House Bill hb2027e1

                                          HB 2027, First Engrossed



  1                      A bill to be entitled

  2         An act relating to the tax on sales, use, and

  3         other transactions; creating the Sales Tax

  4         Exemption Review Commission; providing for the

  5         appointment and organization of the commission;

  6         specifying duties; providing for reports;

  7         providing for the expiration of the act;

  8         providing legislative findings; providing an

  9         effective date.

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11  Be It Enacted by the Legislature of the State of Florida:

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13         Section 1.  The Sales Tax Exemption Review Commission;

14  membership; duties.--

15         (1)  The Sales Tax Exemption Review Commission is

16  created to examine the exemptions to the sales and use tax

17  contained in chapter 212, Florida Statutes, and make

18  recommendations to the Legislature on whether these exemptions

19  should be retained, modified, or repealed.  The Senate Finance

20  and Taxation Committee and the House Fiscal Policy and

21  Resources Committee shall provide administrative staff for the

22  commission.  The commission shall consist of the following

23  members, who must be appointed by July 1, 2002:

24         (a)  Nine members of the Senate to be appointed by the

25  President of the Senate.

26         (b)  Nine members of the House of Representatives to be

27  appointed by the Speaker of the House of Representatives.

28         (2)  Each appointed member of the commission shall

29  serve at the pleasure of the appointing official.  A vacancy

30  on the commission shall be filled in the same manner as the

31  original appointment.


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                                          HB 2027, First Engrossed



  1         (3)  The chair shall be appointed by the President of

  2  the Senate and the vice chair shall be appointed by the

  3  Speaker of the House of Representatives.  The chair and vice

  4  chair shall serve from their appointments until December 31,

  5  2003.  On January 1, 2004, the former vice chair shall become

  6  the chair and the former chair shall become the vice chair and

  7  serve until June 30, 2005.

  8         (4)  The commission shall hold its organizational

  9  meeting by August 1, 2002, and thereafter shall meet as

10  necessary at the call of the chair at the time and place

11  designated by the chair.  A quorum is necessary for the

12  purpose of conducting official business of the commission.

13  The commission shall use accepted rules of procedure to

14  conduct its meetings and shall keep a complete record of each

15  meeting.

16         (5)  The commission shall examine all of the exemptions

17  to the sales and use tax contained in chapter 212, Florida

18  Statutes.  For each exemption, the commission shall make

19  findings of fact and a recommendation whether the exemption

20  should be retained, modified, or repealed.  A recommendation

21  to repeal an exemption must be made by the vote of two-thirds

22  of the membership of the commission; otherwise, the commission

23  must recommend that the exemption be retained or modified.  In

24  reviewing the exemptions, the commission should consider the

25  following principles of taxation:

26         (a)  Equity.--The Florida tax system should treat

27  individuals equitably. It should impose similar tax burdens on

28  people in similar circumstances and should minimize

29  regressivity.

30         (b)  Compliance.--The Florida tax system should

31  facilitate taxpayer compliance.  It should be simple and easy


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                                          HB 2027, First Engrossed



  1  to understand so as to minimize compliance costs and increase

  2  the visibility and awareness of the taxes being paid.

  3  Enforcement and collection of tax revenues should be done in a

  4  fair, consistent, professional, predictable, and

  5  cost-effective manner.

  6         (c)  Pro-competitiveness.--The Florida tax system

  7  should be responsive to interstate and international

  8  competition in order to encourage savings and investment in

  9  plant, equipment, people, and technology in Florida.

10         (d)  Neutrality.--The Florida tax system should affect

11  competitors uniformly and not become a tool for "social

12  engineering."  It should minimize government involvement in

13  investment decisions, making any such involvement explicit,

14  and should minimize pyramiding.

15         (e)  Stability.--The Florida tax system should produce

16  revenues in a stable and reliable manner that is sufficient to

17  fund appropriate governmental functions and expenditures.

18         (f)  Integration.--The Florida tax system should

19  balance the need for integration of federal, state, and local

20  taxation.

21         (g)  Public purpose.--Sales and use tax exemptions for

22  businesses should promote an important state interest in

23  either economic development, job creation and retention,

24  economic diversification, or community revitalization.

25         (6)  The commission may use its discretion in

26  determining the order in which it reviews the exemptions;

27  however, the commission should review approximately one-third

28  of the exemptions each year.  By February 1, 2003, the

29  commission shall submit its first report, by February 1, 2004,

30  the commission shall submit its second report, and by February

31  1, 2005, the commission shall submit its final report to the


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                                          HB 2027, First Engrossed



  1  President of the Senate and the Speaker of the House of

  2  Representatives.

  3         (7)  This section expires June 30, 2005.

  4         Section 2.  Legislative Findings:  Over the years the

  5  Legislature has passed numerous exemptions from the sales and

  6  use tax.  Since the priorities of the state can change over

  7  time, and the House and Senate have undertaken no

  8  comprehensive review of the exemptions, the Legislature finds

  9  that it is in the best interest of the state to have such a

10  review.  The Sales Tax Exemption Review Commission is created

11  to provide this needed review of the sales and use tax

12  exemptions in chapter 212.  This review will allow the

13  Legislature to examine the purpose and effects of all sales

14  and use tax exemptions to ensure that each exemption fulfills

15  an important state interest.  This review will identify

16  exemptions that no longer concur with the present interests of

17  the state and provide the Legislature with a recommendation of

18  which exemptions should be repealed.

19         Section 3.  This act shall take effect upon becoming a

20  law.

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