Florida Senate - 2016 CS for CS for SB 1652
By the Committees on Finance and Tax; and Community Affairs; and
Senators Bradley, Bean, and Hutson
593-03183-16 20161652c2
1 A bill to be entitled
2 An act relating to discretionary sales surtaxes;
3 amending s. 112.64, F.S.; authorizing a county to
4 apply proceeds of a pension liability surtax toward
5 reducing the unfunded liability of a defined benefit
6 retirement plan or system; specifying the method of
7 determining the amortization schedule if a surtax is
8 approved; amending s. 212.055, F.S.; authorizing a
9 county to levy a pension liability surtax by ordinance
10 if certain conditions are met; prescribing the form of
11 the ballot statement; requiring the Department of
12 Revenue to distribute the surtax proceeds, less
13 administrative fees; specifying the manner in which a
14 local government may use the surtax proceeds;
15 prescribing requirements for the ordinance that
16 provides for the imposition of the surtax; specifying
17 conditions under which the surtax terminates; limiting
18 the combined rate of specified discretionary sales
19 surtaxes; providing an effective date.
20
21 Be It Enacted by the Legislature of the State of Florida:
22
23 Section 1. Subsection (6) of section 112.64, Florida
24 Statutes, is renumbered as subsection (7), and a new subsection
25 (6) is added to that section, to read:
26 112.64 Administration of funds; amortization of unfunded
27 liability.—
28 (6)(a) Notwithstanding any other provision of this part,
29 the proceeds of a pension liability surtax imposed by a county
30 pursuant to s. 212.055, which is levied for the purpose of
31 funding or amortizing the unfunded liability of a defined
32 benefit retirement plan or system, excluding the Florida
33 Retirement System, shall be actuarially recognized, and the
34 county shall apply the present value of the total projected
35 proceeds of the surtax to reduce the unfunded liability or to
36 amortize it as part of the county’s annual required
37 contribution, beginning with the fiscal year immediately
38 following approval of the pension liability surtax. The unfunded
39 liability amortization schedule must be adjusted beginning with
40 the fiscal year immediately following approval of the pension
41 liability surtax and amortized over a period of 30 years.
42 (b) The payroll of all employees covered by a closed
43 retirement plan or system that receives funds from the pension
44 liability surtax must be included in determining the unfunded
45 liability amortization schedule for the closed plan, regardless
46 of the plan in which the employees currently participate, and
47 the payroll growth assumption must be adjusted to reflect the
48 payroll of those employees when calculating the amortization of
49 the unfunded liability.
50 Section 2. Subsection (9) is added to section 212.055,
51 Florida Statutes, to read:
52 212.055 Discretionary sales surtaxes; legislative intent;
53 authorization and use of proceeds.—It is the legislative intent
54 that any authorization for imposition of a discretionary sales
55 surtax shall be published in the Florida Statutes as a
56 subsection of this section, irrespective of the duration of the
57 levy. Each enactment shall specify the types of counties
58 authorized to levy; the rate or rates which may be imposed; the
59 maximum length of time the surtax may be imposed, if any; the
60 procedure which must be followed to secure voter approval, if
61 required; the purpose for which the proceeds may be expended;
62 and such other requirements as the Legislature may provide.
63 Taxable transactions and administrative procedures shall be as
64 provided in s. 212.054.
65 (9) PENSION LIABILITY SURTAX.—
66 (a) The governing body of a county may levy a pension
67 liability surtax to fund underfunded defined benefit retirement
68 plans or systems, pursuant to an ordinance conditioned to take
69 effect upon approval by a majority vote of the electors of the
70 county voting in a referendum, at a rate that may not exceed 0.5
71 percent. The county may not impose a pension liability surtax
72 unless the underfunded defined benefit retirement plan or system
73 is below 80 percent of actuarial funding at the time the
74 ordinance or referendum is passed. The most recent actuarial
75 report submitted to the Department of Management Services
76 pursuant to s. 112.63 must be used to establish the level of
77 actuarial funding for purposes of determining eligibility to
78 impose the surtax. The governing body of a county may only
79 impose the surtax if:
80 1. An employee, including a police officer or firefighter,
81 who enters employment on or after the date when the local
82 government certifies that the defined benefit retirement plan or
83 system formerly available to such an employee has been closed
84 may not enroll in a defined benefit retirement plan or system
85 that will receive surtax proceeds.
86 2. The county currently levies a local government
87 infrastructure surtax pursuant to subsection (2) which is
88 scheduled to terminate and is not subject to renewal.
89 3. The pension liability surtax does not take effect until
90 the local government infrastructure surtax described in
91 subparagraph 2. is terminated.
92 (b) A referendum to adopt a pension liability surtax must
93 meet the requirements of s. 101.161 and must include a brief and
94 general description of the purposes for which the surtax
95 proceeds will be used.
96 (c) Pursuant to s. 212.054(4), the proceeds of the surtax
97 collected under this subsection, less an administrative fee that
98 may be retained by the department, shall be distributed by the
99 department to the local government.
100 (d) The local government may use the pension liability
101 surtax proceeds in the following manner:
102 1. If the proceeds of the pension liability surtax have
103 been actuarially recognized as provided for in s. 112.64(6), the
104 local government must distribute the proceeds to an eligible
105 defined benefit retirement plan or system, not including the
106 Florida Retirement System.
107 2. If the proceeds of the pension liability surtax have not
108 been actuarially recognized, the local government is authorized
109 to distribute the proceeds to an eligible defined benefit
110 retirement plan or system, not including the Florida Retirement
111 System, to pledge the proceeds of the surtax to repay debts
112 incurred for the purpose of making advanced payments toward the
113 unfunded liability of an underfunded defined benefit retirement
114 plan or system, and to reimburse itself from the proceeds of the
115 surtax for any borrowing costs associated with such debts.
116 (e) The ordinance providing for the imposition of the
117 pension liability surtax must specify how the proceeds will be
118 used:
119 1. The ordinance must specify the method of determining the
120 percentage of the proceeds, and the frequency of such payments,
121 distributed to each eligible defined benefit retirement plan or
122 system if the proceeds of the pension liability surtax are
123 actuarially recognized as provided for in s. 112.64(6).
124 2. The ordinance must specify the local government’s
125 intention to incur debt for the purpose of making advanced
126 payments toward the unfunded liability of an underfunded defined
127 benefit retirement plan or system if the proceeds of the pension
128 liability surtax are not actuarially recognized as provided for
129 in s. 112.64(6).
130 (f) A pension liability surtax imposed pursuant to this
131 subsection shall terminate on December 31 of the year in which
132 the actuarial funding level is expected to reach or exceed 100
133 percent for the defined benefit retirement plan or system for
134 which the surtax was levied or December 31, 2060, whichever
135 occurs first. The most recent actuarial report submitted to the
136 Department of Management Services pursuant to s. 112.63 must be
137 used to establish the level of actuarial funding.
138 (g) Notwithstanding any other provision of this section, a
139 county may not levy local option sales surtaxes authorized in
140 this subsection and subsections (2), (3), (4), and (5) in excess
141 of a combined rate of 1 percent.
142 Section 3. This act shall take effect July 1, 2016.