FEDC Inside Track For Legislative Affairs: Week Two–Regular Session, 2009
Mar 17, 2009
FEDC Weekly Session Report
As the 2009 Legislative Session ended its second week (March 9-13), policy bills moved through the committee process and appropriations committees were in a holding pattern while awaiting news from the Florida Office of Economic and Demographic Research General Revenue Estimating Conference (“EDR”).
Revenue Estimating Conference Results
The EDR met on Friday, March 13 to evaluate the impact of state tax collections for the remainder of fiscal year 2008-2009, and for 2009-2010.
Economists are now forecasting state tax collections for the last four months of the current fiscal year to plunge by another $1.1 billion. Over the budget year beginning July 1, 2009, revenues are predicted to fall by $2.3 billion, which is more than what Florida Governor Charlie Crist, lawmakers and economic experts were expecting.
Florida lawmakers now must fill a $706 million deficit for the current fiscal year, in which a total deficit of nearly $6 billion is projected.
Economists blamed the unexpected tax shortfall on the lingering credit crisis, slowing sales of cars and decreased spending on household goods and leisure.
Florida’s sales tax, which provides three-fourths of the state’s overall tax revenue, is now expected to fall precipitously for a fourth consecutive year. The state’s six-cent sales tax generated $18.4 billion in the last fiscal year, but that total is predicted to decrease to $16.5 billion during the reminder of the current budget year, which ends in June, 2009. Another drop to $15.9 billion is predicted in the 2010-2011 budget year.
Governor Crist has proposed spending $3.2 billion of federal stimulus funds in the current budget year to cover the $706 million deficit. The Governor also has proposed applying $4.7 billion in stimulus funds to his 2009-2010 $66.5 billion budget.
However, based on the new projections, Florida will need more than the federal stimulus funds to cover its revenue deficit. The Legislature is considering various means of raising more revenue, including a gambling compact with the Seminole Tribe, an increased cigarette tax and a five percent cut of state employee salaries. The repeal of sales tax exemptions also is being evaluated.
The Legislative Session runs through May 1, 2009. Work on the budget, which is the only bill the Legislature must pass during the Session, will begin shortly.
Materials from the March 13 General Revenue Fund Estimating Conference are below.
- Executive Summary
- General Revenue Financial Outlook Statement
- March 2009 Revenue Estimating Conference Changes To the Estimate
- March 2009 Revenue Estimating Conference Workpapers
Economic Development Bills Heard This Week
SB 1212 by Senator Lee Constantine relating to Public Transit
This bill provides definitions relating to commuter rail service, rail corridors, and railroad operation for purposes of the rail program within the Florida Department of Transportation (“Department”) and would revise the time period within which the Department must revise and report on the rail system plan. SB 1212 also would authorize the Department to indemnify and hold a railroad company harmless when it acquires a rail corridor from a company.
SB 1212 passed the Senate Committee on Judiciary 6 Y/3 N after two amendments by Senator Carey Baker (870884 and 882428) were adopted. A number of presenters testified about the bill and there was a lengthy debate among the Committee Members. It will now go to the Senate Committee on Transportation and Economic Development Appropriations (“TED”).
The bill, which is designated as the “Mike McHugh Act,” would require the Florida Department of Environmental Protection and water management districts to adopt programs expediting the processing of permits for certain economic development projects. It also would require municipalities and counties to identify certain businesses by county commission resolution. A time frame for permit application approval or denial is also provided for. Effective Date: July 1, 2009.
HB 73 was unanimously approved by the House Agriculture and Natural Resources Policy Committee and is on the House General Government Policy Council agenda for Tuesday, March 17. The Senate companion version, SB 852, is scheduled to be heard in the Senate Committee on Environmental Preservation and Conservation (“EPC”) on Tuesday, March 17.
SB 2034 by the Senate Commerce Committee relating to the Innovation Incentive Program
Originally submitted as Proposed Committee Bill 7056, this bill would expand the definition of a “project” within the Innovation Incentive Program to include alternative and renewable energy applicants. The bill would authorize the waiver or reduction of requirements relating to matching funds for these types of projects and would require the Florida Office of Tourism, Trade, and Economic Development and the incentive fund recipient to enter into a contract setting forth award payment conditions.
SB 7056 was scheduled to be heard by the Senate Commerce Committee on Tuesday, March 17.
SB 350 by Senator Mike Haridopolis relating to Entertainment Industry Economic Development
This bill would revise the entertainment industry financial incentive program to provide corporate income tax and sales and use tax credits to qualified entertainment entities in lieu of reimbursements from legislative appropriations. SB 350 also would revise related provisions regarding definitions, creation, scope, application procedures, approval process, eligibility, required documents, qualified and certified productions, and annual reports.
SB 350 unanimously passed the Senate Commerce Committee on March 10 and will proceed to the Senate Finance and Tax Committee (“FT”)–its next committee of reference. During the March 10 meeting, Senator Dan Gelber withdrew a previously-filed amendment that would have added the American Musical Theatre to the bill. Florida Film Commissioner Lucia Fishburne gave a presentation on Florida’s current and recent film projects, which included return on investment information for funding utilized this industry.
SB 360 by Senator Mike Bennett relating to Growth Management
Entitled “The Community Renewal Act,” SB 360 would extend dates relating to requirements for adopting amendments to the capital improvements element of a local comprehensive plan. The bill also provides legislative findings relating to transportation concurrency exception areas, and would revise provisions relating to the State review of comprehensive plans and impact fees.
SB 360 is scheduled to be heard in the Senate Policy and Steering Committee on Ways and Means (“WM”) on Thursday, March 19.
SB 634 by Senator Don Gaetz relating to Research Commercialization Matching Grant Program
This bill would create the Florida Research Commercialization Matching Grant Program (“Program”) and designate an existing committee, or subcommittee thereof, within Enterprise Florida, Inc. for certain purposes. SB 634 provides for a Program fiduciary entity, applicant eligibility guidelines, program administrative costs and awards, and would require the Florida Office of Program Policy Analysis and Government Accountability to conduct a Program review. APPROPRIATION: $4,000,000.
SB 634 passed the Senate Committee on Commerce unanimously. It will now go to the Senate Transportation and Economic Development Appropriations Committee.
SB 768 by Senator Steve Oelrich relating to Tax Credits for Research and Development
This bill would authorize certain businesses that incur certain research and development expenses in Florida to receive a tax credit against their corporate income tax. SB 768 specifies the amount of the tax credit and limits the use of the credit, as well as permits the carryover of unused tax credits for a specified period. It also permits the sale or assignment of unused tax credits, subject to the approval of the Florida Department of Revenue.
SB 768 was temporarily postponed after senators expressed concern that the language was too vague in regard to what type of research and development projects would receive the tax credit. Senators said that because money is so scarce, they want more specifics on where these resources would be applied.
Senate Commerce Committee Chairman Rudy Garcia stated that, with so many unanswered concerns having been expressed, he wanted the bill to be temporarily postponed. The bill was not placed back on the Commerce Committee agenda for this week.
Should you have any questions or comments, please contact Tracy Mayernick at Colodny Fass.
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