FEDC Inside Track for Legislative Affairs: Florida’s 2010 Legislative Session Begins
Mar 16, 2010
Above: Speaker Larry Cretul (R-Ocala), left, and Speaker pro tempore Ron Reagan (R-Sarasota) man the House rostrum as the 2010 Legislature began its first of 60 days on March 2, 2010. (House photo by Mark Foley)
With the Senate and House of Representatives announcing that their respective proposed budgets would be released in three weeks, Florida’s 2010 Regular Legislative Session began on May 2 at a whirlwind pace.
Following is a recap of the Session’s first two weeks and an outline of what can be expected in the 60 days ahead.
House Session Schedule
In a memorandum to Legislators, House Speaker Larry Cretul outlined highlights of his Chamber’s timeline (which is subject to change):
- House Committees must complete their consideration of legislation before March 26 (Weeks One through Four).
- During Week Five, which falls in between Passover and Easter (March 29 through April 2), the General Appropriations Act (“GAA”) will be considered on the House floor, along with implementing and conforming bills. Second Reading of the House GAA and any conforming and implementing bills will take place on March 31, 2010, with Third Reading being completed on those bills by April 1, 2010.
- During Weeks Six and Seven (April 5-16), House Councils will complete their consideration of legislation.
- The GAA conference report will be delivered no later than April 27 (Week Nine) in time for a final vote and “Sine Die” (Session conclusion) on April 30.
FEDC Joins Economic Developers in Legislative Briefing
Leaders from Florida’s economic development community recently testified to members of the House Economic Development and Community Affairs Council that Florida-based “economic gardening” technical assistance programs are beginning to “bear fruit” and should be expanded.
Funded during a 2009 Special Legislative Session, the Florida Economic Development Act created a $1.5 million fund for economic gardening, a process that focuses on the support of second-stage companies-those that have grown past the startup stage.
In November, 2009, the Governor’s Office of Tourism, Trade and Economic Development (“OTTED”) selected a University of Central Florida team that created the Florida Economic Gardening Institute. The purpose of this organization is to administer a statewide technical assistance program for second-stage growth companies.
“Though only in its fifth month, this economic development tool has proven to be a tremendous success to business,” said Florida Economic Development Council (“FEDC”) President and CEO Amy Evancho.
House Economic Development and Community Affairs Council Members appreciated this update and will now be looking at ways to perpetuate the program.
Budget
For Fiscal Year 2010-2011, the Florida Legislature is expecting another decrease of $2 to $3 billion in revenues. It is widely speculated that no new revenue will be sought, due to 2010 being an election year. Rather, reductions will be made in state government and spending in order to cover the large deficit.
Recently, budget committee chairmen released their draft budget proposals. The Senate Transportation and Economic Development Appropriations Committee reviewed a proposed budget on March 10 and Chairman Mike Fasano is expected to pass it out of his committee during this week.
Below, please find information on the economic development-related components of Chairman Fasano’s proposed 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 $21,521,326
Enterprise Florida operational funding $9,900,000
Film and entertainment incentives $0
Military base protection $0
Rural community development $1,300,000
Space, rural and defense infrastructure $1,000,000
Space Florida $3,839,943
Small Business Development Center $0
Total spent on economic development projects: $113,353,803
Also on March 10, the House Transportation and Economic Development Appropriations Committee released a draft of Chairman Richard Glorioso’s House budget proposal. At that time, Committee members had an opportunity to ask questions. This week, they will be given additional time to submit suggestions as they work toward the goal of passing a final budget out of the Committee by March 17.
Chairman Glorioso stated that funding for the OTTED budget would be maintained from Fiscal Year 2009-2010. There were no reductions in the House OTTED budget, aside from a $1.25 million trust fund reduction due to a decline in rental car surcharge revenues, a reduction of $586,000 for Enterprise Florida and a $667,000 reduction for VISIT Florida.
Transportation Road Fund $20,000,000
Quick Action Closing Fund $12,000,000
Economic development tools $21,407,000
(Incentive programs such as QTI)
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
Total spent on economic development projects: $119,161,075
Workforce Florida Update – Information in this segment is provided by Workforce Florida
The Senate’s proposed budget includes no funding for the Quick Response Training (“QRT”) Program, while the House, by proposing $3.3 million for the same program, has maintained its funding at 2009 levels.
Since its inception, the QRT Program has awarded more than 300 grants to Florida businesses to train nearly 82,000 Floridians. An analysis by the Florida Educational and Training Placement Information Program shows that QRT trainees experienced an average wage increase of 116 percent one year after completing training. ​
Workforce Florida’s operations are fully funded by both the Senate and House in their proposed budgets.
Economic Development Legislation
SB 1752 Relating to Economic Development by Senator Don Gaetz
SB 1752 would increase the amount of tax refund payments available to pay the State of Florida’s share of refunds under the Qualified Defense Contractor and Space Flight Business Tax Refund Program and the tax refund program for QTI businesses.
Scheduled for consideration during the March 18 Senate Policy and Steering Committee on Ways and Means, SB 1752 is expected to be amended with language from Senator Gaetz’s “Jobs for Florida” proposal. If passed, this bill will become the Senate’s economic development package.
SB 1856 Relating to Qualified Target Industry Tax Refund Program by the Senate Committee on Commerce
If passed, SB 1856 would provide legislative findings and declarations for the tax refund program for QTI businesses. It also would revise the definitions of terms applicable to the QTI program, along with the criteria for use by OTTED and Enterprise Florida in identifying target industries. SB 1856 provides for the deletion of ad valorem taxes from the types of taxes that may be refunded under the program.
While SB 1856 is on the March 17 Senate Committee on Commerce agenda, FEDC has significant concerns with the ad valorem tax deletion provisions of the bill, which also removes the ability to utilize the statewide private sector average wage when calculating private sector wages.
HB 7109 Relating to the Tax Refund Program for Qualified Target Industry Businesses by the House Economic Development Policy Committee
Originally filed as a proposed committee bill in State Representative Jennifer Carroll’s Economic Development Policy Committee, HB 7109 was passed there unanimously. However, now having been filed as a bill, it must be passed by the Economic Development and Community Affairs Policy Council, which is its only committee of reference.
HB 7109 would establish a schedule for OTTED to review, revise and report a list of target industries to Florida’s Governor and Legislature. Under the provisions of the bill, the criteria for evaluating applications for the bill’s Tax Refund Program (“Program”) would be revised. The Florida Office of Economic and Demographic Research would evaluate the State’s return on investment for the Program. HB 7109 also re-designates an economic stimulus exemption as the “economic recovery extension” and revises the date by which QTI businesses may request these exemptions. Further, HB 7109 authorizes the waiver of requirement that QTI businesses annually provide for proof of taxes paid under certain conditions. Any failure of QTI businesses to complete their tax refund agreements would be monitored by the OTTED and reported to Florida’s Governor and Legislature. Finally, HB 7109 revises the date by which QTI business may be certified as qualified for Pogram.
HB 451 Relating to Space Florida by State Representative Steve Crisafulli
HB 451 would revise provisions for Space Florida’s governing board to terminate its existing Board and replace it with new one. Provisions of Board membership, organization, meetings, actions and expense reimbursement are provided by the bill, which also requires Board members to file a disclosure of financial interests.
HB 451 unanimously passed out of the House Economic Development Policy Committee after being amended on March 3. Next, the bill will be heard in the House Economic Development and Community Affairs Policy Council.
HB 697 Relating to Entertainment Industry Economic Development by the Economic Development Policy Committee, State Representative Steve Precourt and others
HB 697 creates the Entertainment Industry Financial Incentive Program as a tax credit award for companies that have certain expenditures associated with a movie, television, or other similar media production. The aggregate amount of tax credits authorized under this bill is $75 million per year. HB 697 provides that OTTED-certified productions may attain tax credit awards by demonstrating an amount of qualified expenditures that meet or exceed minimum requirements. Qualified expenditures are defined as: goods purchased, leased from, or services that are provided by a qualified Florida vendor or supplier. Under the provisions of HB 697, credits awarded may be used to offset corporate income tax or sales and use tax liabilities. Unused tax credits may be transferred or carried forward under certain circumstances.
HB 697 was amended and unanimously passed out of the House Economic Development Policy Committee on March 3 with amendments. Next, the bill must be heard by the House Finance and Tax Council.
HB 607 Relating to Tax Credits for Research and Development by State Representative Scott Plakon
HB 607 creates a research and development tax credit against Florida corporate income taxes that is modeled after the federal research tax credit in Title 26 U.S. Code section 41 and incorporates some of its definitions.
Intended to stimulate scientific or technological advances leading to high-wage, high-skilled jobs, the tax credit established by HB 607 would be equal to 10 percent of the difference between a company’s qualified research and development expenditures in the current taxable year and its average research and development expenditures over the previous four taxable years. To qualify for the tax credit, business entities must be a target industry business as defined in 288.106(1)(o), F.S.
Under the provisions of HB 607, a research and development tax credit may not exceed 50 percent of a business’ corporate tax liability in a tax year, after any other corporate tax credits have been applied. A business may carry forward, for up to five years, any unused tax credit. Those unused credits may be transferred or sold to other business entities, at no less than 75 percent of their face value. The purchaser or assignee must use the tax credit in the taxable year the purchase or transfer of credit is made.
The bill has an effective date of July 1, 2010, although, if it is passed, tax credits could not be used to offset corporate income taxes until the following year.
HB 607 was workshopped by the Economic Development Policy Committee and subsequently passed by that Committee on March 10. Next, the bill must be considered by the House Finance and Tax Council.
SB 310 Relating to Public Records/Proprietary Confidential Business Information by State Representative Paula Dockery
Under the provisions of SB 310, confidential business information held by an agency confidential and exempt from Florida public-records requirements would be made proprietary. However, while the bill provides a process for petitioning for public access to such records, it also repeals an existing section of law in which a similar public necessity statement is codified.
If passed, such an exemption would be subject to legislative review and repeal under the provisions of the Open Government Sunset Review Act.
Because SB 310 creates a new public-records exemption, it would require a two-thirds vote of each house of the Legislature for passage.
SB 310 passed unanimously out of the Senate Commerce Committee on March 3 and subsequently was amended and passed unanimously by the Senate Governmental Oversight and Accountability on March, 10.
SB 1680 Relating to Corporate Income Tax by State Representative Rudy Garcia
SB 1680 lowers the corporate income tax rate from 5.5 percent to 4.5 percent for certain levels of taxable income up to the first $1 million of income tax. Effective immediately upon becoming law, the bill is a priority of the Governor and is designed to strengthen Florida businesses.
On March 3, SB 1680 was amended and passed favorably by the Committee on Commerce by a vote of 7 to 3. Those legislators opposing the bill were Senators Charlie Justice, Dan Gelber and Nan Rich. SB 1680 must next be passed by the Committee on Finance and Tax.
Governor Crist Delivers Final State of the State Address
Governor Charlie Crist addressed a joint session of the Florida House of Representatives and Senate on May 2 to deliver the final State of the State address of his term of office. In his speech, he calling on the Legislature to address essential issues such as workforce, education and government integrity. He also praised Senate President Jeff Atwater and House Speaker Larry Cretul for swiftly passing legislation on that same day that will serve to reduce an increase in Florida’s unemployment compensation tax for the next two years. To access the complete text of Governor Crist’s speech, click here.
Should you have any comments or questions, please contact Tracy Mayernick (tmayernick@cftlaw.com) at Colodny Fass.
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