The 2008 Legislative Session ended on time, adjourning at 6:02 p.m. on Friday, May 2, 2008.  A substantial amount of floor time was taken up during the last two weeks with farewell ceremonies and speeches.  Term limits have hit the Legislature hard this year, with 32 House members and 5 Senators (Webster, Carlton, Dawson, Saunders and Geller) termed out. 

The 2008 Session will likely be remembered for the budget troubles that dominated the Session.  The $66.2 billion budget adopted is about $4 billion less than last year’s final budget and almost $7 billion less than the budget funded just two years ago.  There were many programs that fell victim to the budget cuts including education, which lost $332 million, health and human service programs, which saw nursing homes that care for Medicaid recipients lose $164 million, and the elimination of the popular “back to school” tax free shopping period.

As for the issues of property tax and property insurance, the Legislature passed very little of consequence.  Senate President Pruitt held firm to his promise that there would be no additional property tax reform until the effects of last year’s rollback and caps legislation and the passage of Amendment 1, could be considered.  A small package (HB 909) was passed that included language to end the practice of “highest and best use” when valuing property for tax purposes and that prohibited local government from recapturing tax base lost as a result of Amendment 1 except by supermajority vote (SB 1588).  A property insurance package (2860) was passed that prevents rate increases until January 2010 for customers of state-run Citizens Property Insurance Corp.  It also tightens regulations on insurance companies and provides $250 million in loans to try to attract private insurers to the state.  There is skepticism as to whether Floridians will see any substantial rate decreases as a result of this legislation.

The Legislature did pass a comprehensive energy bill (HB 7135) during the 2008 Session.  The legislation does not include Governor Crist’s proposals to adopt emission standards for new vehicles and mandate that utilities obtain more of their energy from renewable fuels but takes a significant step toward cleaner air and reducing our dependence on foreign oil.  It establishes a cap-and-trade program for greenhouse gases, which would establish limitations on greenhouse gas emissions and allow companies that reduce emissions to sell credits to other companies who cannot meet the reduction requirements.  This should provide an economic incentive for reductions in emissions.  The bill will also make the construction of nuclear plants more feasible.

The 2008 Legislature extended the land acquisition and conservation program known as Florida Forever for 10 years and funded it to the tune of $300 million (SB 542).  The program had been set to expire in 2010.  Also, despite the tough budget year, Everglades restoration projects received funding in the amount of $50 million.

There were a large number of bills filed in the 2008 Session that attacked the discretion and prerogative of local government for activities that require new or increased taxes, fees or assessments.  An example was HB 715, which would have required a supermajority vote to levy a new or increased fee or tax, increase a geographical tax base, or eliminate an existing exemption.  Although this legislation was defeated, local government can expect similar attacks in upcoming legislative sessions. 

In the education arena, an effort to infuse religion into lessons on biological evolution was defeated (SB 2692/HB 1483).  The House refused to consider Senate President Pruitt’s proposal (SB 2308) to put state universities under the Legislature's control.  Legislation was also passed adjusting how Florida judges its high schools by including high school graduation rates as part of the criteria (SB 1414) and that directs school districts to create policies to prevent bullying (HB 669).

A few other notable issues include the defeat of a proposal (HB 1399/SB 1978) for a $650 million commuter rail project in Central Florida that would have given CSX sovereign immunity and indemnity from liability for accidents, passage of a bill (HB 503) allowing employees to keep guns in their cars while at work, passage of a bill (SB 756) providing compensation of $50,000 for each year of wrongful incarceration, passage of a basic health insurance plan for citizens of Florida (SB 2534), insurance coverage for children with autism (SB 2654), and defeat of a proposal (SB 2400) that would have required an ultrasound, and review of the ultrasound by the woman, before an abortion could be obtained.

All of this legislative activity took place while the Florida Taxation and Budget Commission (TBRC) conducted its activities.  The Florida Constitution authorizes the appointment of the TBRC every 20 years.  The Commission is authorized to place proposed constitutional amendments directly on the statewide ballot for referendum approval at the general election held in the year the Commission meets.  The TBRC consisted of 25 voting members appointed by the Governor, Senate President and Speaker of the House.  They met beginning several months prior to Session and concluded their activities about a week before the Legislature adjourned.  The TBRC considered numerous proposals which would have significantly impacted the ability of local government to perform its duties.  In the end, the TBRC approved seven constitutional proposals to be placed on the November ballot.  These seven proposals are summarized in this report.

Below is a detailed description of those issues that we supported, opposed or monitored for the Florida Association of Special Districts:

1.         Purchasing by Special Districts

House Bill 211 (Machek) / Senate Bill 2710 (Aronberg)

The bill authorizes special districts to purchase commodities and services from competitively bid contracts of other counties, municipalities and special districts.  The legislation will save special districts millions of dollars and speed up the acquisition process for goods and services by allowing them to "piggyback" on previously bid contracts by other public bodies.

            Status:            HB 211 passed the Florida House by a vote of 116-0 but stalled in the Senate.  We worked to get the bill heard on the Senate floor, as well as amending the language to various other bills that might have had a chance to pass, but ultimately could not get the language passed in the Senate. 

2.         Property Taxes

As briefly discussed above, early in the 2008 Session, Senate President Pruitt publicly stated that he did not want to undertake additional property tax reforms until the effects of last year’s property tax legislation and passage of Amendment 1 could be determined.  While the House passed several property tax control or reduction bills, the Senate refused to consider additional property tax measures this year.

A.                 Property Tax Glitch Bill

SB 1588 (Haridopolos)/HB 7131 (GEAC)

Last session, a law was passed directing the Department of Revenue to report by March 2008 on the results of last year’s millage limitation legislation and including any issues that the Legislature should address relating to the millage limitation legislation, as well as the implementation of Amendment 1.  One of the issues addressed SB 1588, is the loss of local government revenues as a result of Amendment 1 and the additional $25,000 homestead exemption.  Prior to this legislation, a local government could levy a millage rate to recover the lost revenue by simple majority vote.  SB 1588 clarifies that a local government must approve by 2/3 vote a higher millage to recover the loss. 

Status:            Passed both the House and Senate and is on its way to the Governor.

B.                 Value Adjustment Boards

HB 909 (Nehr)

This legislation makes adjustments to value adjustment boards and the way they operate.  It also clarifies that in determining the highest and best use of a property (one of the eight factors considered in determining the assessed valuation), the property appraiser must take into account the legally permissible use of the property, as well as any zoning changes, concurrency requirements, or permits which would be necessary before the property could actually be used for that highest and best use. The bill precludes property appraisers from establishing a minimum acreage below which they will not grant an agricultural classification. The Legislature also states its express intent that taxpayers never have the burden of proving that the property appraiser’s assessment is not supported by any reasonable hypothesis of a legal assessment.

 

Status:            The bill passed and is on its way to the Governor.

C.        1.35% Cap

            House Bill 949 (Lopez-Cantera) / Senate Bill 2190 (Bennett). 

This bill would place on the ballot a constitutional amendment to cap the amount of all property taxes at 1.35% of the property’s value. 

Status:            HB 949 passed the House but died in the Senate.

D.        State and Local Government Revenue Limitations

HB 7125 (GEAC/Atkisson)

 

            HB 7125 provides a constitutional amendment that limits the growth of revenues of counties, cities, special districts and school districts to a defined growth index.  It provides discretion to the Legislature to determine the types of revenues to be included in the limitations, the applicability of the limits to certain governments, and provide for the use of excess revenues and conditions under which the limitations can be exceeded.

 

Status:            HB 7125 passed the full House but died in the Senate.

 

E.         Supermajority Vote

House Bill 715 (Flores) / Senate Bill 2412 (Haridopolos)

 

This bill would require a supermajority vote or a majority vote plus one, whichever is greater, by a local government board to:

 

-Levy a new, or increase an existing, tax, fee, or assessment;

-Expand a tax base through annexation; or

-Eliminate a current exemption for a tax, fee or assessment.

 

            Status:            Neither bill passed.

 

3.         State and Local Government Spending

House Bill 181 (Harrell) / Senate Bill 392 (Storms)

 

The bill requires that all state and local governments except school districts with a website must disclose on the website certain information about contracts whose value exceeds $5,000. 

 

            Status:            SB 392 passed the full Senate but HB 181 died in a House committee.  In an effort to salvage what they could, SB 392 was gutted to apply only to the state government and only to contracts above $25,000.  SB 392, as amended, passed the House but died in the Senate.      

 

4.         Transparency in Local Government Spending

HB 7123 (GEAC/Grant) / SB 2648 (Dean)

 

            The bill sets forth certain criteria that must be contained in a local government’s budget. It also requires that if a local government has a website, it must provide a summary of the proposed budget to the public on the website.  The bill also requires cities and special districts to publish the budget summary in a local newspaper, like counties are currently required to do.  The bill provides that a county, city or special district’s unreserved, undesignated reserves may not exceed 20% or operating revenues.  The bill also provides a $200 per day limit on lodging expenses unless approved in writing by the agency head when lodging is not available for less than $200.  Finally, the bill provides that rental vehicles should be used for travel by public employees or officers rather than personal vehicles when the estimated cost for the rental vehicle is less than the estimated cost of using the employee’s personal vehicle.

 

Status:            HB 7123 passed the House but did not pass the Senate.  The House amended the language onto SB 392 which had passed the Senate.  However, it died after being sent back to the Senate. 

 

5.         Codification of Special Districts

House Bill 795 (Kriseman) / Senate Bill 1210 (Baker)

 

The bills required the codification of district charters for all 1569 special districts in Florida over the next several years.  If the governmental entity that created the district did not codify the district charter, the special district would be dissolved. 

 

            Status:            Neither HB 795 nor SB 1210 received a hearing.

 

6.         Public Construction Works

SB 2148 (Haridopolos)/HB 1399 (Aubuchon)/HB 683 (Weatherford)

 

            The bill expanded those projects for a governmental entity that would be subject to competitive bidding to include the repair or maintenance of a public building, structure, or facility of over $280,000 in value.   It also provided that a local government may not own or operate an asphalt plant or a concrete batch plant having an independent mixer.  In its final committee stop, SB 2148 was stripped of all language except for the prohibition against local governments owning or operating an asphalt or concrete plant.

 

Status:            This language was amended into several different bills during the last week of Session and ultimately ended up passing in SB 682.

 

7.         Growth Management

House Bill 7129 (EEIC/Cannon) / SB 474 (Garcia)

 

            The Senate held out until the last week before releasing the substance of SB 474.  HB 7129 was heard a second time and postponed on third reading waiting on SB 474.  However, the Senate could not get through the second reading because several major amendments were offered, and the bill was temporarily passed to work out details. However, the Senate never brought the bill back for the 3rd and final reading, and simply adjourned.

 

            Status:            The legislation did not pass the House or Senate and died.

 

 8.         Fire Safety/Structure Markings

House Bill 727 (H. Gibson) / Senate Bill 1554 (Wise)

 

The bill requires owners of any commercial or industrial buildings or multi-unit residential structures of 3 units or more that use truss type construction to mark the building with a symbol approved by the State Fire Marshal that would warn fire control officials of the type construction.

 

            Status:            HB 727 passed the House and Senate and awaits action from the Governor.

 

Other Bills of Interest

 

1.         SB 682 (Bullard) - Transportation

 

SB 682 was the omnibus Department of Transportation legislative package.  Of note, SB 682 provides that facilities determined by the Department of Community Affairs and the applicable general purpose local government to be port-related industrial or commercial projects are not considered to be a development of regional impact provided they are located within 3 miles of a port and rely upon the utilization of port and intermodal transportation facilities or are in a port master plan area.

 

            Status:            SB 682 passed the Florida Legislature and awaits action by the Governor.

 

2.         SB 758 (Bennett) – Inland Navigation Districts

 

SB 758 provides authority to the inland navigation districts (INDs) to aid and cooperate with nonmember counties that contain any part of the ICW within their boundaries, public seaports, and with navigation districts in planning and carrying out public navigation, local and regional anchorage management, beach renourishment, public recreation, inlet management, environmental education, and boating safety projects directly related to the waterways. Districts are also granted authority to assist in projects concerning waterway access.  The bill provides a list of provisions that apply to maintenance dredging projects conducted by certain seaports and INDs, including a grant of a mixing zone for turbidity for dredge activities, a requirement that the return water from an uplands containment site not violate water quality in the receiving waters, authorization for the use of flocculants, provided their use is coordinated in advance with the DEP, and a two-year grace period for maintenance dredging after a storm event causes a loss of original design function.  The bill changes the responsibility for posting and maintaining regulatory markers for manatee protection speed zones from the INDs to the FWCC, which may request funding from the INDs.

 

            Status:            SB 758 passed the Florida Legislature and awaits action by the Governor.

 

3.         SB 268 (Villalobos)/HB 95 (Llorente) – Truth in Government

 

These bills required that any person testifying before a committee of the Florida Legislature take an oath, either written or oral, prior to addressing the committee, declaring the he or she will speak truthfully.  Under the provisions of the bills, a violation of the oath would be a third-degree felony or, if compelled to testify by subpoena, a second-degree felony.  The oath requirement and the penalty provisions did not apply to children or legislators.  SB 268 passed the Senate but died in the House.

 

            Status:            SB 268 passed the Florida Senate but not the House and, therefore, died.

 

4.         HB 7143 (ENRC)/SB 2196 (Saunders) – Water Management Districts

 

The bills reenacted the 5 water management districts after undergoing sunset review this year.  The bill authorizes the Legislature to annually review the authorized millage rate for each WMD and annually set the maximum amount of revenue authorized to be raised by each WMD from ad valorem taxes.  The bill also created a council to nominate individuals to serve on the governing boards of the water management districts.

 

            Status:            HB 7143 passed the Florida House but not the Senate and, therefore, died.

 

THE FLORIDA TAXATION AND BUDGET REFORM COMMISSION

 

            The TBRC approved seven proposals to be placed on the ballot for approval by the voters in November.  In order to be approved, each proposal must pass by a vote of 60%.  The following proposals will be on the ballot:

 

1.                  Elimination of Required Local Effort

Constitutional Proposal 2 by McKay

 

CP 2 eliminates the required local effort (RLE) for education funding and requires the State to make up the difference through the repeal of current exemptions, an increase in the sales tax, or by reducing the State budget.  It also provides a 5% annual assessment cap on non-homestead property (i.e. commercial, second home) 

 

2.                  Residential Property Assessment

Constitutional Proposal 4 by Governmental Procedures and Structure Committee

 

CP 4 provides that the Legislature may prohibit the consideration of storm-hardening improvements and the installation of renewable energy source devices in the determination of the assessed value of residential real property.

3.                  Working Waterfronts

Constitutional Proposal 6/8/34 by Wilkinson, Scott and Lacasa

 

CP 6/8/34 provides that the following properties shall be assessed based on use for the purposes of ad valorem taxation:

 

• Land that is predominately used for commercial fishing purposes;

• Land used for vessel launches that are accessible to the public and are navigable;

• Public marinas;

• Drystacks that are open to the public;

• Water-dependent marine manufacturing facilities;

• Commercial fishing facilities; and

• Marine vessel construction and repair facilities and their support activities.

 

This measure creates an exception to the requirement in Article VII, Section 4 of the

Florida Constitution that all properties be assessed at just valuation for ad valorem taxation.

 

4.                  Ad Valorem Tax Exemption for Conservation Lands

CP 15/16 by Yablonski

 

CP 15/16 requires the Legislature to provide a property tax exemption for real property encumbered by perpetual conservation easements or other perpetual conservation protections, defined by general law. This measure also requires the Legislature to provide for classification and assessment of land used for conservation purposes, and not perpetually encumbered, solely on the basis of character or use. The assessment benefit for conservation land that is not perpetually encumbered is subject to conditions, limitations, and reasonable definitions established by general law. The Legislature must implement these property tax changes for property tax levies beginning in 2010.

 

            5.         Blaine Amendment                   

                        Constitutional Proposal 20 by Levesque

 

CP 20 repeals a limit on the power of the state to spend funds directly or indirectly in aid of sectarian institutions. The measure also prevents the state from excluding individuals and entities from a generally available public benefit or a contract to provide government services on the basis of religion. This measure does not appear to be designed to authorize the Legislature to re-enact a school voucher program.

 

 

 

 

 

6.         Public Services through Private Providers (Vouchers)

            Constitutional Proposal 40 by Governmental Procedures and Structure Committee

Constitutional Proposal 26 by Turbeville

 

The TBRC combined and passed CP 40 and CP 26.  CP 40 would supercede court rulings prohibiting educational vouchers.  This CP was originally defeated but was resurrected and approved through some procedural maneuverings that helped gain support for CP 2, which had been losing favor since the previous vote.  CP 26 amends the State Constitution to require that sixty-five percent of school funding received by school districts be spent on classroom instruction, rather than administration. The Legislature will define classroom instruction and administration in statute, and address the differences in administrative expenditures by district for transportation and food services, and any other necessary services.

 

7.         Local Option Taxes to Supplement Community College Funding

Constitutional Proposal 35 by Governmental Services Committee         

 

CP 35 provides an amendment to Section 9 of Article VII of the State Constitution to require the Legislature to authorize local option sales taxes to supplement funding for public community colleges. This measure directs the Legislature to provide a process by law to permit counties to submit a referendum to the voters for a local option sales tax to supplement community college funding. Approved taxes will sunset after five years and may be reauthorized by the voters.

 

Other Notable Proposals

 

            All together, the TBRC considered 51 different constitutional proposals or statutory recommendations.  Of these, only the seven proposals referenced above passed.  However, there were other notable proposals which received extensive consideration that were defeated.

 

Constitutional Proposal 45 (Hogan) - Revenue and Spending Caps                   

 

Easily the most controversial proposal considered by the TBCR, CP 45, as initially filed, limited local government revenue and spending increases at the rate of inflation plus population growth and could only be overridden by referendum of the electors.  After considerable lobbying efforts by cities, counties and special districts, CP 45 ended up being a proposal that required a 2/3 vote of the governing body of the state or local government in order to increase revenues over the previous fiscal year plus an adjustment for growth.  CP 45 was ultimately defeated.

 

Constitutional Proposal 21 (Lacasa) - Super Exemption

 

CP 21 would have made several changes to the Florida Constitution, which would have had severe impacts on local government:

 

1.         Provided non-homesteaded residential properties with a property tax exemption of 25% of the just value of the property, to be phased in at 12.5% for 2009 and 25% for 2010;

2.         Provided homesteaded properties with a property tax exemption of 25% of the just value of the property over the first $50,000.  This exemption would also be phased in at 12.5% for 2009 and 25% for 2010 and would replace the additional $25,000 exemption applicable with the passage of Amendment 1 on January 29;

3.         Limit annual assessment increases for non-homestead real property to 5%; and

4.         Provide a temporary ½% sales tax increase for three years to compensate school districts for the revenue losses associated with the proposal.  Any taxes in excess of what is required by the school districts will be distributed to other local government entities as provided by law.

 

            CP 21 was never considered by the full TBRC. 

 

Constitutional Proposal 51 (Riley) - Limitations on Creation of Special Districts

           

CP 51 proposed to limit the duration of newly created special districts, excluding community development districts, to eleven years.  The districts may be reauthorized by the voters for additional periods not to exceed eleven years.  This measure was handily defeated by the full TBRC.