FEDC Inside Track For Legislative Affairs: Florida Legislative Session Nearing Halfway Mark
Mar 30, 2010
Above: State Representative Will Weatherford, R-Wesley Chapel (right), confers with Rules and Calendar Council Chair, State Representative Bill Galvano, R-Bradenton, during a floor session on March 23, 2010. Representative Weatherford is the sponsor of HB 1509, which relates to economic development incentives. (House photo by Meredith Geddings)
The halfway point of the 2010 Florida Legislative Session is drawing closer. Due to the Easter and Passover holidays, the Legislature will convene only on Wednesday (March 31) and Thursday (April 1) of this week, and will focus almost exclusively on the State budget.
On March 31, the Senate and House will convene at 10 a.m. and noon respectively to consider their budgetsand more than two dozen conforming and implementing bills that would alter Florida law in order to carry out budget provisions. Passing an annual balanced budget is the only constitutionally mandated action required of the Florida Legislature.
The Senate’s budget spends close to $69 billion, while the House’s version is approximately $67.6 billion. One key difference between the two is that the House includes a 3 percent pay cut for state employees, while the Senate version leaves state worker pay unchanged for the fourth consecutive year.
The Senate budget bill, however, would require approximately 27,000 upper-level state employees — including lawmakers — who presently receive free health insurance to begin paying a portion of their premiums.
Another difference between the two budgets is the Senate’s inclusion of $435 million in Seminole Indian gaming money that does not appear in the House bill.
The two chambers are explected to go into budget conference in April, during which these differences will be reconciled.
BUDGET
Below, please find information on the economic development-related components of the House and Senate budgets.
Senate Budget
Transportation Road Fund–$20,000,000
Quick Action Closing Fund–$12,000,000
Economic development tools–$16,281,400
(Incentive programs such as Qualified Target Industries (“QTI”)
Innovation Incentive Program–$18,978,412
Enterprise Florida operational funding–$9,900,000
Film and entertainment incentives–$0
Military base protection–$150,000
Rural community development–$1,300,000
Space, rural and defense infrastructure–$1,000,000
Space Florida–$3,839,943
Small Business Development Center–$0
Quick Response Training–$0
Total Senate expenditure on economic development projects: $113,353,803
House Budget
Transportation Road Fund–$20,000,000
Quick Action Closing Fund–$12,000,000
Economic development tools–$21,407,000
(Incentive programs such as QTI)
Innovation Incentive Programs–$0
Enterprise Florida operational funding–$11,100,000
Film and entertainment incentives–$11,253,296
Military base protection–$150,000
Rural community development–$1,300,000
Rural and defense infrastructure–$1,700,000
Space Florida–$3,839,943
Small Business Development Center–$500,000
Quick Response Training Program–$3,300,000
Total House expenditure on economic development projects: $119,161,075
BILL UPDATE
Following is a summary of economic development-related bills that progressed through the legislative process this week:
CS/SB 1856 Relating to the QTI Tax Refund Program by the Senate Committee on Commerce
The QTI Incentive Tax Refund Program, which sunsets on June 30, 2010, was created in 1994 as part of Florida’s economic development efforts. Designed to encourage the recruitment or creation of higher-paying, higher-skilled jobs for Floridians, it awards eligible businesses with refunds of certain state or local taxes that are paid in exchange for creating these jobs. The amount of the QTI refund is based on the wages paid, number of jobs created and where the eligible business chooses to locate or expand within the State of Florida. The minimum refund is $3,000 per employee over the term of the incentive agreement.
CS/SB 1856, which would be effective on July 1, 2010, makes numerous changes to the QTI program. These include:
- Extending the QTI program until June 30, 2015;
- Directing the Governor’s Office of Trade, Tourism and Economic Development (“OTTED”) to begin a post-award evaluation of QTI projects;
- Directing OTTED and EFI to review and revise the Targeted Industry List every three years, with assistance from academics and stakeholders;
- Codifying Enterprise Florida Inc.’s (“EFI’s”) practice of calculating a return on investment (“ROI”) for QTI projects, as well as creating a definition of “ROI;”
- Requiring the Florida Legislature’s Office of Economic and Demographic Research (“EDR”) to review and evaluate the methodology and model used by EFI to calculate the ROI and report its findings to the Legislature; and
- Exempting renewable-energy economic development projects from the requirement that qualified target industries must be independent of Florida resources and markets.
Upon being considered by the Senate Committee on Commerce, a substantial number of amendments were adopted to CS/SB 1856. One removes the deletion of ad valorem taxes from the types of taxes that may be refunded under the program. The other reauthorizes use of the statewide private sector average wage when calculating private sector wages. Given these two changes, the bill is now strongly supported by the Florida Economic Development Council.
As amended, CS/SB 1856 was passed unanimously as a committee substitute by the Committee on Commerce. It must be heard next by the Senate Committee on Finance and Tax.
HB 7109 Relating to Tax Refund Program for QTI Businesses by the Economic development Policy Committee. The companion bill is SB 1856. This bill awaits hearing by the House Economic Development and Community Affairs Policy Council.
CS/SB 1646 Relating to Regional Workforce Boards by the Senate Committee on Transportation and Economic Development Appropriations and Senator Mike Fasano
SB 1646 would prohibit regional workforce board members and their relatives from contracting with, or having a financial interest in a contract with the board on which the member serves. The bill also requires a member who is employed by, or who receives remuneration from a contracting entity to abstain from voting on a contract with that entity.
SB 1646, which passed unanimously out of the Committee on Transportation and Economic Development Appropriations, as well as the Policy Committee on Ways and Means, has been placed on the Senate Special Order Calendar for second reading on March 31.
While SB 1646 does not have a House companion, it has been filed as a budget conforming bill in the Senate and will most likely become an issue addressed during the budget conference committee process.
CS/SB 1752 Relating to Economic Development by the Senate Policy and Steering Committee on Ways and Means and Senator Don Gaetz
Entitled “Jobs for Florida,” SB 1752 is the Senate’s economic development package that is partially based on concepts collected during the statewide Jobs Summit, which was held in Orlando during January 2010.
In an effort to help create Florida-based jobs, CS/SB 1752 would amend statutes relating to several Florida business tax exemptions and tax credits, the QTI incentive program and other economic development-related laws.
The bill also would create:
- Tax credits for employers who hire jobless Floridians
- A matching grant program for new research and development companies to draw down federal funds that assist in commercializing their discoveries
- Opportunities to reduce regulatory impediments on businesses seeking permits or extensions of development orders.
CS/SB 1752 prompted hours of questions and debate in both the Policy Committee on Ways and Means and on the Senate floor, inasmuch as a number of Democrats, along with Republican Senator Evelyn J. Lynn, were concerned about the high cost of the bill, which they felt was difficult to justify during these constrained budget years.
Saying that the funds needed to pass this legislation should be viewed as “seed money” for enhancing Florida’s economy, Senator Gaetz defended his proposal, explaining that the potentially large return on investment made the expenditure necessary. Ultimately, the bill was approved unanimously.
To view a legislative analysis of CS/SB 1752, click here.
While there is no particular bill pending in the House that is viewed as a companion to SB 1752, there are a number of individual bills in progress that are expected to be combined into an appropriate companion proposal once they reach the House floor.
Some of those bills include: HB 173, CS/CS/HB 697, HB 711, CS/HB 969, CS/CS/HB 983, CS/HB 1239, HB 1347, CS/HB 1389, CS/HB 1509, H 7099, H 7109, H 7169 and H 7201
HB 1509 Relating to Economic Development by the House Economic Development Policy and State Representative Will Weatherford
After being passed unanimously as a committee substitute by the House Economic Development Policy, CS/HB 1509 now awaits hearing by the Finance and Tax Council.
The bill amends several sections of law related to economic development incentives, tax credits, grants, and exemptions. It also extends certain building permits for an additional year.
CS/HB 1509 provides the Governor’s Office of Tourism, Trade, and Economic Development (“OTTED”) with the authority to renegotiate contracts with businesses that have received Quick Action Closing (“QAC”) Funds, are experiencing negative market conditions and wish to revise their agreements.
The bill also revises the QTI Tax Refund Program by allowing an additional credit for business in the High-Impact Business (“HIB”) sector, and by allowing waiver of average wage criteria for a manufacturing project.
Through the provisions of CS/HB 1509, the Capital Investment Tax Credit is revised by lowering the job creation and investment requirements, and by changing the type of business eligible from those in the HIB sector to qualified target industry businesses. Further, the bill revises the HIB incentive by lowering job creation and investment requirements and revising grant amounts that may be awarded.
The bill also allows Rural Regional Development matching grants to be used for technical assistance to businesses in the rural community. Subject to appropriation, authority is given to the Institute for Commercialization of Public Research to make seed fund grants to businesses, which must then raise matching funds to receive the money. .
It also clarifies how an economic development ad valorem tax exemption may be extended.
Should you have any questions or comments, please contact Tracy Mayernick (tmayernick@cftlaw.com) at Colodny Fass.
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