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2019 Florida Legislative Session “Capitol Report”

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Dean Mead’s Capitol Report gives you a summary of the important issues that took place in Tallahassee this year. Legislators introduced 3,492 separate pieces of legislation during the 2019 Legislative Session, but only 197 bills passed both chambers. The Capitol Report highlights some of the bills that may affect your business. We have provided a short summary of the important provisions within each bill.

The full text of each enrolled bill, and accompanying bill analysis are available on the legislative websites (http://www.flsenate.gov; http://www.myfloridahouse.com).

The Capitol Report is intended to update you on changes to the law that may be of interest to your business. For more information, please contact our Tallahassee Office at 850-999-4100.

REAL ESTATE DEVELOPMENT

Impact Fees:  CS/HB 207 by Representative Donald provides revised conditions and restrictions on the ability of a local government to impose impact fees.  Among the bills provisions, a local government cannot require payment of a fee prior to issuance of a building permit; the impact must be reasonably related to impact of the proposed new construction; the expenditure of the impact fee must be reasonably related to benefits.

Property Development: HB 7103 by Rep. Fischer authorizes “inclusory housing ordinances” to require developers to provide a specified number or percentage of affordable housing units in a proposed development or contribute to a housing fund in lieu of building affordable housing units.  With respect to impact fees, the bill codifies the following requirements in s. 163.31801, F.S, although the foregoing requirements do not apply to water and sewer impact fees:

  • Collection of the impact fee may not be required to occur earlier than the date of issuance of the building permit for the property that is subject to the fee.
  • The impact fee must be proportional and reasonably connected to, or have a rational nexus with, the need for additional capital facilities and the increased impact generated by the new residential or commercial construction;
  • The impact fee must be proportional and reasonable connected to, or have a rational nexus with, the expenditures of the funds collected and the benefits accruing to the new residential or nonresidential construction;
  • Revenues generated by the impact fee may not be used, in whole or in part, to pay existing debt or for previously approved projects unless the expenditure is reasonably connected to, or has a rational nexus with, the increased impact generated by the new construction; and
  • Requirement that holders of impact fee credits are entitled to an increase in the value of their credits anytime a local government increases its impact fee rates. This section is explicitly prospective and not retrospective.
  • The bill also creates unique provisions for impact fees assessed against public educational facilities and reduces the number of days local building officials have to review permit applications from 30 days to 20 days.

The bill also prohibits comprehensive plans and land development ordinances adopted after January 1, 2019 from impairing preexisting development ordinances, and  it grandfathers the density and intensity thresholds approved by pre-existing development orders.

Comprehensive Plan Amendments:  HB 6017 by Representative Duggan removes the acreage limitation that applies to small-scale amendments to a local government’s comprehensive plan.

Construction Bonds:  CS/CS/HB 1247 by Representative Perez revises the claims procedures under construction bonds.  Among its provisions, the legislation requires the notice of nonpayment to be provided under oath; it provides a prescribed form for the notice of nonpayment; it provides that a person filing a fraudulent notice forfeits his or her rights under the bond; and it provides that the service of fraudulent notice of nonpayment is a complete defense to the lienor’s claim against the bond.

Lis Pendens:  CS/CS/HB 91 by Representative Altman and Senator Powell clarifies that a notice of lis pendens bars the enforcement of liens or other interests on a property that is sold in a judicial sale until the recording of an instrument transferring title. However, liens may be enforced once the lis pendens expires, is withdrawn or otherwise discharged. 

Open Permits:  CS/CS/HB 447 by Representative Diamond and Senator Perry provides procedures for closing open building permits and satisfying any applicable requirements of said permits.  Among its provisions, the legislation authorizes counties to provide notice of expiring permits; authorizes a one-time search fee; and allows for open permits to be closed after 6 years in the absence of a final inspection, provided that no safety hazards exist. 

Real Property–Right of Entry:  CS/CS/HB 767 by Representative Robinson and Senator Simmons provide for the automatic release of rights-of-entry held by any local government, water management district or other state agency to explore for mineral rights on small parcels of property consisting of less than 20 acres. 

Community Development Districts:  CS/CS/HB 437 by Representative Buchanan provides that a petition for creation of a new CDD of less than 2,500 acres may identify future contiguous lands to be included within the CDD, and it provides the procedures for such inclusion.  The legislation also authorizes a CDD to merge with another type of special district created by special act or by filing a petition for establishment of a new CDD. 

Attorney Fees and Costs:  CS/CS/CS/HB 829 by Representative Sabatini provides prevailing party attorney fees and to litigants who successfully challenge a local ordinance on the grounds that the subject matter is expressly preempted by the state constitution or state law

Property Rights:  CS/HB 1159 by Representative La Rosa creates a generic Property Owner Bill of Rights to be posted on the website of the property appraiser’s office.  The Property Owner Bill of Rights offers a non-exclusive outline of rights and protections for property owners.  The legislation also preempts local tree ordinances and permits tree trimming and tree removal by a residential property owner who obtains an arborist’s or landscape architect’s certificate that the tree presents a danger to persons or property. 

FAMILY AND WEALTH MANAGEMENT

Electronic Legal Documents:  CS/CS/HB 409 authorizes remote notarization and prescribes procedures for implementing the remote-notarization services via the internet, effective July 1, 2020. The final version of the legislation includes language designed to provide protections for vulnerable adults.

Family Trust Companies:  HB 7033 by the House Oversight Subcommittee removes the scheduled repeal of the public records exemption in chapter 662 for Family Trust Companies. 

AGRICULTURE & WATER

State Hemp Program: SB 1020 by Senator Bradley creates the State Hemp Program within the Department of Agriculture and Consumer Services to promote the cultivation of hemp in Florida. The bill defines hemp as an agricultural commodity and specifies that certain hemp-derived cannabinoids intended for ingestion are foods are not controlled substances.

C-51 Reservoir Project: HB 95 by Representative Jacobs revises the portions of the C-51 reservoir project for which the South Florida Water Management District may negotiate and revises the water storage and use requirements for the project if state funds are appropriated. The bill also specifies that Phase II of the project may be funded by appropriation in addition to other sources.

Wetland Mitigation: HB 521 by Representative McClure authorizes a local government to allow certain permittee-responsible mitigation on lands purchased and owned by the local government and provides exceptions to provisions prohibiting a governmental entity from creating or providing mitigation projects other than its own if certain conditions are met.

Florida Red Tie Mitigation and Technology Development Initiative: SB 1552 by Sen. Gruters creates the Red Tide Mitigation Task Force at the Mote Marine Laboratory, and appropriates $3 million dollars annually through FY 2024-2025 for research into techniques for preventing, controlling and mitigating the impacts of Red Tide.

BUSINESS

Business Organizations:  CS/CS/HB 1009 by Representative Byrd revises the chapters governing Florida corporations, Florida limited liability companies, Florida corporations not-for-profit, and Florida limited partnerships. Highlights of the bill include:

  • Reducing number of days before which a director must receive notice of a corporation’s organizational meeting from 3 days to 2 days;
  • Allowing corporations to file a corporate name that is the same as another corporate entity provided that the similarly-named entity consents.
  • Explicitly enumerating the duties of a corporate agent
  • Modifying the “prudent person standard” set forth in the s. 607.0830—commonly known as the business judgment rule—by requiring directors to act as an ordinarily prudent person in a like position would reasonably believe appropriate under the circumstances.
  • Requiring corporate officers to notify superior officers or other appropriate persons of material information about the corporation’s affairs and “actual or probable breaches of duty to the corporation”.
  • Revising provisions relating to corporate mergers, conversions, domestication dissolution, and derivative actions;
  • Authorizing remote participation at shareholders meetings and electronic transmission of information to directors; and
  • Provides that electronic notice may be authorized in the articles of incorporation and that notices will be provided in English unless otherwise agreed to, and
  • Revises language relating to records inspection and revises duties of registered agents and registered officers.

Blockchain Technology: SB 1024 by Sen. Gruters establishes the Florida Blockchain Task Force within the Department of Financial Services.

Workplace Vaping:  CS/SB 7012 by Senate Committee on Innovation, Industry and Technology implements the recent constitutional amendment by adding vaping to the Florida Clean Indoor Air Act and imposing the same restrictions on vaping in indoor work places that currently apply to smoking.

Lost or Abandoned Property:  SB 180 by Stargel provides specific exemptions from Florida’s unclaimed property act for lost or abandoned property that has been found on the premises of a theme park, entertainment complex, public lodging establishment, or food service establishment.  For the exempt establishments, the unclaimed property that has not been claimed by the owner within 30 days cannot be sold, but may be disposed of or donated to a charitable institution that is exempt from federal income tax under s. 501 (c) (3) of the IRS Code.

Human Trafficking:  HB 851 by Rep. Fitzenhagen requires public lodging establishments to provide their housekeeping and front desk employees with human trafficking awareness training on an annual basis. The bill also requires lodging establishments to implement reporting protocols and post human trafficking awareness signs on property. The bill also requires various health professionals and licensees to undergo human trafficking awareness and creates a Direct Support Organization to support anti-human trafficking efforts within the Attorney General’s office.

Electronic Legal Documents:  CS/CS/HB 409 authorizes remote notarization and prescribes procedures for implementing the remote-notarization services via the internet, effective July 1, 2020. The final version of the legislation includes language designed to provide protections for vulnerable adults.

TAX POLICY

Taxation:  HB 7123 by House Ways & Means Committee is the annual “Tax Package.” It includes more than a dozen major concepts totaling approximately $88 million in tax cuts during the first year and $73 million recurring tax reductions:

  • Reduction of the business rent tax from 5.7% to 5% starting January 1, 2020 (a $31M impact in first, partial year and $65M thereafter).
  • A five-day back to school sales tax holiday, including personal computers from August 2 – 6 (a $43M impact).
  • A seven-day hurricane preparedness sales tax holiday from May 31 – June 6 (a $5.5M impact).
  • A sales and use tax exemption for inventory items initially purchased for resale, but instead donated to charitable 501(c)(3) entities ($4.9M impact).
  • Expanding the documentary stamp tax exemption for transfers of property between spouses.
  • Temporary provisions related to farmers impacted by Hurricane Michael:
    • A property tax clarification regarding damaged agricultural equipment;
    • A sales tax exemption for fencing repairs;
    • A sales tax exemption for agricultural building repairs; and
    • A fuel tax refund for agricultural shipping.
  • Creates an exemption from local right-of-way fees for certain pass-through providers.
  • An amendment to the Florida Tax Credit Scholarship program for Insurance Premiums Tax which would allow greater flexibility for companies to make contributions (a $1.1M impact).
  • A timing shift for the 2018 legislation regarding ad valorem taxes on hurricane impacted property to better understand the impacts.
  • A clarification that usage of school district voted discretionary operating property tax levies is to apply proportionately to charter schools.

Corporate Income Tax:  HB 7127 by Ways & Means Committee adopts the Internal Revenue Code in effect on January 1, 2019 for purposes of administering Florida Corporate Income Tax. The bill also makes the following revisons with respect to Corporate Income Tax Administration:

  • Decouples from section 951A of the Internal Revenue Code (Global Intangible Low-taxed Income under the 2017 Tax Cuts and Jobs Act).
  • Extends Florida’s automatic refund and rate reduction provisions for two more state fiscal years (until 2020-2021). These automatic provisions are triggered in any year that the actual corporate income tax collections exceed the February 2018 official revenue forecast by more than 7%. 
    • For taxable years beginning on or after January 1, 2022, the corporate income tax rate increases to 5.5%
  • Creates a new corporate income tax return in the 2018 and 2019 years which requests data specific to the changes in the 2017 Tax Cuts and Jobs Act, including: FDII; 163(j); Net Operating Loss deductions; Net Operating Loss carryovers; and AMT credit carryovers. Failure to provide the required information will subject a taxpayer to penalties.

Local Tax Referenda:  HB 5 by Rep. DiCeglie (R); SB 336 by Sen. Brandes (R)

Requires referenda to adopt or amend a local discretionary sales surtax to be held during a general election. Creates registration and reporting requirements for individuals or entities gathering petitions to amend the State Constitution.

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