enacted under federal law which causes the overall federal contribution to be reduced compared to separate, non-blended federal contributions under the status quo.
On the House side, HB 7169 by Rep. Travis Cummings (R-Orange Park), a more limited program was approved. The bill would have created the Florida Health Choices Plus (FHC Plus) program for low income parents and Social Security Income-eligible disabled adults with incomes under 100% of poverty who are not eligible for Medicaid. The current Florida Health Choices Corporation, an online marketplace for purchasing health care coverage and services, would have administered the program which was estimated to have covered approximately 115,000 Floridians if approved. The cost of the program was estimated at $25 million for the state's contribution to the enrollee accounts and the cost for FHC to administer the program.
Enrollees would have received $2000 from the state (funded through General Revenue) to purchase products and services in the FHC Plus marketplace. Further, each enrollee would have been required to contribute at least $25 to the account and employers, local governments, and charitable organizations would have been allowed to make contributions to the accounts. Eligible parents would have been required to use the funds in the CARE accounts to purchase preventative and hospital care while the disabled enrollees would have been allowed to use their funds for Medicare-related premiums and cost-sharing. If approved, the bill would have taken effect on July 1 with the first open enrollment period being set for March 31 to April 30, 2014.
To view a copy of FAILED SB 1816, click here.
To view a copy of FAILED HB 7169, click here.
- Certification of Assisted Living Facility Administrators: HB 865 / SB 616
SB 616 by Sen. Aaron Bean (R-Jacksonville) and HB 865 by Rep. Dennis Baxley (R-Ocala) would have required all administrators of Assisted Living Facilities (ALFs) to be certified by July 1, 2014. Both measures failed to be heard in committee. These bills would have directed the Department of Elder Affairs (DOEA) to approve third-party credentialing entities to certify ALF administrators and then would have required the entity to meet the standards of the National Commission for Certifying Agencies (NCCA). The certification would have taken the place of existing training and testing requirements provided by law.
The bills further would have required the third-party credentialing entity to establish "core competencies" that would capture the skills and knowledge needed to operate an ALF. The newly-created certification programs would have established minimum requirements for matters such as education, supervision, testing, and continuing education. Additionally, certification programs would have included a code of ethics and a disciplinary process. The measures would have limited the additional training that the DOEA can require by rule to ALF staff other than certified administrators. Lastly, the certification programs would have been responsible for approval of training entities providing initial and ongoing training to ALF administrators.
To view a copy of FAILED SB 616, click here.
To view a copy of FAILED HB 865, click here.
- Assisted Living Facilities Reform: SB 646 / HB 1319
In 2011, the Miami Herald wrote a series of articles regarding lack of oversight by the Agency for Health Care Administration (AHCA) which led to isolated cases of resident abuse. In response, Governor Scott created a task force to develop recommendations for reforms. During the 2012 session, the Senate considered sweeping reform measures which would have significantly increased regulations and associated costs for ALFs. That legislation failed to pass.
This year, the Senate and House bills were very similar and were more narrowly tailored to needed reforms. Although the Senate bill, SB 646 by the Health Policy Committee, passed the full Senate, the House version of the legislation, HB 1319 by Rep. Eddy Gonzalez (R-Hialeah Gardens), was never heard in its last committee. The legislation would have:
- Specified who was responsible for ensuring that ALF mental health residents receive necessary services;
- Reduced by half the number of monitoring visits the AHCA must conduct for ALFs with Limited Nursing Services (LNS) licenses and Extended Congregate Care (ECC) licenses;
- Required that facilities having one or more, rather than three or more, state supported mental health residents obtain a limited mental health (LMH) license;
- Allowed the AHCA to revoke the license of a facility with a controlling interest that had a 25 percent or greater financial or ownership interest in a second facility that closed due to financial inability to operate was the subject of other specified administrative sanctions;
- Clarified the criteria under which the AHCA must revoke or deny a facility's license;
- Specified circumstances under which the AHCA must impose an immediate moratorium on a facility;
- Set fines for all classes of violations to a fixed amount at the midpoint of the current range and multiplied these new fine amounts for facilities licensed for 100 or more beds by 1.5 times;
- Allowed the AHCA to impose a fine for a class I violation even if it was corrected before the AHCA inspected a facility;
- Doubled fines for repeated serious violations, and required that fines be imposed for repeat minor violations regardless of correction;
- Doubled the fines for minor violations if a facility was cited for the same minor violation three or more times over the course of three licensure inspections. Specified a fine amount of $500 for ALFs that were not in compliance with background screening requirements;
- Required an additional inspection, within 6 months, of a facility cited for specified serious violations;
- Required new facility staff, who have not previously completed core training, to attend a 2-hour pre-service orientation before interacting with residents;
- Required the AHCA to conduct a study of inter-surveyor reliability in order to determine the consistency with which regulations are applied to facilities and required the AHCA to report its findings and recommendations by November 1, 2013; and
- Required the AHCA to propose a plan for an ALF rating system by November 1, 2013.
To view a copy of FAILED SB 646, click here.
To view a copy of FAILED HB 1319, click here.
- Nursing Home Litigation Reform: SB 1384 / HB 869
A bill that would have made it more difficult to sue nursing homes for punitive damages ultimately died at the end of the session. SB 1384 by Sen. Bill Galvano (R-Bradenton) would have provided that a claimant could not bring a claim for punitive damages unless admissible evidence submitted by the parties provided a reasonable basis for the recovery of punitive damages. Among other provisions, the bill would have required an evidentiary hearing where the plaintiff would be required to establish that the breach of a legal duty resulted in an actual loss, injury or damage before the suit could proceed. It also would have prohibited the state or federal survey report of nursing a facility to be used to establish an entitlement to punitive damages. The measure was strongly opposed by advocates for nursing home patients as well as the AARP, who said injured patients would be kept from seeking compensation for damages. A comparable companion measure, HB 869 by Rep. Bill Hager (R-Delray Beach), failed to make it out of its committees of reference.
To view a copy of FAILED SB 1384, click here.
To view a copy of FAILED HB 869, click here.
- Genetic Information for Insurance Purposes: HB 857 / SB 982
Legislation filed in both the House and Senate would have expanded a law that prohibits insurers from cancelling insurance coverage, changing rates, or otherwise discriminating against people based on certain genetic information. Health insurers are already barred by law from using genetic test results for "any insurance purpose" in the absence of first receiving a diagnosis of a genetic condition. Bills filed in the Senate, SB 982 by Sen. Audrey Gibson (D-Jacksonville), and in the House, HB 857 by Rep. Richard Stark (D-Weston), would have added other types of policies, including life insurance, to the law.
Neither the House nor its identical Senate bill received a committee hearing during the 2013 Session.
To view a copy of FAILED HB 857, click here.
Ethics & Elections
Major PASSED Legislation
- Ethics Reform: SB 2
The House and Senate approved a far-reaching agreement on ethics reform that was a keystone of Senate President Don Gaetz's (R-Niceville) legislative game plan. The passage of SB 2, along with the passage of a campaign finance reform bill, gave House Speaker Will Weatherford (R-Wesley Chapel) and President Gaetz a victory on what each has identified as a top priority. The Senate had unanimously passed their ethics reform measure on the first day of Session. The House also approved the bill without a dissenting vote.
SB 2 places elected officials' financial disclosures online, provides the Commission on Ethics more authority, including the ability to garnish the public and private salaries of officials who fail to pay fines for ethics and elections violations, requires state officers to abstain from voting on matters that benefit them directly, requires ethics training for constitutional officers, places greater restrictions on public employment while in office, and prohibits officials from accepting gifts from political committees.
The bill also allows public officials to place assets in a blind trust to help avoid potential conflicts of interest and allows the use of certified public accountants or attorneys when preparing financial disclosures. The measure provides for the filing of ethics complaints all the way up to the day of an election, currently prohibited within the 5 days preceding an election, but requires that complaints filed within 30 days of an election be based on actual knowledge of a violation, not hearsay -- to stop the filing of frivolous politically motivated complaints. Additionally, SB 2 bars current and former legislators from lobbying the executive and legislative branches after leaving office. Further, SB 4 allows the Ethics Commission to initiate investigations based on referrals from the Governor, Department of Law Enforcement, and the state and U.S. Attorneys that already exist for investigations based on a complaint. Currently, the Commission can only act on a complaint filed by a citizen.
SB 2 was signed by the Governor on Wednesday, May 1.
To view a copy of PASSED SB 2, click here.
To view a copy of PASSED SB 4, click here.
- Campaign Finance Reform: HB 569
The Senate and House came to an agreement on campaign finance reform and passed HB 569 on April 24. The sweeping measure was one of the priorities of House Speaker Will Weatherford (R-Wesley Chapel) and was tied into an agreed-upon session priority to also pass ethics reform as pushed by Senate President Don Gaetz (R-Niceville). The primary debate between House and Senate lawmakers hinged on the issues of increased caps on individual political donations and the abolishment of Committees of Continuous Existence.
The agreement on campaign finance reform played into a complicated face off between Governor Rick Scott and the legislature on the budget and the ethics and campaign finance bills. The Governor wanted a $2,500 across-the-board raise for classroom teachers instead of the performance-pay plan pitched by lawmakers. The Governor's office had signaled that he was uneasy with raising campaign contribution limits.
The bill, as passed, eliminates Committees of Continuous Existence through a de-certification process on September 30, 2013, increases the frequency of campaign finance reporting for candidates, political committees and electioneering communications organizations, and prohibits candidates who switch races from "double-dipping" contributors for maximum contributions in both races. The measure also modifies the current $500 per election individual contribution limit for candidates as follows: $3,000 for statewide and Supreme Court candidates and $1,000 for other candidates. It further subjects individuals seeking a publicly-elected position on a political party executive committee to a new reporting requirement.
HB 569 was signed by the Governor on Wednesday, May 1.
To view a copy of PASSED HB 569, click here.
- Election Reform: HB 7013
A bill aimed at addressing the long lines and late results that plagued Florida's 2012 elections passed the legislature this year on its final day. Election reform was one of the priorities outlined by the House Speaker and Senate President in their agenda for the 2013 Session and was considered a high priority of Senate President Don Gaetz (R-Destin). HB 7013 by Rep. Jim Boyd (R-Bradenton) passed the House overwhelmingly, 115-1, after a similar almost-unanimous vote was taken on the first day of session. The Senate approved it on a nearly party-line vote, 27-13. Sen. Jack Latvala (R-Clearwater) sponsored the companion measure, SB 600. Governor Rick Scott is expected to sign the bill.
The bill that passed would allow up to fourteen days for early voting, though local supervisors could remain at the current eight days, and allows for more flexibility with early voting sites. It would limit the length of some ballot summaries for constitutional amendments. It would also dissolve a committee that sets the date of the presidential primary and instead require that vote be held on the first Tuesday that complies with party rules. Both Republican and Democratic delegations to national conventions had lost members over the last several years as Florida vied for an earlier primary date.
Lawmakers paved the way for the agreement when Senate members agreed to a House demand to delete a provision that would have allowed the Secretary of State to discipline underperforming county elections supervisors. All but one of those officials is elected, and House members noted that there are already ways under current state law to address this issue.
Republicans claim that the bill will largely solve the problems while still providing local supervisors of elections with enough flexibility to manage the balloting. But Democrats denounce the bill as a half-measure that will not fix the entire problem. They contend the legislature should completely roll back HB 1355, a 2011 measure that reduced the number of early voting days and made a raft of other changes to the state's elections code, some of which have been blocked by the courts.
PLEASE NOTE: Due to the immediate release of this report after the close of Session, the final version of this legislation was not available at the time of publication. Please contact the Tallahassee Greenberg Traurig office should you need a copy of the bill as passed.
Economic Development / Taxation
Major PASSED Legislation
- Manufacturing Sales Tax Exemption: HB 7007
During the last week of Session, and after intense wrangling with House and Senate leadership, the legislature passed one of Governor Rick Scott's two top legislative priorities for this year – an exemption of the 6 percent state sales tax on manufacturers' machinery and equipment purchases. The measure passed the Senate as an amendment to an omnibus economic development bill, HB 7007 by Rep. Carlos Trujillo (R-Doral).
The agreement, however, limited the tax break to a three-year period: from April 2014 to April 2017. The Governor had originally requested a permanent exemption as part of his agenda to promote business growth in the state.
According to the amendment's sponsor, Sen. Dorothy Hukill (R-Port Orange), the state would see a cut in revenue of $18 million for the "first year" which would include the last two months of the fiscal year. As such, the cut could increase up to $100 million for the first full year. Total cost of the 3-year agreement is estimated at $365.5 million.
Upon passage, House Democrats immediately raised the issue of constitutionality on the vote. Article 7, Section 18 of the Florida Constitution provides that bills impacting local government revenue, which the amendment would do, require a two-thirds vote in both Chambers. House Democrats indicated a lawsuit would be filed. The Senate passed amended HB 7007 on a bipartisan vote, with the House accepting the amendment and passing the bill 68-48 – below the two-thirds margin required.
Passage of the bill in the House came after a day where tensions mounted between Republicans and Democrats. Protesting the absence of an agreement on federally-funded health care, House Democrats brought the process almost to a grinding halt – forcing the reading of all bills in full. Republican leadership responded by limiting debate on bills, including HB 7007, and refusing to answer questions on the legislation. Republican leadership shepherded the bill through the process as an assurance that the Governor would sign their priorities of campaign finance and ethics reform – which he did shortly thereafter. Two bills were filed including the exemption. HB 391, by Rep. MaryLynn Magar (R-Hobe Sound), passed three House committees but died on the House Calendar. SB 518 by Sen. Dorothy Hukill (R-Port Orange) was withdrawn from its last two committees of reference and died on the Senate Calendar.
To view a copy of Section 6 of PASSED HB 7007 dealing with the manufacturing sales tax exemption, click here.
- Economic Development Incentive Evaluation / Budget Conforming Bill: SB 406
During the 2013 Session, an effort was undertaken to thoroughly review all tax incentives the state provides for the purpose of growing businesses and economic development. Florida has a broad range of tax incentives aimed at everything from luring spring training baseball to the state, to growing the film industry, to tourism-related issues. Recent reports of overly generous incentives that led to failed business ventures prompted legislators to action.
SB 406 by Sen. Andy Gardiner (R-Orlando) streamlines the process by which all incentive program applicants are evaluated by requiring that they be reviewed for the "economic benefits" of the proposed project. It also:
- Creates a rotating, 3-year review schedule for specified incentives and programs to be evaluated by the EDR and OPPAGA;
- Consolidates required reports and reporting dates for various economic development program reports by the DEO, Enterprise Florida, Inc. (EFI), the Office of Film and Entertainment, and Space Florida;
- Requires the DEO to publish project-based information on economic development programs provided to businesses on its website; and
- Specifies the meaning of the term "brownfield" for purposes of the sales tax exemption for building materials in redevelopment projects and for the brownfield redevelopment bonus refund.
Lawmakers agreed to give Governor Rick Scott $71.1 million for economic-development incentives, including $26.1 million rolled forward from this year. The Governor had asked for $278 million in incentives. Visit Florida will get an additional $20 million, while a Space Florida financing initiative will get $7 million. The agreement between the House and Senate included a $1.3 million tax cut in sales taxes for aircraft maintenance, increased by $10 million the amount of money available for spring training facilities housing two teams, uncapped the tax credits available for defense contractors, and provided a three-day back-to-school tax holiday projected to cost $28.5 million.
- Public Private Partnerships (PPPs): HB 85
The fiscal challenges faced by the state in recent years made the political climate more favorable for the use of Public Private Partnerships, better known as PPPs or P3s. A public-private partnership is a contractual agreement formed between a public agency and a private sector entity that allows for greater private sector participation in the delivery and financing of public building and infrastructure projects. Through these agreements, the skills and assets of each sector, public and private, are shared in delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service or facility.
The Florida Department of Transportation (FDOT) has had a very successful PPP program in place for a number of years, which has helped to finance, build and operate numerous roads, bridges and highways throughout the state. Its proven success led to the passage HB 85 by Rep. Greg Steube (R-Sarasota) which expanded on the PPP statute by allowing the finance/build/operate model to be used in other projects outside of transportation, such as the building of schools, hospitals, university facilities, etc. HB 85 creates a new section of law to facilitate public-private partnerships, and when cost-effective, to construct public-purpose projects. The bill also:
- Provides for notice to affected local jurisdictions as well as for comprehensive agreements between a public and a private entity;
- Specifies the requirements for partnerships and specifies the financing sources for certain projects by a private entity; and
- Provides for the applicability of sovereign immunity for public entities with respect to qualified projects.
The bill also creates a Partnership for Public Facilities and Infrastructure Act Guidelines Task Force to establish guidelines for public entities on the types of factors public entities should review and consider when processing requests for public-private partnership projects. The task force members are as follows:
- One member of the Senate, appointed by the President of the Senate;
- One member of the House of Representatives, appointed by the Speaker of the House of Representatives;
- The Secretary of Management Services or his or her designee;
- Six members appointed by the Governor, as follows:
- One county government official;
- One municipal government official;
- One district school board member; and
- Three representatives of the business community.
The task force must provide guidelines to public entities no later than July 1, 2014, on the kinds of factors public entities should review and consider when processing requests for PPPs.
Other provisions of the bill allow PPPs to contract with nonprofit organizations for public service works and authorize private firms to make unsolicited bids to local governments. The bill also allows local governments to lend funds to the private company entering into a PPP and opens up the construction of county roads to be done by PPPs.
- Economic Development / Department of Economic Opportunity: HB 7007
HB 7007, sponsored by Rep. Carlos Trujillo (R- Doral), creates the Gulf Coast Economic Corridor Act and establishes a nonprofit corporation administratively housed in the DEO to administer, invest, and award certain funds received by the state related to the Deepwater Horizon oil spill. The bill amends provisions related to: the Florida Small Business Development Center Network; the reporting and evaluation of economic development programs; economic development incentives; and the Reemployment Assistance Program. Several of the changes to the Reemployment Assistance Program conform Florida law to federal requirements.
Additionally, one of the Governor's top priorities, elimination of the 6 percent sales tax on the purchase of new manufacturing equipment, was approved in this bill. The tax break would take effect on April 30, 2014, and continue until April 30, 2017, at an initial cost of $18 million to the state for the first partial year the measure is in effect.
Other highlights of the bill include:
Reporting and Evaluations of Economic Development Programs
- Streamlines the process by which all incentive program applicants are evaluated by requiring that all applicants be evaluated for the "economic benefits" of the proposed project.
- Creates a review schedule for specified incentives and programs to be evaluated by the Office of Economic and Demographic Research (EDR) and the Office of Program Policy Analysis and Government Accountability (OPPAGA).
- Consolidates required reports and reporting dates for various economic development program reports by the DEO, Enterprise Florida, Inc. (EFI), the Office of Film and Entertainment, and Space Florida.
- Creates a project-based reporting system to be developed by the DEO to allow the public to view information relating to economic development projects receiving state incentives.
Florida Small Business Development Center Network
- Aligns the network's statewide policies with the statewide strategic economic development plan and statewide goals of the university system.
- Specifies the composition of the network's statewide advisory board, and support services offered by the network.
- Requires the network to provide a match to any direct state appropriation.
- Requires the network to set up incentives for the regional centers to create jobs, institute best practices, and serve new areas of the state or underserved areas.
- Requires regular reporting by the network on programs, services, and outcomes, including information on the network's economic benefits to the state.
Economic Development Incentives
- Requires the DEO to evaluate each application for economic incentives for the economic benefits of the proposed award to the state, and the EDR is to review and report on the methodology used to calculate the economic benefit.
- Provides that the DEO may waive the securitization requirements upon certifying specific information, in writing, to the Governor and the legislature.
- Specifies the meaning of the term "brownfield" for purposes of the sales tax exemption for building materials in redevelopment projects and for the brownfield redevelopment bonus refund.
- Allows enterprise zones that are between 15 and 20 square miles located in rural areas of critical economic concern to increase the zone by 3 square miles, and enterprise zones that are at least 20 square miles located in rural areas of critical economic concern to increase the zone by 5 square miles.
To view a link to PASSED HB 7007, click here.
Tax Refund Programs: HB 4013
HB 4013 by Rep. David Santiago (R-Deltona) removes the limitation which restricts a qualified applicant from receiving more than $7 million in tax refunds in all fiscal years it participates in the Qualified Defense Contractor and Spaceflight Business (QDSC) Tax Refund. It also removes the limitation which restricts a qualified target industry business from receiving more than $7 million in refund payments in all fiscal years it participates in the Qualified Target Industry (QTI) Tax Refund program or more than $7.5 million if the project is located in an enterprise zone.
The QDSC program targets the following types of projects:
- New or consolidated Department of Defense (DOD) contracts;
- Conversion of DOD production jobs to non-defense production jobs;
- Projects involving the reuse of defense-related facilities for specific activities; or
- Contracts for the manufacturing, processing, and assembly of space flight products; and other activities related to space flight.
The Qualified Target Industry Tax Refund (QTI) program targets the following types of projects:
- Clean Tech including biomass and biofuels processing; energy equipment and manufacturing; energy storage technologies; photovoltaic; and environmental consulting;
- Life Sciences including biotechnology; pharmaceuticals; and medical devices including laboratory and surgical instruments; and diagnostic testing;
- Info Tech in including modeling, simulation and training; optics and photonics; digital media; software; electronic; and telecommunications;
- Aviation & Aerospace including aircraft and aircraft parts manufacturing; maintenance repair and overhaul of aircrafts; navigation instruments manufacturing; flight simulator training; space vehicles and guided missile manufacturing; satellite communications; space technologies; and launch operations;
- Homeland Security & Defense including optical instruments; navigation aids; ammunition; electronics; military vehicles; shipbuilding and repair; computer systems design; and simulation and training;
- Financial & Professional Services including banking; insurance; securities and investments; corporate headquarters; engineering; legal; accounting; and consulting;
- Emerging Technologies including global logistics; marine sciences; materials science; and nanotechnology; and
- Other Manufacturing including food and beverage; automotive and marine; plastics and rubber; and machine tooling.
To view a copy of PASSED HB 4013, click here.
Major FAILED Legislation Which May Recur in 2014
- Economic Development / Professional Sports Facilities: SB 306 / HB 165
The legislature this year considered a bill to provide sports programs tax incentives for construction and/or renovation of sports facilities. Initially, SB 306 by Sen. Oscar Braynon (D-Miami Gardens) was specifically intended to allow the Miami Dolphins to renovate Sun Life Stadium. As passed by the Senate, the bill was broadened to allow any officially-recognized national sports program to take advantage of the tax incentives.
Buddy Dyer, mayor of Orlando, was also supportive of the bill which would have allowed the city to proceed with construction of a $110 million stadium in an attempt to lure a major league soccer franchise.
Although the Senate bill passed a floor vote, the House bill, HB 165 by Rep. Eddy Gonzalez (R-Hialeah Gardens), was not considered in its last committee of reference and therefore did not pass.
To view a copy of FAILED SB 306, click here.
To view a copy of FAILED HB 165, click here.
Communications Services Tax Revision: HB 303 / SB 1422 / House Finance & Tax Draft Legislation / SB 316
The move to simplify the state's Communications Services Tax (CST) garnered much debate in the early days of the legislative season but ultimately failed to pass. A report by a Department of Revenue workgroup, submitted to the Governor on February 1, recommended repeal of the CST which is a mix of local and state taxes on land-line telephone, cable services, satellite and other communications services. Currently, a rate of 6.65 percent is imposed by the state with local governments having the option to charge up to 7.12 percent. Satellite services are currently taxed at 10.8 percent.
Two bills originally filed, HB 303 by Rep. Jamie Grant (R-Tampa) and SB 1422 by Sen. Garrett Richter (R-Naples), did not receive any hearing. The bills would have increased the state tax from 6.65 percent to 10.65 percent. Further, the bills would have repealed the authority for local municipalities to impose a local CST and the authority of municipalities, charter counties, and noncharter counties to collect permit fees from communications services providers that use or occupy municipal or county roads or rights-of-way. Under the measures, the state would have distributed 45 percent of the dollars received back to local governments.
The House Finance & Taxation Committee developed a conceptual proposal which would have consolidated the CST into a single unified statewide rate, regardless of the delivery medium or location of the services used. Further, it would have repealed local CSTs while increasing the state rate and broadening the tax base. The consolidation was intended to be revenue neutral for the state and local governments.
The local tax revenue was replaced with a revenue sharing formula. Under the proposal, the state CST was increased from 6.65 percent to 10.11 percent; the direct to home satellite CST from 10.8 percent to 10.11 percent, and the prepaid calling arrangements from 6.62 percent (including average local option rates) to 10.11 percent. Although an initial draft proposal was discussed by the committee, a bill was never filed.
Another attempt to address the issue came when a bill that required out-of-state retailers to pay a sales tax on internet purchases was amended with language to address the CST. SB 316 by Sen. Nancy Detert (R-Venice) was approved after an amendment was added that would have lowered the CST tax rate. However, the language was removed in the Appropriations Subcommittee on Finance and Tax. In lieu of this, the bill required the Department of Revenue to develop a tracking system to determine the amount of sales tax collected as a result of internet sales. From this, the Revenue Estimating Conference was to use the information to estimate sales tax collections. The Legislature would then utilize the data to provide tax relief by reducing the CST. Prior to Session, Governor Scott pegged this issue as a priority; however, he was unwilling to accept the language on internet sales tax issue which could have been construed as a tax increase.
To view a copy of FAILED HB 303, click here.
To view a copy of the House Finance & Tax's Presentation on Taxation of Communications Services Reform Legislative Concept Review, click here.
To view a copy of the draft Communications Services Tax Legislation discussed in the House Finance & Tax Committee, click here.
To view a copy of FAILED CST Amendment to SB 316, click here.
- Corporate Income Tax Reduction: HB 401 / SB 562
Over the past several years, Republican Governor Rick Scott has included in his legislative proposals a decrease in the state's 5.5 percent corporate income tax with the goal of eventually eliminating the tax altogether. This exemption was increased from $5,000 to $25,000 in 2011. The exemption increased to $50,000 effective January 1, 2013. The Governor proposed generating the recurring $19.7 million necessary to pay for the increased exemption through cost savings across state government.
This year, the Governor asked lawmakers to increase the current exemption from $50,000 to $75,000 with the goal of removing 2,000 businesses from the corporate tax rolls.
HB 401 by Rep. Ross Spano (R-Riverview) addressed the corporate income tax reduction and revised the amount of income that is exempt from the franchise tax imposed on banks and savings associations.
The House bill never received a committee hearing. Its identical companion, SB 562 by Sen. Dorothy Hukill (R-Port Orange), passed the Senate Banking and Insurance Committee but died in the Appropriations Subcommittee on Finance & Tax, its second out of four committee references.
To view a copy of FAILED HB 401, click here.
- Phase-Out of Sales & Use Tax on Commercial Rental Property: HB 629 / SB 656
Rep. Marlene O'Toole (R-Lady Lake) and Sen. Dorothy Hukill (R-Ormond Beach) filed bills this year to phase out the state's 6 percent sales and use tax on commercial rental property. Although members of the House Finance and Tax Subcommittee heard a presentation on the issue, the bills failed to receive a committee hearing in either chamber.
HB 629 and SB 656 would have amended s. 212.031, F.S., to allow for reducing the tax rate to 5 percent starting January 2014; 4 percent starting January 2015; 3 percent starting January 2016; 2 percent starting January 2017; and 1 percent starting January 2018. A complete repeal would have been effective January 2019. The tax brings in an estimated $1.3 billion in state revenues yearly – an impact that lawmakers could not overlook. Local governments also benefit from the tax. Supporters, such as the Florida Realtors and the Florida Retail Federation, claimed the tax is a deterrent for business growth and job creation in the state.
Current law provides numerous exclusions and exemptions from the tax including agricultural property; property used exclusively as a dwelling; property used as an integral part of the performance of qualified production services directly in connection with the production of a qualified motion picture; property used at an airport exclusively for the purpose of aircraft landing or aircraft taxiing or property used by an airline for the purpose of loading or unloading passengers or property onto or from aircraft or for fueling aircraft; public streets or roads which are used for transportation purposes; and others.
To view a copy of FAILED HB 629, click here.
- Internet Sales Tax: HB 7097 / SB 316
A bill developed by the House Finance & Taxation Committee, HB 7097, was aimed at collecting sales tax on Internet sales – an issue that has been re-visited by the Legislature over the past several years. The move to collect the tax (which is already called for in current law) has been strongly supported by retailers physically located in Florida who rely on non-Internet sales. These retailers claim they are at a disadvantage to Internet retailers because buyers know they will not be charged sales tax.
HB 7097 did not receive further consideration after being passed out of the House Finance & Tax Committee. The bill provided that a "mail order sale" included the sale of tangible personal property over the Internet. The bill added in-state representatives of a dealer, in addition to the current law inclusion of in-state agents of that dealer, to cause a dealer to have nexus. The bill further provided that an out-of-state dealer had nexus with Florida and was therefore obligated to collect tax if a person other than the dealer engaged in activities within the state that assisted the out-of-state dealer in making sales in Florida.
A bill advanced in the Senate, SB 316 by Sen. Nancy Detert (R-Venice), was approved by two committees before dying in Senate Appropriations. The bill created two new situations under which an out-of-state retailer would become a dealer required to collect and remit Florida sales tax:
- When a person with nexus to Florida carried out one of a number of acts, including selling a similar line of products as a dealer or operated under the same name and used similar trademarks as a dealer, then the dealer would be required to collect and remit Florida sales tax. However, the bill based the requirement to collect sales tax on the fact that the activities conducted in Florida on behalf of the dealer were significantly associated with the dealer's ability to establish and maintain a market in Florida.
- If the dealer entered into an agreement with one or more Floridians, under which the person directly or indirectly referred potential customers to the dealer for a commission or other consideration, and the cumulative gross receipts from referrals were in excess of $10,000 during the previous 12 months, then a rebuttable presumption arose that the dealer must collect and remit Florida sales tax.
Finally, the bill would have required the Department of Revenue to develop a tracking system to determine the revenues remitted by out-of-state retailers and to report that amount annually. The amount collected would have been used to provide reductions in the Communications Services Tax and to implement a three-day sales tax holiday. This trade off was Sen. Detert's attempt to gain support from Republicans who did not want to be seen as raising taxes.
To view a copy of FAILED HB 7097, click here.
To view a copy of FAILED SB 316, click here.
Energy / Environmental / Growth Management
Major PASSED Legislation
- Environmental Regulation: HB 999
HB 999 by Rep. Jimmy Patronis (R-Panama City) provides that when reviewing an application for a development permit, local governments cannot request additional information from an applicant more than three times, unless the applicant waives the limitation in writing. It also authorizes Water Management Districts (WMDs) and the Department of Environmental Protection (DEP) to notify a permittee by electronic mail of any change or suspension to a permit as a result of a water shortage in the district. Further, the bill:
- Prohibits WMDs from reducing allocations due to additional water supplies resulting from developing of desalination plants.
- Provides that the issuance of well permits is the sole responsibility of WMDs, delegated governments, or local county health departments, and prohibits government entities from imposing certain requirements and fees.
- Provides that stormwater utility fees may be charged to the beneficiaries of the stormwater utility, and provides a definition for the term "beneficiary" for the purpose of collecting stormwater fees.
- Community Transportation Projects: HB 319
HB 319 by Rep. Lake Ray (R-Jacksonville) amends section 163.3180, Florida Statutes, (Community Planning Act) as it relates to transportation concurrency, a growth management strategy used to ensure adequate transportation infrastructure and services are in place at the time of new development. Under the 2011 Florida Legislature's growth management law reform, local governments were given the option of requiring transportation concurrency. This bill clarifies that local governments that opt to implement transportation concurrency must follow statutory guidelines under section 163.3180, Florida Statutes. Those local governments that implement a mobility fee-based funding system must comply with the same general principles as local governments implementing transportation concurrency. The measure also prohibits any local governments implementing an alternative mobility funding system that is not mobility fee-based from holding new developments responsible for existing transportation deficiencies as defined by statute.
The bill authorizes local governments to accept contributions from multiple applicants for one planned facility improvement where certain statutory requirements are met. Under this legislation, development applicants may satisfy transportation requirements by making a good faith offer to enter into a binding agreement to pay for or construct its proportionate share of required improvements subject to certain statutory requirements. Furthermore, this bill requires local governments to provide the basis upon which the landowners will be assessed a proportionate share of transportation costs. Finally, HB 319 prohibits local governments from implementing any alternative mobility funding system to delay or deny transportation projects where the developer-applicant has agreed to pay for its transportation impacts.
The measure passed the House 108-5 and passed the Senate unanimously. If approved by the Governor, the bill will take effect upon becoming law.
To view a copy of PASSED HB 319, click here.
- Everglades Improvement and Management: HB 7065
HB 7065 by Rep. Matt Caldwell (R-Lehigh Acres) amends section 373.4592, Florida Statutes, regarding the state's long-term cleanup and restoration objectives for the Everglades. The bill passed both the House and Senate unanimously. It provides the legislative finding that implementation of best management practices funded by the owners and users of land in the Everglades Protection Area (EAA) effectively reduces nutrients in waters flowing into the EAA.
The measure makes various changes to the Everglades program, removing outdated references and amending definitions. The definition of "Long-Term Plan" is changed to include several South Florida Water Management Districts' (SFWMD) water quality plans and reports, thereby creating the new Everglades restoration plan. It requires the SFWMD to complete a use attainability analysis after completion of all projects under the Long-Term Plan to determine whether those projects (or improvements) will achieve the required water quality based effluent limits.
Additionally, HB 7065 extends the Everglades agricultural privilege tax of $25 per acre through 2026, and then drops the tax rate by $5 gradually over 10 years. In 2036, the tax rate will fall to $10 per acre. Proceeds from this tax must be used for design, construction, and implementation of the Long Term Plan. The bill also appropriates $12 million in recurring General Revenue funds and $20 million in recurring trust funds to the Florida Department of Environmental Protection for the SFWMD's Restoration Strategies Regional Water Quality Plan, beginning in the 2013-2014 fiscal year through the 2023-2024 fiscal year. If approved by the Governor, the appropriation of the bill takes effect July 1, 2013, and the bill itself takes effect upon becoming law.
To view a copy of PASSED HB 7065, click here.
- Growth Management: HB 537
HB 537 by Rep. George Moraitis (R-Ft. Lauderdale) amends section 163.3167, Florida Statutes, to prohibit voter referendums and initiatives on development orders. This bill prohibits local government initiatives or referendums for local comprehensive plan and map amendments that affect more than five parcels of land except for those expressly authorized by specific language in a local government charter that was lawful and in effect on June 1, 2011. The measure applies retroactively to make null and void any initiative or referendum commenced after June 1, 2011. If approved by the Governor, the bill will be effective upon becoming law.
To view a copy of PASSED HB 537, click here.
- Natural Gas Motor Fuel: HB 579
HB 579 by Rep. Lake Ray (R-Jacksonville) amends Chapter 206, Florida Statutes, regarding natural gas motor fuel. The similar companion bill, SB 560, was sponsored by Sen. Wilton Simpson (R-New Port Richey). The measure creates Part V of Chapter 206, Florida Statutes, to be entitled, "Natural Gas Fuel," and adds various definitions.
Provisions of HB 579 include a repeal of the annual decal fee for motor vehicles powered by alternative fuels and creates a natural gas fuel tax (and exemptions) for natural gas used as motor fuel with an effective date of January 1, 2019. The bill provides exemptions and refunds from the natural gas fuel tax subject to certain statutory requirements.
New licensing and reporting requirements are set up for those selling natural gas fuel at retail in the state, as well as penalties for failure to comply with these new licensing requirements. The bill expands the definition of "energy efficiency improvement" to include the installation of systems for natural gas fuel, as defined by statute, to allow counties to use surtax revenues for loans, grants, or rebates to the private sector for the installation of natural gas fueling systems if certain statutory conditions are satisfied.
The Office of Program Policy Analysis and Government Accountability (OPPAGA) is required to complete a study of the taxation of natural gas fuel used to power motor vehicles, and to submit a report addressing certain issues to the Florida Legislature by December 1, 2017. HB 579 also creates a natural gas fuel fleet vehicle rebate program within the Department of Agriculture and Consumer Services (Department). Under this rebate program, each applicant is eligible to receive a maximum rebate of $25,000 per vehicle up to a total of $250,000 per fiscal year if certain statutory requirements are satisfied. The Department is required to annually assess this rebate program and to submit a report to the Governor, the President of the Senate, the Speaker of the House, and the OPPAGA. The bill also provides an appropriation of $6 million dollars in recurring funds from the General Revenue Fund to the Department to fund the natural gas fuel fleet vehicle rebate program beginning in the 2013-2014 fiscal year through the 2017-2018 fiscal year. With some exceptions, HB 579 provides an effective date of January 1, 2014.
To view a copy of PASSED HB 579, click here.
- Florida Renewable Fuel Standard Act / Ethanol: HB 4001
HB 4001 by Rep. Matt Gaetz (R-Ft. Walton Beach) repeals section 526.201-526.207, Florida Statutes, the 2008 Florida Legislature's Florida Renewable Fuel Standard Act, thereby removing the statutory requirement that only blended gasoline (ethanol) can be sold or offered for sale in Florida by a terminal supplier, importer, blender, or wholesaler. Additionally, the legislation removes certain obsolete state reporting requirements related to the sale of blended and unblended gasoline. HB 4001 does not prohibit retail dealers (gas stations) from selling blended gasoline nor does it prohibit consumer motorists from buying blended gasoline. If approved by the Governor, the legislation will take effect July 1, 2013.
The bill passed the House with a vote of 77 yeas to 39 nays while in the Senate the vote was 33 yeas to 1 nay.
To view a copy of PASSED HB 4001, click here.
- Consumptive Use Permits: SB 364
SB 364, by Sen. Alan Hays (R-Umatilla), amends section 373.019(1), Florida Statutes, authorizing water management districts and the Florida Department of Environmental Protection to issue 30-year consumptive use permits ("CUP") for alternative water supply ("AWS") projects, where certain statutory conditions are met. The bill prohibits the issuance of AWS CUP's for non-brackish (i.e., fresh water) groundwater supplies or non-alternative water supplies. This bill would allow utilities, for example, to obtain permits for at least 30 years using alternative sources of water, such as brackish or salt water. If approved by Governor Rick Scott, the measure will be effective July 1, 2013.
To view a copy of PASSED SB 364, click here.
- Agriculture Water Supply: SB 948
SB 948 by Sen. Denise Grimsley (R-Sebring) amends sections 373.701, .703, and.709, and Chapter 570, Florida Statutes. It requires the Department of Agriculture and Consumer Services (DACS) to create an agricultural water supply planning program to develop certain data related to future agricultural water supply demands. DACS must provide the requisite data to the water management districts (WMDS) for regional water supply planning. The WMDS must consider the data received from DACS, as well as agricultural demand projection data and analysis received from local governments, to determine the best available data for prospective agricultural water supply needs.
The bill passed the House and Senate unanimously and, if approved by the Governor, will take effect on July 1, 2013.
- Water Quality Credit Trading: HB 713
HB 713 by Rep. Cary Pigman (R-Sebring) reenacts section 373.4595(1)(n) and amends section 403.067 and 403.088, Florida Statutes, authorizing the Florida Department of Environmental Protection (FDEP) to implement voluntary, state-wide water quality credit trading (WQCT) in adopted basin management action plans. This bill expands the WQCT pilot project occurring in the Lower St. Johns River Basin. WQCT is a market-based tool used to achieve water quality goals. Trading is typically based upon the fact that regulated sources, such as urban stormwater systems and agricultural sites, within a waterbody (i.e., impaired rivers, lakes, and streams) can be faced with different costs to abate or control identical pollutants. The purpose of the WQCT program is to allow regulated sources faced with higher pollution control costs to buy credits (pollutant reductions) from another source at a cost lower than the cost of implementing the reductions themselves, thereby achieving regulated pollutant reduction goals. This bill provides trading procedures, record-keeping, monitoring, inspection, and reporting requirements. The measure has an effective date of July 1, 2013.
To view a copy of PASSED HB 713, click here.
Major FAILED Legislation Which May Recur in 2014
- Purchase of Land by Government Entities: SB 584 / HB 901
SB 584 by Sen. Alan Hays (R-Umatilla) required the state, counties and municipalities to create an inventory of government-owned property, ensure there was enough funding for current and future maintenance needs, and sell an equal amount of nonconservation property before a conservation lands acquisition.
By mid-session, the bill's sponsor acknowledged that the bill would not pass this year even though an amendment had been offered to take out the provision requiring that government entities hold on buying lands until an equal amount of land was sold – the most controversial provision of the bill. Although the measure died in its first committee of reference, Sen. Hays said that he would be filing the bill again in upcoming years. The identical companion, HB 901 by Rep. Charlie Stone (R-Ocala), never received a committee hearing.
The measure was opposed by environmental groups, cities and counties including Audubon Florida, the Florida Association of Counties, the Florida Wildlife Federation and the Sierra Club of Florida. Supporters included the Coalition for Property Rights, Allied Sportsmen's Associations of Florida, and Liberty First Network.
To view a copy of FAILED SB 584, click here.
- Springs Revival Act: HB 789 / SB 978
HB 789 by Rep. Linda Stewart (D-Orlando) and its identical companion, SB 978 by Sen. Darren Soto (D-Kissimmee), proposed to create the Springs Revival Act under a new section 373.198, F.S., to require Water Management District (WMD) plans for restoring certain Florida springs. The bill mandate was for each WMD to identify the first and second magnitude springs within the district that are in decline based on historic average water quality, reduced flow levels, or those listed in the Florida Department of Environmental Protection's rule for impaired water bodies.
Under the measure, each WMD, by July 1, 2014, was required to develop a 5-year plan to restore the identified springs. The bill further required that WMDs submit a quarterly report on the progress of the spring restoration efforts to the Governor, President of the Senate, and Speaker of the House of Representatives. The bill proposed to create rulemaking authority to implement the mandate.
Neither of these bills received a committee hearing in the House or Senate. We should expect to see future legislative efforts attempting to address the issue of drought and water pumping impacts upon Florida springs.
To view a copy of FAILED HB 789, click here.
Major PASSED Legislation
- Internet Café Ban: HB 155
An unexpected priority arose during the Session's first half as lawmakers rushed to pass legislation shutting down Internet sweepstakes cafés, casino-styled games at adult arcades and "strip mall casinos" in Florida. The proposal was shepherded quickly through both chambers after 57 arrests were made involving alleged illegal gaming, money laundering and racketeering by a charity, Allied Veterans of the World. The scandal also forced the resignation of former Lt. Gov. Jennifer Carroll, who once did consulting work for Allied Veterans while she served in the Florida House of Representatives. Sen. John Thrasher (R-St. Augustine) had originally sought to place a moratorium on new Internet cafés coming into the state; however, the tone of the debate quickly changed after the alleged illegal activity was uncovered.
The bills, SB 1030 by Sen. Thrasher (R-St. Augustine) and HB 155 by Rep. Carlos Trujillo (R-Doral), prohibit electronic games that look like slot machines and those machines that employ games of chance (unless no prize of value is given) as opposed to games of skill. This would exclude Indian casinos and pari-mutuels located in Miami-Dade and Broward counties where such gaming has gained legislative approval. The bills also require that customers only use coins and not dollar bills to start a game and prohibit customers from redeeming points for a retail gift card or cash. The measure further limits any prize offered to 75 cents per game played. The bills passed the House 108-7 and passed the Senate 36-4. The measure was signed by Governor Rick Scott on April 10 and took effect immediately.
The move brought strong protests from seniors who saw adult arcades as part of their social routine. However, Sen. Thrasher stated, "There is nothing in this bill that is going to close legitimate businesses. This is about closing down unscrupulous operators who have found loopholes in the statutes."
Sen. Garrett Richter (R-Naples), who chairs the Senate Gaming Committee, said if any problems arise from the bill, the issue could be addressed next year when a more sweeping proposal could evolve on the future of gambling in Florida.
Previously, Internet cafés claimed to operate under a provision of state law allowing companies to offer game promotions to sell a product. Because the businesses sold Internet time but also provided sweepstakes by way of slot-like video games, they argued they were legal under the law and fell under Florida's game promotion statutes rather than its gambling laws. Pari-mutuel permit-holders complained of having to compete with the cafés which are not subject to the same regulations.
Over the past number of years, the question of whether to ban or regulate Internet cafés in Florida has been the subject of intense legislative debate with no resolution. The Seminole Tribe states that any regulation that authorizes games that are in effect slot machines or other casino type gambling would abrogate the compact and permit the Tribe to reduce or discontinue payments to the state.
To view a copy of PASSED HB 155, click here.
Major PENDING Issues Which May Recur in 2014
- State Gaming Study
Prior to the start of the 2013 Legislative Session, stakeholders in Florida's gaming industry knew that no comprehensive gaming legislation would be enacted this year. Select Committees on Gaming were created by Senate President Don Gaetz (R-Niceville) and House Speaker Will Weatherford (R-Wesley Chapel) to review the state's gambling laws.
Both the House Select Committee on Gaming, chaired by Rep. Rob Schenck (R-Spring Hill), and the Senate Committee on Gaming, chaired by Sen. Garrett Richter (R-Naples), heard from stakeholders and representatives from the existing gaming industry. These included: the state Lottery, Seminole casinos, pari-mutuels, Internet sweepstakes cafés, short casino cruises, the hospitality industry, social conservatives, and casino conglomerates pushing for the development of future Las Vegas-style casinos.
Focusing on gaming policy, the legislature issued an "Invitation to Negotiate" (ITN) for a gambling study. On April 16 the legislature announced the joint selection of Atlantic City-based Spectrum Gaming Group, who will undertake the two-part study on the economic, fiscal and social impacts that could come through various changes to gaming laws in the state. The first part is to be completed in July, the second in October. The total cost of the two-part study is $388,845.
- Expiration of Seminole Compact Provision
The state's compact with the Seminole Tribe of Florida was enacted in 2010 and is effective through July 31, 2030. It includes a provision that the Seminole Tribe has exclusive rights on banked card games – such as baccarat and blackjack – at five locations, with that provision expiring July 31, 2015. In return, the Seminoles pay the state a minimum of $233 million a year from generated revenue. Exceptions to the compact include poker licensed card rooms and slot machines at existing pari-mutuel facilities in Miami-Dade and Broward counties. The state has generated $726 million through the compact with the Tribe. Employment by Seminole casinos has grown 52 percent since 2008, in large part because of expansion of card games.
Members of this year's House Select Committee on Gaming and the Senate Gaming Committee examined the current Seminole Tribe compact with an eye toward key provisions of the multimillion-dollar agreement that are set to expire in just over two years. Members asked if annual fiscal data could be made available before a decision is made to renew, renegotiate or abandon the Seminole's exclusive rights on banked card games. The Tribe submits revenue and expenditure audits to the state Department of Business and Professional Regulation, but the numbers remain confidential outside of the executive branch.
Both the Senate Gaming Committee and the House Select Committee on Gaming studied gambling issues this year and the legislature issued an invitation to negotiate for a gambling study which is intended to form the basis for more comprehensive policy decisions during the next session.
- Slots and Pari-mutuel Issues
Pari-mutuels outside of Broward and Miami-Dade counties have moved forward with efforts to install slot machines in their facilities. Referendums allowing slots have been passed in Gadsden, Lee, Hamilton, Palm Beach, Brevard, and Washington counties. Currently, a nonbinding legal opinion by Attorney General Pam Bondi has brought the efforts to a halt. The opinion asserts that 2004 legislation permitting slot machine referendums in Broward and Miami-Dade counties calls for clear legislative permission regarding referendums on slot machine expansion throughout the state. As a result, Florida's Department of Business and Professional Regulation will not issue new slot machine licenses outside of Broward and Miami-Dade counties without the legislature's direct approval.
The 2010 compact between the Seminole Tribe and the State of Florida limits slot machines to Miami-Dade and Broward counties and provides for a reduction or suspension of revenue payments to the state if slots are authorized elsewhere. No pari-mutuel has challenged the Attorney General's opinion in court. The general consensus is that policy makers will want to understand the potential impact on the Seminole Compact before allowing slots outside of South Florida.
Pari-mutuel interests, testifying before the Senate Gaming Committee, have stressed that increased competition from within the gaming industry have put them at an economic disadvantage.
Representatives of the greyhound racing industry asked committees dedicated to studying gaming issues to consider decreasing the minimum level of greyhound races necessary to operate a poker room. The racing industry began to see decreases in wagering on horse races, jai alai games, and greyhounds in the 1980s. Over the years, the legislature has lowered tax rates, granted card rooms and increased pot limits, inter-track wagering, and allowed slots in Miami-Dade and Broward counties in an attempt to aid the industry. Even with this aid, a number of facilities still claim they are struggling. Many say the live races are only "anchors" for gambling.
The issues surrounding pari-mutuels and slot machines remain on hold as the legislature engages in an in-depth study on the gaming industry. Senate President Don Gaetz (R-Destin) and House Speaker Will Weatherford (R-Wesley Chapel) set up gaming-focused committees and commissioned a private study.
- Destination Casinos
Last year, casino corporations pushed for large destination resorts in South Florida with an intense public campaign. It was labeled as one of the biggest lobbying fights of the 2012 session. This year, the pressure on lawmakers to create three destination casino resorts in Broward and Miami-Dade counties has lost its drive – or at least until the coming years when state gaming policies may be addressed in full.
After defeat of the measure during the 2012 Session, casino stakeholders such as the Genting Group, indicated they would pursue plans to place a constitutional amendment on the ballot allowing casinos in Florida. However, Genting, along with casino conglomerates Wynn Resorts and Las Vegas Sands, decided that such a campaign was not in their best interests given the present political climate. Presently, Genting has moved forward with South Florida luxury hotel and condominium developments.
Although destination casino resorts gave public testimony before both the House Select Committee on Gaming and the Senate Gaming Committee, they, like other gaming interests, were not expectant of any policy decision during this Session. Committees set aside this year for study and public hearings on gaming.
Major PASSED Legislation
- Citizens Property Insurance Corporation: SB 1770
On day 59 of the 60-day session, the legislature passed a slimmed-down version of a bill making changes to Citizens Property Insurance Corporation which holds the line on rates for policyholders. The bill has less substantive provisions than the original Senate version and leans more toward the position of the House.
The Senate voted 32-1 to pass SB 1770 by the Senate Banking and Insurance Committee. The House passed the bill by a vote of 111-6.
The measure is designed to shed more than one-seventh of the policies to private insurers, retain existing rate caps, and internally improve the state-backed agency. SB 1770 creates an inspector general position, prohibits coverage for new structures closest to the beach, requires that policyholders sign a statement that acknowledges an understanding of their liability risk, and establishes a clearinghouse with the intention of shifting more than 200,000 of the least risky policies into private hands.
Governor Rick Scott has backed the clearinghouse and inspector general position to review inner workings of the agency.
Among the Senate proposals that were discarded when the House language replaced the Senate's: lifting of Citizens' exemption from bad faith litigation; requiring all non-residential policies to be actuarially sound; letting surplus line carriers – companies that are not required to have their rates approved by the Florida Office of Insurance Regulation – participate in the clearinghouse; requiring members of the Citizens board of governors to be confirmed by the Senate; and changing Citizens' president from a board of governors' appointment into an executive director position selected by the governor and chief financial officer.
- Mutual Insurance Companies: SB 356
SB 356 allows mutual insurance companies to conduct financial guaranty insurance business in Florida. Florida law previously limited such business to stock companies. To transact financial guaranty insurance in Florida, the insurer must have an initial surplus to policyholders of $50 million when initially licensed and maintain a surplus of at least $35 million. The insurer must also establish a specified contingency reserve, and meet other requirements. The measure was sponsored by Sen. Joe Abruzzo (D-Wellington). The bill passed in the Senate with a vote of 38-0 and in the House with a vote of 112-0.
To view a copy of PASSED SB 356, click here.
- Workers' Compensation Insurance / Drug Repackaging: SB 662
In the final weeks of Session, an agreement was reached between insurers (along with the business community) in the battle against doctors who dispense drugs to workers' compensation patients. Current law limits the amount pharmacies can charge for filling medications for injured workers, but until now, the limits did not apply to doctors.
SB 662 by Sen. Alan Hays (R-Umatilla) places a cap how much dispensing physicians can be reimbursed for repackaging or relabeling drugs in their offices to 112.5 percent of the average wholesale price (AWP), plus $8 for the dispensing fee. The bill also maintains the reimbursement rate for other prescription medications at AWP plus a $4.18 dispensing fee and provides that the average wholesale price is calculated by multiplying the number of units dispensed times the per-unit average wholesale price set by the original manufacturer of the underlying drug dispensed, based upon the manufacturer AWP published in the Medi-Span Master Drug Database as of the date of dispensing. An exception on the reimbursement rate would be made if the employer or insurance carrier (or a third party acting on their behalf) contracts directly with a physician for a lower reimbursement rate. Finally, the bill prohibits a dispensing physician from possessing these medications unless payment has been made to the supplying manufacturer, wholesaler, distributor, or drug repackager within 60 days of the dispensing practitioner taking possession of the medication.
It is estimated that this bill will reduce workers' compensation insurance costs by 0.7 percent or approximately $20 million based on preliminary 2012 statewide workers' compensation insurance premiums (insurers and self-insurers). If approved by the Governor, bill will take effect on July 1, 2013.
Major FAILED Legislation Which May Recur in 2014
- Personal Injury Protection (PIP) Repeal: SB 1888
A proposal that would have repealed the current no-fault auto insurance system and replaced that system with a requirement to maintain bodily injury coverage was not approved by the legislature. SB 1888 by Sen. David Simmons (R-Altamonte Springs) was advanced in response to a ruling made by a Leon County Circuit Judge on a challenge to the 2012 PIP law by a group of chiropractors and massage therapists. The judge found that the law could prevent accident patients from using PIP claims to pay for treatment by those providers. The judge also took issue with the law's lower limit of how much it will pay for non-emergency medical care. The judge's ruling is being challenged but a decision was not handed down before the end of session.
Had the judge's ruling been upheld, SB 1888 would have picked up steam for this Session. As such, we believe the issue will surface during the 2014 Session, depending upon the final ruling on the 2012 PIP law. The bill would have required a driver to maintain the following amounts of coverage:
- At least $10,000 in any one crash; and
- $25,000 for bodily injury or death in any one crash and $50,000 for bodily injury or death of two or more persons in any one crash.
To view a copy of FAILED SB 1888, click here.
- Elimination of Premium Tax Rebate: SB 1832
When Sen. Joe Negron (R-Palm City) took the chairmanship of the Senate Appropriations Committee, he asked members to do a thorough review of the programs funded by the state as well as tax breaks provided to various industries. Just before the halfway point of the Session, Sen. Negron put forth a proposal that would have eliminated a premium tax credit given to insurance companies in Florida in return for rolling back vehicle registration fees by $12. The fee increase was implemented in 2009 when the state's revenues were hit hard by the economic downturn.
Advocating for his proposal, SB 1832, Sen. Negron told members he would rather give money back to the Floridians who paid higher fees at a difficult time than to continue a rebate given to big businesses years ago as an incentive to come to the state. The measure won a quick approval by the full Senate; however, the House did not embrace the policy.
A House committee stripped the insurance rebate elimination language and changed the roll back in motor vehicle fees to a phase-in of the reduction. With the House and large insurers pitted against the Senate, the Chamber put the Negron language on a bill being pushed by the insurance industry – HB 635 by Rep. Katie Edwards (D-Sunrise) – and held up other insurance bills that remained unfinished. The House refused to take up the bill and the result was the demise of Negron's proposal and the pro-insurance package.
To view a copy of FAILED SB 1832, click here.
- Florida Hurricane Catastrophe (CAT) Fund: SB 1262 / HB 1107
The Florida Hurricane Catastrophe Fund (FHCF or Fund) is a tax-exempt trust fund created as a form of reinsurance for residential property insurers. The Fund reimburses (reinsures) insurers for a portion of their hurricane losses to residential property. Each insurance company writing insurance policies covering residential property or any policy covering a residential structure or its contents must participate in the FHCF. The deductible amount insurers must pay for reinsurance in the FHCF is set by statute and the maximum amount of coverage from the FHCF insurers can buy is also set by statute.
The goal of HB 1107 by Rep. Bill Hagar (R-Boca Raton) was to begin to restructure the FHCF to reduce the size and exposure of the Fund so that the Fund relies less on bonding and more on cash resources to pay its obligations to insurers. This would also result in a reduced likelihood and reduced amount of assessments against property and casualty policyholders. The measure centered around concern over a potential $1.7 billion shortfall in the Fund should a cataclysmic storm or number of storms affect its ability to pay claims.
Specifically, HB 1107 would have:
- Reduced the size of the mandatory coverage from $17 billion to $16.5 billion in 2014 and maintained the reduction for subsequent years;
- Extended the exemption for medical malpractice premiums from the FHCF assessment for another three years (until May 31, 2016) – This single provision was passed under SB 468 by Sen. Dorothy Hukill (R-Port Orange); and
- Changed the name of the Florida Hurricane Catastrophe Fund Finance Corporation to the "State Board of Administration Finance Corporation".
HB 1107 died on the House calendar, never receiving a Floor vote after passing its committees of reference. The proposal faced stiffer opposition in the Senate where its comparable measure, SB 1262 by Sen. Alan Hays (R-Umatilla), died in the Senate Appropriations Committee.
To view a copy of FAILED HB 1107, click here.
To view a copy of FAILED SB 1262, click here.
- Civil Remedies Against Insurers: HB 813 / SB 1284
Under current law, parties are authorized to bring a civil action against an insurer if the party is damaged by an insurer's "bad faith". This occurs when an insurer does not attempt in good faith to settle claims and, under the circumstances, could have acted fairly and honestly toward the insured and with due regard to his or her interest. Florida courts recognize a common law duty of good faith on the part of an insurer to the insured in negotiating settlements with third-party claimants. In addition, Florida statute recognizes a claim for bad faith against an insurer not only in the instance of settlement negotiations with a third party, but also for an insured seeking payment from his or her own insurance company.
HB 813, by Rep. Kathleen Passidomo (R-Naples), provided that before bringing an action under the statute or based on the common-law claim of bad faith, the insured, the claimant, or anyone acting on behalf of either the insured or the claimant must provide a written notice of loss to the insurer. If the claimant communicated with the insurer by another means, the insurer must ask that the claimant provide a written notice.
If the insurer timely provided a disclosure statement already required under current law and offered to pay the claimant the lesser of the amount the claimant was willing to accept or the policy's liability limit within 45 days, in exchange for a full release from liability, then the insurer was not in violation of a claim of bad faith.
HB 813 passed the House Civil Justice Subcommittee before dying in the Judiciary Committee. The bill's comparable companion, SB 1284 by Sen. John Thrasher (R-St. Augustine), never received a hearing.
To view a copy of FAILED HB 813, click here.
To view a copy of FAILED SB 1284, click here.
Legal / Justice / Claims
Major PASSED Legislation
- Expert Testimony: HB 7015
The passage of expert testimony legislation has been a multi-year battle between the business community and the plaintiff's bar. HB 7015 by Rep. Larry Metz (R-Groveland) was passed by lawmakers during the 2013 Session with a vote of 70-41 in the House and 30-9 in the Senate.
Currently, Florida follows the standard established in the case of Frye v. United States, 293 F.1013 (D.C.Cir 1923) to determine whether scientific and expert testimony could be admitted into evidence. In Frye, the court established a test regarding the admission of expert testimony requiring judges to determine whether an expert's testimony is based on a scientific principle or discovery that has gained "general acceptance" in the particular scientific field.
The Federal Rules of Evidence were formally promulgated in 1975 and adopted a different standard for the admission of expert testimony. Federal courts still continued to use the Frye standard until 1993, though, when the United States Supreme Court held in Daubert v. Merrell Dow Pharmaceuticals, 509 US. 579 (1993) that the Frye standard had been superseded by the Federal Rules of Evidence. This provides in relevant part that: "If scientific, technical, or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, and (3) the witness has applied the principles and methods reliably to the facts of the case".
HB 7015 was adopted this year to move the state to the "Daubert" standard, which provides a three-part test as quoted above in determining whether expert testimony can be admitted.
To view a copy of PASSED HB 7015, click here.
- VETOED: Dissolution of Marriage: SB 718
The Florida Legislature made substantial changes to laws affecting divorces in the state. SB 718 by Sen. Kelli Stargel (R-Lakeland) ends the concept of permanent alimony and also creates standards for alimony awards based on marriage length. Supporters of the bills, both male and female, Democrat and Republican, suggest the bill will add more fairness to alimony laws and that it will help end what has been called "gamesmanship" in divorces. Opponents say the bill will hurt divorced women who have given up careers to stay home and raise families. House members voted 85-31 to approve the bill, and the Senate voted 29-11 to pass the measure. The companion bill, HB 231, was filed by Rep. Ritch Workman (R-Melbourne).
Aside from modifications to alimony, the bill sets new legal standards based on lengths of marriages, and will apply retroactively to divorces that have been settled with alimony arrangements. Specifically, the bill creates a rebuttable presumption against any award of alimony for short-term marriages (lasting 12 years). Any monthly award following a short-term marriage is capped at 20 percent of the paying party's income. Next, the bill stipulates that no presumption applies for or against an award of alimony following mid-term marriages (lasting 12 years or more), unless the party seeking alimony proves the need for alimony by a preponderance of the evidence. Any monthly award following a mid-term marriage is capped at 30 percent of the paying party's income. Last, the bill applies a rebuttable presumption in favor of alimony for long-term marriages (those lasting 20 years or more), unless the party opposing alimony establishes by clear and convincing evidence that no needs exists. Any monthly award following a long-term marriage is capped at 33 percent of the paying party's income.
Additionally, the legislation establishes equal time-sharing and parenting responsibilities for divorced couples with minor children, which is deemed to be in the best interests of the child. The bill also removes "standard of living established during the marriage" provisions from the list of factors considered when awarding alimony and defines retirement as a substantial change in circumstances, which can cause termination or modification of an alimony award.
The bill was subsequently vetoed by Governor Rick Scott who stated that he could not support the bill "because it applies retroactively and thus tampers with the settled economic expectations of Floridians who have experienced divorce."
To view a copy of PASSED SB 718, click here.
To view a copy of Governor Scott's Veto Letter, click here.
- Eminent Domain: HB 179
HB 179, relating to eminent domain proceedings, was sponsored by Rep. Dana Young (R-Tampa). Eminent domain refers to the power of the government to take private property for a public use. Florida law allows state and local governments, and specified entities called "condemning authorities", to acquire title and possession of real property before eminent domain proceedings have concluded. The condemning authority must first deposit the estimated value of the property with the Clerk of the Circuit Court. Florida law provides that 90 percent of the interest earned on this deposit is paid to the condemning authority. HB 179, as passed, provides that 90 percent of interest earned is paid to the ultimate owner of the deposit, which may be either the property owner or judgment creditors. The bill was unanimously passed in the House with a 116 yea, 0 nay vote and in the Senate with a 40 yea, 0 nay vote. The bill has been signed by Governor Rick Scott and is effective July 1, 2013.
To view a copy of PASSED HB 179, click here.
- Medical Negligence Actions: SB 1792
SB 1792, by the Senate Judiciary Committee, makes key changes to procedures governing requirements for expert witnesses in medical malpractice lawsuits. The bill focuses on details of how malpractice cases are carried out, such as compelling expert witnesses that testify against doctors to be in the exact same field of practice, rather than a similar field. Current law allows expert witnesses to have similar specialties. Supporters of this provision feel that this ensures that witnesses have proper qualifications and experience to testify on the actions taken by physicians while opponents believe that the change is unnecessary and would reduce the pool of expert witnesses qualified to testify against doctors.
Another provision of the bill revises informal discovery procedures by authorizing the defendant and their insurer to conduct ex parte interviews of a claimant's treating health care providers. Such communications would happen outside the presence of the plaintiffs' attorneys. Critics feel that ex parte communications potentially violate doctor-patient confidentiality. Proponents of this portion of the bill think that interviews with treating physicians could yield information that would help resolve cases more quickly. A companion measure, HB 827, was sponsored by Rep. Matt Gaetz (R-Ft. Walton Beach). The bill passed on a 77-38 vote in the House and a 27-12 vote by the Senate.
- Mortgage Foreclosures: HB 87
Lawmakers in Florida responded to the backlog of mortgage foreclosure cases in the state by bringing forth a bill to expedite the process. Rep. Kathleen Passidomo (R-Naples) sponsored HB 87 to impose more requirements on judges, banks, and lenders involved with foreclosures. A companion measure regarding foreclosures, SB 1666, was filed by Sen. Jack Latvala (R-Clearwater).
Primarily, the bill shortens the time period that banks can collect losses from five years to one, requires banks to produce mortgage notes at the time of foreclosure, and allows lienholders, like a homeowner's association, to initiate the foreclosure process. Additionally, judges will be required to immediately review foreclosure filings in chambers without a hearing, before asking parties to show cause why a final judgment should be entered.
The House passed the bill with an 87-26 vote, and the Senate passed it with a vote of 26-13. Supporters of the bill feel that speeding up the foreclosure process means that properties will be put back on the market quickly, resulting in economic growth for the state. Opponents, however, believe that the bill does not make enough provisions to protect consumers who have lost their homes through fraud and that the bill will cause increased litigation.
To view a copy of PASSED HB 87, click here.
- Death Penalty Delays: HB 7083
State lawmakers gave approval to a proposal aimed at reducing delays in carrying out the death penalty, with supporters saying they want justice for victims' families --- but critics warning about executing innocent people. Sen. Joe Negron (R-Stuart), who sponsored the measure, said some inmates have been on death row for more than 30 years.
Senators voted 28-10 to approve the bill, HB 7083, which also passed the House by a vote of 84-34.
The bill focuses, at least in part, on ending delays in what is known as the "post-conviction" legal process, which starts after the Florida Supreme Court upholds death sentences in initial appeals. The post-conviction process can involve appeals about issues such as whether defendants have received ineffective legal representation.
Among other things, the bill seeks to ensure that attorneys have "actual" conflicts of interest before being replaced in death-penalty cases.
Also, the bill would take steps to prevent attorneys from representing death row inmates if the attorneys have had problems in earlier capital cases. The bill would bar lawyers from working on death-penalty cases for five years if courts have found that they provided deficient representation twice.
As of early March, Florida had 404 inmates on death row, with 155 in custody for more than 20 years, according to a House staff analysis. Ten had been on Death Row for more than 35 years.
To view a copy of PASSED HB 7083, click here.
Major FAILED Legislation Which May Recur in 2014
- Claims Bill Process Revision: HB 7123
At the request of House Speaker Will Weatherford (R-Wesley Chapel), a Select Committee on Claims was established during the 2013 Session to examine ways to simplify the claims bill process in Florida. However, the committee's work product, HB 7123, was only narrowly approved by the members and never reached a hearing in the Senate. The proposal would have increased dollar limits on lawsuits against local governments and changed the way the state compensates those injured by "sovereign" governments that have certain immunity from lawsuit damages.
Chairman of the committee, Rep. James Grant, (R-Tampa), said the system was broken and that the bill would give more certainty to local governments about their potential liability and fix what he described as an arbitrary claim bill process.
State law limits the potential liability of government agencies in lawsuits. Under current law, those limits are $200,000 or $300,000, depending on how many people are involved in an incident. People can go to the legislature to try to get a claims bill passed that requires local governments to pay more than those limits.
Specifically, the bill would have:
- Provided certain restrictions on persons lobbying a claims bill and required certain disclosures;
- Required a member of the related local legislative delegation to sponsor a local claims bill;
- Bifurcated the trial of a negligence lawsuit against a governmental entity; the jury would rule on liability; the judge would determine damages;
- Provided for certain damages awarded by the court to be paid immediately, allowing others to be put into trust and paid over time or by an annuity;
- Provided for certain damages held in trust to revert back to the governmental entity upon death of the claimant;
- Created an insurance option whereby local governments could avoid claims bills;
- Raised the caps on damages paid by local governments to $1,000,000 per person and $1,500,000 per incident; and
- Provided that the changes made by the bill to the waiver of sovereign immunity provisions applied to lawsuits brought after October 1, 2013.
To view a copy of FAILED HB 7123, click here.
- Inmate Reentry: HB 7121/ SB 1032
Several bills were filed this year aimed at breaking the cycle of recidivism and rehabilitating non-violent felons in the last three years of their sentences. SB 1032 by Sen. Thad Altman (R-Melbourne), who sat on the Senate Criminal Justice Committee, and HB 7121 by Rep. Dennis Baxley (R-Ocala), who chaired the House Judiciary Committee, sought to provide behavioral healthcare treatment services to non-violent, third degree felons to ready them for re-entry into society without compromising public safety. Senate leadership seemed skeptical about the approach of the measures from the beginning.
Primarily, these bills ensured that inmates who are born in Florida leave prison with identification cards or state issued birth certificates needed in order to acquire one. For non-Florida born inmates, both bills directed the Department of Corrections (DOC) to assist inmates in completing the necessary forms or applications to obtain a driver license or state identification card. To accomplish this, both measures waived the $9 fee DOH charges for a copy of a Florida birth certificate and the $25 fee the Department of Highway Safety Motor Vehicles (DHSMV) charges to issue a state ID card. Additionally, both bills required DOC to assist all inmates in applying for and obtaining social security cards. Further, they provided DOC with policy direction to expand its Faith- and Character-Based Institutions (FCBIs) to serve both male and female inmates at their respective institutions.
Another key provision of each bill directed DOC to establish and administer a reentry program for nonviolent, drug offenders who are sentenced to the program by a court. Offenders were required to meet certain criteria to be eligible. The sentence to the program is a conditional split sentence; containing both a term of incarceration that includes substance abuse treatment followed by a period of drug offender probation.
Once sentenced to the program by a judge, DOC would place the inmate into a substance abuse treatment program towards the end of the incarceration portion of the inmate's sentence. If the inmate successfully completed the substance abuse program, he or she would then serve the drug offender probation component of the sentence per the court's order. If the inmate failed to complete the in-prison treatment program, his or her probation sentence would become a term of incarceration. DOC was directed by both bills to remove an inmate from the reentry program if the inmate committed a violent act, could not complete the program for medical reasons, the sentence was modified or expired, the inmate was reclassified, or removal was in the best interest of the inmate or the security of the institution.
Both bills received numerous committee hearings before each chamber but failed to reach final passage. Two additional bills relating to inmate reentry, HB 69 by Rep. Daphne Campbell (D-Miami) and SB 1704 by Sen. Geraldine Thompson (D-Orlando), were not heard in committee.
To view a copy of FAILED SB 1032, click here.
To view a copy of FAILED HB 7121, click here.
- Death Penalty / Unanimous Jury: SB 148 / HB 961
SB 148 by Sen. Thad Altman (R-Melbourne) made four changes to the death sentencing law in Florida. The bill required that:
- If the jury is going to recommend the death penalty, the jury must first find that sufficient aggravating circumstances exist that are not outweighed by mitigating evidence;
- The jury must agree by a unanimous vote on any aggravators which support the jury's death recommendation;
- The jury vote on the aggravating circumstances must be recorded on a special verdict form; and
- The jury must also agree unanimously to recommend the death penalty. Currently a jury must agree by a simple majority to recommend a death sentence.
The Senate measure died in its first committee of reference. The bill's identical House companion, HB 961 by Rep. Mark Pafford (D-West Palm Beach), never received a hearing.
Of the 33 states that impose the death penalty, only Florida and Alabama do not require a unanimous vote of the jury. Alabama does require a supermajority, however.
To view a copy of FAILED SB 148, click here.
- Application of Foreign Law in Certain Cases: HB 351 / SB 58
Rep. Larry Metz (R-Groveland) introduced HB 351 which prohibited use of any other nation's laws in Florida courts if they did not afford the same constitutional protections as state and federal constitutions. The bill allowed partners in a business or couples in a divorce the opportunity to voluntarily abide by the laws of their countries or rules of their religions that affected property or personal rights. According to the sponsor of the bill, the measure applied only to foreign law in state family court, did not target specific religions, and would not invalidate foreign marriages. The companion measure, SB 58, was sponsored by Sen. Alan Hays (R-Umatilla). The bill received a 79-39 vote in the House and was not read a third time by the Senate, where it died.
To view a copy of FAILED HB 351, click here.
To view a copy of FAILED SB 58, click here.
Various Bills of Interest
Major PASSED Legislation
- K-20 Education Reform: SB 1076
The Legislature passed a sweeping education bill aimed at recasting requirements for high-school diplomas and laying out the standards for state universities to reach "preeminent" status. SB 1076, by Sen. John Legg (R-Lutz), creates two designations for high school degrees, each with different requirements, with one aimed at encouraging students to work toward industry certification.
The measure revises educational programs and creates certain funding incentives to increase the likelihood that educational programs in Florida's public schools, colleges, and universities will better prepare students for future occupations and careers. The bill fosters students' development of technology skills in prekindergarten through grade 12 and increases opportunities for students to earn industry certifications in high school and college in over 200 different professions, occupations and careers. Financial literacy will be included in high school graduation requirements, as part of a required credit in economics, with an emphasis on entrepreneurship in the career education and planning courses in middle school.
The bill requires the development of recognitions and certificates that will be earned by elementary and middle school students as they develop technology skills and knowledge. Students with disabilities must be provided access to technology applications in prekindergarten through grade 12.
Two recognitions for elementary school students, the Florida Cyber Security Recognition and the Florida Digital Arts Recognition, will be developed by technology companies that have approved certifications on the Industry Certification Funding List or the Postsecondary Industry Certification Funding List. The recognitions will be provided by the Department of Education (DOE) to school districts at no cost, and made available for elementary school students at the option of the school district. Bonus funding is authorized for schools in which students earn the recognitions. The developers of the recognitions must provide technical assistance and training for teachers, and model policies for school districts.
By December 2013, the DOE must contract with a company or companies that provide certifications that are on the Industry Certification Funding List under s. 1003.492, F.S., to develop the Florida Digital Tools Certificate for middle school students, which will indicate that a student has mastered digital technology skills that he or she will need for future academic work and future employment.
The bill designates three areas for university performance funding: computer and information technology; high-demand programs as identified by the Board of Governors (BOG) using a gap analysis; and cloud virtualization and related large data management. The BOG is directed to create metrics that let Floridians know how well state universities and colleges are doing. Items such as percent of graduates employed or enrolled in further education, average wages of employed graduates and average cost per graduate will be included. Standards are outlined for universities to be recognized as "preeminent universities," with one of those schools being tapped to operate an online institute in an effort to encourage Internet-based education. It also authorizes universities to do what is needed to offer the $10,000 degrees that Governor Rick Scott has touted.
Additionally, this legislation assists adult education students complete "Action Steps to Employment" which will help accelerate their employment following graduation and increases the number of adult education students who are prepared for postsecondary education and employment.
The measure has been praised by business groups and educators, in part, because it would free students who choose one of the designations from being required to pass some courses -- such as Algebra II -- that are aimed at college-bound students. Business groups also say the bill will more closely tie the education system to employers' needs.
The proposal received overwhelming support in the legislature, with the Senate approving it 33-7 and the House signing off unanimously.
To view a copy of PASSED SB 1076, click here.
- Transparency in State Contracting: HB 5401
The legislature approved HB 5401, by the Government Operations Appropriations Subcommittee, which is designed to increase transparency within the state's contracting practices. The bill requires a single website to be created through which all other websites may be accessed. It also requires websites to be created to retain and track state employee and officer data and state fiscal planning data. Further, the Chief Financial Officer is required to establish and maintain a secure contract tracking system to provide public access to Florida's state contract management system.
Within 30 calendar days after executing a contract, each state entity must post the following information relating to the contract on the tracking system: (1) the names of the contracting entities; (2) the procurement method; (3) the contract beginning and ending dates; (4) the nature or type of the commodities or services purchased; (5) applicable contract unit prices and deliverables; (6) total compensation to be paid or received under the contract; (7) all payments made to the contractor to date; (8) applicable contract performance measures; and (9) if a competitive solicitation was not used to procure the goods or services and justification of such action. Contract is defined as a written agreement or purchase order issued for the purchase of goods or services or a written agreement for the receipt of state or federal financial assistance.
Further, by January 1, 2014, each state agency must post the required information for each existing contract that was executed before July 1, 2013, with payment from state funds made after June 30, 2013. Finally, the bill exempts the Department of Agriculture and the Department of Legal Affairs from posting contract information on this tracking system. Instead, these departments must post the information on their own agency-managed website. If it becomes law, the bill will take effect on July 1, 2013.
To view a copy of PASSED HB 5401, click here.
- Publicly-Funded Defined Benefit Retirement Plans: SB 534
SB 534 by Sen. Jeff Brandes (R-St. Petersburg) explicitly provides that the state is not liable for obligations relating to financial shortfalls in any local government retirement plan. The bill also eliminates a requirement for a retirement system or plan to report present value information, as adopted by the Financial Accounting Standards Board, using the Florida Retirement System (FRS) assumed rate of return. Further, it requires additional reporting for all publicly-funded defined benefit retirement plans other than the FRS. Plans that fail to timely submit the required information within 60 days after receipt of the plan's actuarial report will be deemed to be in noncompliance and the Department of Management Services (DMS) may notify the Department of Revenue (DOR) and Department of Financial Services (DFS) of the noncompliance. Those agencies must withhold funds payable to the plan sponsor, which are not pledged towards bond debt service. The bill gives plan sponsors administrative rights if these actions are taken.
The following is information that must be submitted to DMS annually, within 60 days after receipt of the certified actuarial report submitted after the close of the plan year that ends after June 30, 2014, and thereafter in each year in which an actuarial valuation of the plan is done:
- Annual financial statements in compliance with the requirements of the Governmental Accounting Standards Board (GASB) Statement No. 67 Financial Reporting for Pension Plans and Statement No. 68 Accounting and Financial Reporting for Pensions using RP-2000 Combined Healthy Participant Mortality Tables, by gender, with generational projection by Scale AA. Annual financial statements similar to GASB, but which use an assumed rate of return and assumed discount rate 200 basis points less than a plan's assumed rate of return.
- The number of months or years for which the current market value of assets is adequate to sustain the payment of expected retirement benefits.
- The recommended contributions to the plan based on financial statements stated as an annual dollar value and a percentage of valuation payroll.
If signed by the Governor, the bill will take effect on July 1, 2013.
- Procurement of Commodities and Contractual Services: HB 1309
The Department of Management Services (DMS) is responsible for maintaining uniform rules for and overseeing agency procurement, as well as negotiating statewide contracts to leverage the state's buying power. The Chief Financial Officer (CFO) is responsible for setting and approving accounts against the state and keeping all state funds and securities. HB 1309 by Rep. Ben Albritton (R-Bartow), approved on the final day of the Session, revises provisions governing state agency procurement and contracting which includes:
- Requiring agencies to upload contracts and related information into the Florida Accountability Contract Tracking System;
- Requiring agencies to appoint grant managers and requiring those managers responsible for agreement in excess of $35,000 to obtain training for accountability in contracts and grant management;
- Requiring that invitations to bid be awarded to the lowest responsive bidder;
- Permitting DMS to lead joint agreements with governmental entities; and
- Removing the requirement that an agency head certify emergency procurement documents.
If the bill becomes law, it will take effect on July 1, 2013.
- Texting While Driving Ban: SB 52
A long sought measure to ban texting while driving in Florida passed the legislature this Session without the resistance seen in earlier years. The measure, SB 52 by Sen. Nancy Detert (R-Venice), was approved by the Senate 39-1 and passed the House with a vote of 110-6.
Previously, Florida was one of only five states without a texting ban.
The legislation makes texting while driving a secondary offense, meaning drivers would have to be pulled over for something else before they could get a ticket for texting.
A first violation is punishable as a nonmoving violation, with a fine of $30 plus court costs that vary by county. A second violation committed within 5 years after the first is a moving violation that is punishable by a $60 fine plus court costs.
Specifically, the bill prohibits the operation of a motor vehicle while manually typing or entering multiple letters, numbers, symbols, or other text in a handheld wireless communication device, or sending or reading data in the device, for the purpose of non-voice interpersonal communication. The bill makes exceptions for emergency workers performing official duties, reporting emergencies or suspicious activities, and for receiving various types of navigation information, emergency traffic data, radio broadcasts, autonomous vehicles, and for stationary vehicles. The bill also makes an exception for interpersonal communications that can be conducted without manually typing the message or without reading the message, including hands-free technology.
In addition to the fines, a violation of the unlawful use of a cell phone which results in a crash will result in 6 points added to the offender's driver's license record and the unlawful use of a cell phone while committing a moving violation within a school safety zone will result in 2 points added to the offender's driver license record in addition to the points for the moving violation.
The House voted 73-46 to add an amendment to the bill that allows the billing records of drivers' cell phones or other devices to be used to prosecute them for violations only if a death or injury has happened.
Legislators have struggled to advance the proposal in past sessions. The measure never got through a Senate committee in previous years. And in the House, the bill found opposition over the issue of infringing on personal liberties.
- International Driving Permits: HB 7059
Moving rapidly to reinforce the state's tourism-friendly image, lawmakers approved HB 7059 by Rep. Daniel Davis (R-Jacksonville) during the fourth week of Session that repealed a law causing confusion about whether international visitors needed additional permits to drive in Florida.
The original law, passed last year, called for foreign visitors to obtain international diving permits to be able to drive while visiting Florida. Those permits would be required in addition to the person's driver's license. The onus behind the change was to assist Florida law-enforcement officers in sorting out traffic incidents, especially those involving international visitors who don't speak English.
But the law, which took effect January 1, created confusion with foreign visitors because these special permits could only be obtained in the person's home country. As such, the law put tourist-based companies, such as rental car companies, in the position of turning away these visitors or violating the law. Further, state officials said the law violated an international treaty called the Geneva Convention on Road Traffic. As such, the Department of Highway Safety and Motor Vehicles asked that the Florida Highway Patrol, the Florida Police Chiefs Association and the Florida Sheriffs Association not enforce the international driving permit requirement until a remedy could be made.
Lawmakers in both Chambers pushed the repeal quickly through committee before taking it to the House and Senate floors for final passage on March 27. Eight days later, Governor Rick Scott signed HB 7059 into law.
To view a copy of passed HB 7059, click here.
- Searches and Seizures / Drone Limit: SB 92
SB 92 by Sen. Joe Negron (R-Stuart) creates the "Freedom from Unwarranted Surveillance Act". The measure prevents law enforcement use of unmanned aerial drones unless a judge has issued a warrant, or in cases where there is a "high risk of terrorist attack," or a case of imminent danger, such as in a missing person case where the person is thought to be in immediate danger. The similar House companion, HB 119 by Rep. Ritch Workman (R-Melbourne), and the Senate bill both passed their respective Chambers unanimously.
Backers have said that the technology, because it is easy and cheap to deploy, could be tempting for police to use for simply watching crowds – giving rise to the sponsors' interest in enacting limits on their use.
To view a copy of PASSED SB 92, click here.
Major FAILED Legislation Which May Recur in 2014
- State Technology: SB 1762 / HB 5009
Efforts to consolidate the state's information technology (IT) functions failed when the House and Senate were unable to reach an agreement, due to philosophical differences over the potential agency's, or department's jurisdiction and duties, along with concerns about the cost of consolidating IT functions. The failure of this effort comes for a second year in a row. Lawmakers passed a House proposal last year, only to see it vetoed by Governor Scott, who said he worried it could be adverse to incentivizing business change.
Both of this year's bills sought to abolish the defunct Agency for Enterprise Information Technology (AEIT). The differences between the Senate and House versions were found in the philosophies of both Chambers concerning the scope of duties of the AEIT's proposed successor.
SB 1762 by Sen. Jeremy Ring (D-Margate) proposed the creation of a Department of State Technology (DST). The Senate bill substantially revised how the state organizes and operates its resources through the creation of a DST that would develop best practices and have a say in agencies' IT decisions, including eventually taking part in the IT purchasing process. This department would have been an executive agency, housed under the Governor. All of the duties formerly performed by AEIT and all technology and telecommunications duties of the Department of Management Services (DMS) would have been transferred to the DST.
Rep. Seth McKeel's (R-Lakeland) HB 5009 sought the creation of the Agency for State Technology (AST). He and House leaders wanted this entity to fulfill a more advisory role, which was in direct contrast to the Senate's desire for a fully functioning IT Department.
The House bill would have authorized a type two transfer of all records and property, unexpended balances of appropriations, administrative authority, pending issues, and existing contracts of the AEIT to the AST. The agency would have been housed within the Executive Office of the Governor with the head of the agency being the Governor and Cabinet, with an executive director who would have served as the state's Chief Information Officer, appointed by the Governor and confirmed by the Cabinet and the Senate. Duties of the AST would have included developing and administering a comprehensive long-range plan, developing and implementing information technology architecture standards, developing a strategic business plan for implementing a successor financial and cash management system and providing operational management and oversight of the state data center.
Sen. Jeremy Ring argued countless times that Florida is a $74 billion business with no IT department, attempting to sway opponents. House members cited the failed State Technology Office, which was initiated when Jeb Bush was Governor, as another reason for disliking the Senate's plan. Many felt that efforts to consolidate moved at too rapid a pace, leading to the office's ultimate demise.
In the end, neither side prevailed as both bills were referred to the budgetary conference committees, but were never directly addressed in that forum.
To view a copy of FAILED SB 1762, click here.
To view a copy of FAILED HB 5009, click here.
- Vehicle Tag Registration: SB 1832
When Sen. Joe Negron (R-Palm City) took the chairmanship of the Senate Appropriations Committee, he asked members to do a thorough review of the programs funded by the state as well as tax breaks provided to various industries over the years. Just before the halfway point of the Session, Sen. Negron put forth a proposal that would have eliminated a premium tax credit given to insurance companies in Florida in order to roll back vehicle registration fees by $12. The fee increase was implemented in 2009 when the state's revenues were hit hard by the economic downturn.
Advocating for his proposal, SB 1832, Sen. Negron told members he would rather give money back to the Floridians who paid higher fees at a difficult time than to continue a rebate given to big businesses years ago as an incentive to come to the state. The measure won quick approval by the full Senate; however, the House did not embrace the policy.
A House committee stripped the insurance rebate elimination language and changed the roll back in motor vehicle fees to a phase-in of the reduction. With the House and large insurers pitted against the Senate, the Chamber put the Negron language on a bill being pushed by the insurance industry – HB 635 by Rep. Katie Edwards (D-Sunrise) – and held up other insurance bills that remained unfinished. The House refused to take up the bill, and the result was the demise of Negron's proposal and the pro-insurance package.
To view a copy of FAILED SB 1832, click here.
- Florida Retirement System (FRS): HB 7011 / SB 1392
House Speaker Will Weatherford pegged pension reform as a priority before the start of the Session. HB 7011 by Rep. Jason Brodeur (R-Sanford) would have closed the Florida Retirement System (FRS) to newly-hired public employees after January 1, 2014, and would have required them to join a 401(k)-style investment plan. The measure drew strong opposition from the unions and Democratic lawmakers who asserted that changes to the system were not needed.
As a result, Sen. Wilton Simpson (R-Trilby) provided alternative language in SB 1392, which would have allowed rank-and-file employees to continue joining the FRS "defined benefit" plan with a fixed monthly pension at the end of their careers, but would have provided financial incentives for opting into the "defined contribution" plan. The House remained unwilling to accept the Senate proposal, but when Sen. Simpson offered an amendment that would have made the Senate version more similar to the House measure, the vote was 22-18 against the language.
To view a copy of FAILED HB 7011, click here.
To view a copy of FAILED SB 1392, click here.
- Parent Empowerment in Education (Parent Trigger Bill): HB 867 / SB 862
For the second year in a row, the Parent Empowerment in Education bill failed.
The Senate rejected, on a tie vote, a controversial bill that would have given parents the ability to register their wishes with a district that's choosing how to turn around failing schools.
The 20-20 vote was a mirror image of a Senate deadlock last year on the so-called "parent trigger" bill, which would allow parents to sign petitions in favor of a particular turnaround option for schools that draw an "F" on state report cards for two straight years.
HB 867, by Rep. Carlos Trujillo (R-Doral), and SB 862, by Sen. Kelli Stargel (R-Lakeland), would have enabled parents, by petitioning the school district, to request implementation of a parent-selected turnaround option when a school is required to select a turnaround option. The option requested by parents would have had to be considered for implementation by the district school board at a publicly-noticed meeting if the petition was signed and dated by a majority of the parents of students enrolled in the school or students who were scheduled for assignment to the school in the following school year.
The district school board would have had the discretion to adopt the turnaround option selected by parents, or a different option selected by the school board. If the district school board did not adopt the parent-selected option, it would have had to include that option with the implementation plan, as submitted, to the State Board of Education. The state board could have approved the district's plan or, if it determined that the parent-selected option was more likely to improve student performance at the school, they could have required the school board to submit a plan for implementing the parent-selected option. However, if the school had improved by at least one letter grade, the school would have no longer had to implement the turnaround option.
This bill would have provided the lowest performing schools with the most comprehensive interventions. If such a school did not improve by one letter grade during the first year of intervention, the school district would have been required to implement a school turnaround option at the beginning of the next school year. If the school did not improve at least one letter grade after two years of implementing the turnaround option, the school district would have been required to submit a plan for implementing a different option at the beginning of the next school year. No process presently exists that requires school districts to consider implementation of a parent-selected turnaround option.
HB 867 would have created new requirements for school districts and charter schools regarding the assignment of students to classroom teachers. The bill prohibited consecutive student assignments to teachers with an annual performance evaluation rating of unsatisfactory or needs improvement and required that parents of students assigned to an out-of-field or chronically low-performing teacher be informed of the availability of virtual instruction delivered by an in-field, high-performing teacher.
Opponents said the bill would have allowed privately-owned for-profit charter school companies to swoop in and take over failing schools. Supporters insisted that the bill would not make it easier for charter management companies to get control of public schools, and highlighted the bill's attempts to empower parents.
The defeat was a major setback for former Gov. Jeb Bush's Foundation for Florida's Future, which has strongly backed the measure. It was a victory for teachers unions, parent groups and Democrats, who had largely opposed it.
To view a copy of FAILED HB 867, click here.
To view a copy of FAILED SB 862, click here.