Florida Senate - 2020 SB 1702
By Senator Diaz
36-01768-20 20201702__
1 A bill to be entitled
2 An act relating to local government fiscal
3 transparency; amending s. 11.40, F.S.; expanding the
4 scope of the Legislative Auditing Committee review to
5 include compliance with local government fiscal
6 transparency requirements; amending s. 11.45, F.S.;
7 providing procedures for the Auditor General and local
8 governments to comply with the local government fiscal
9 transparency requirements; amending ss. 125.045 and
10 166.021, F.S.; revising reporting requirements for
11 certain local government economic development
12 incentives; revising classifications for economic
13 development incentives; requiring the Office of
14 Economic and Demographic Research to compare certain
15 results; transferring and renumbering s. 218.80, F.S.,
16 relating to the Public Bid Disclosure Act; creating
17 part VIII of ch. 218, F.S., consisting of ss. 218.801,
18 218.803, 218.805, 218.81, 218.82, 218.83, 218.84,
19 218.88, and 218.89, F.S.; providing a short title;
20 providing a purpose; defining terms; requiring local
21 governments to post certain voting record information
22 on their websites; requiring such websites to provide
23 links to related websites; requiring such websites and
24 the information on such websites to comply with a
25 specified federal law; requiring property appraisers
26 and local governments to post certain property tax
27 information and history on their websites; requiring
28 public notices for public hearings and meetings before
29 certain tax increases or the issuance of new tax
30 supported debt; specifying noticing and advertising
31 requirements for such public hearings and meetings;
32 requiring local governments to conduct certain debt
33 affordability analyses under specified conditions;
34 requiring audits of local governments to include
35 affidavits signed by the chair of the local government
36 governing board; requiring specified information to
37 accompany audits of local governments and to be filed
38 with the Auditor General; providing a method to post
39 certain required information for local governments
40 that do not operate a website; amending ss. 215.97 and
41 218.32, F.S.; conforming cross-references; declaring
42 that the act fulfills an important state interest;
43 providing an effective date.
44
45 Be It Enacted by the Legislature of the State of Florida:
46
47 Section 1. Subsection (2) of section 11.40, Florida
48 Statutes, is amended to read:
49 11.40 Legislative Auditing Committee.—
50 (2) Following notification by the Auditor General, the
51 Department of Financial Services, the Division of Bond Finance
52 of the State Board of Administration, the Governor or his or her
53 designee, or the Commissioner of Education or his or her
54 designee of the failure of a local governmental entity, district
55 school board, charter school, or charter technical career center
56 to comply with the applicable provisions within s. 11.45(5)-(7),
57 s. 218.32(1), s. 218.38, or s. 218.503(3), or part VIII of
58 chapter 218, the Legislative Auditing Committee may schedule a
59 hearing to determine if the entity should be subject to further
60 state action. If the committee determines that the entity should
61 be subject to further state action, the committee shall:
62 (a) In the case of a local governmental entity or district
63 school board, direct the Department of Revenue and the
64 Department of Financial Services to withhold any funds not
65 pledged for bond debt service satisfaction which are payable to
66 such entity until the entity complies with the law. The
67 committee shall specify the date that such action must begin,
68 and the directive must be received by the Department of Revenue
69 and the Department of Financial Services 30 days before the date
70 of the distribution mandated by law. The Department of Revenue
71 and the Department of Financial Services may implement this
72 paragraph.
73 (b) In the case of a special district created by:
74 1. A special act, notify the President of the Senate, the
75 Speaker of the House of Representatives, the standing committees
76 of the Senate and the House of Representatives charged with
77 special district oversight as determined by the presiding
78 officers of each respective chamber, the legislators who
79 represent a portion of the geographical jurisdiction of the
80 special district, and the Department of Economic Opportunity
81 that the special district has failed to comply with the law.
82 Upon receipt of notification, the Department of Economic
83 Opportunity shall proceed pursuant to s. 189.062 or s. 189.067.
84 If the special district remains in noncompliance after the
85 process set forth in s. 189.0651, or if a public hearing is not
86 held, the Legislative Auditing Committee may request the
87 department to proceed pursuant to s. 189.067(3).
88 2. A local ordinance, notify the chair or equivalent of the
89 local general-purpose government pursuant to s. 189.0652 and the
90 Department of Economic Opportunity that the special district has
91 failed to comply with the law. Upon receipt of notification, the
92 department shall proceed pursuant to s. 189.062 or s. 189.067.
93 If the special district remains in noncompliance after the
94 process set forth in s. 189.0652, or if a public hearing is not
95 held, the Legislative Auditing Committee may request the
96 department to proceed pursuant to s. 189.067(3).
97 3. Any manner other than a special act or local ordinance,
98 notify the Department of Economic Opportunity that the special
99 district has failed to comply with the law. Upon receipt of
100 notification, the department shall proceed pursuant to s.
101 189.062 or s. 189.067(3).
102 (c) In the case of a charter school or charter technical
103 career center, notify the appropriate sponsoring entity, which
104 may terminate the charter pursuant to ss. 1002.33 and 1002.34.
105 Section 2. Paragraphs (d) through (j) of subsection (7) of
106 section 11.45, Florida Statutes, are redesignated as paragraphs
107 (e) through (k), respectively, and a new paragraph (d) is added
108 to that subsection, to read:
109 11.45 Definitions; duties; authorities; reports; rules.—
110 (7) AUDITOR GENERAL REPORTING REQUIREMENTS.—
111 (d) During the Auditor General’s review of audit reports,
112 the Auditor General shall contact each local government, as
113 defined in s. 218.805(2), that is not in compliance with part
114 VIII of chapter 218 and request evidence of corrective action.
115 The local government shall provide the Auditor General with
116 evidence of the initiation of corrective action within 45 days
117 after the date it is requested by the Auditor General and
118 evidence of completion of corrective action within 180 days
119 after the date it is requested by the Auditor General. If the
120 local government fails to comply with the Auditor General’s
121 request or is unable to take corrective action within the
122 required timeframe, the Auditor General shall notify the
123 Legislative Auditing Committee.
124 Section 3. Subsection (5) of section 125.045, Florida
125 Statutes, is amended to read:
126 125.045 County economic development powers.—
127 (5)(a) By January 15 of each year By January 15, 2011, and
128 annually thereafter, each county shall report to the Office of
129 Economic and Demographic Research the economic development
130 incentives in excess of $25,000 given to each business any
131 business during the county’s previous fiscal year. The Office of
132 Economic and Demographic Research shall compile the information
133 from the counties into a report and provide the report to the
134 President of the Senate, the Speaker of the House of
135 Representatives, and the Department of Economic Opportunity.
136 Each county must identify whether the economic development
137 incentives were provided directly by the county or by another
138 entity on behalf of the county, as well as the source of local
139 dollars and any state or federal dollars obligated for the
140 incentive. Economic development incentives are classified as
141 follows include:
142 1. Class I: Direct Financial incentives of monetary
143 assistance provided to an individual a business from the county
144 or through an organization authorized by the county. Such
145 incentives include:, but are not limited to, grants, loans,
146 equity investments, loan insurance and guarantees, and training
147 subsidies.
148 a. Grants.
149 b. Tax-based credits, refunds, or exemptions.
150 c. Fee-based credits, refunds, or exemptions.
151 d. Loans, loan insurance, or loan guarantees.
152 e. Below-market rate leases or deeds for real property.
153 f. Job training or recruitment.
154 g. Subsidized or discounted government services.
155 h. Infrastructure improvements.
156 2. Class II: General assistance, services, and support
157 provided collectively to businesses with a common interest or
158 purpose. Such incentives include:
159 a. Technical assistance and training.
160 b. Business incubators and accelerators.
161 c. Infrastructure improvements Indirect incentives in the
162 form of grants and loans provided to businesses and community
163 organizations that provide support to businesses or promote
164 business investment or development.
165 3. Class III: Business recruitment, retention, or expansion
166 efforts provided to benefit an individual business or class of
167 businesses. Such incentives include:
168 a. Marketing and market research.
169 b. Trade missions and trade shows.
170 c. Site selection.
171 d. Targeted assistance with the permitting and licensing
172 process.
173 e. Business plan or project development Fee-based or tax
174 based incentives, including, but not limited to, credits,
175 refunds, exemptions, and property tax abatement or assessment
176 reductions.
177 4. Below-market rate leases or deeds for real property.
178 (b) A county shall report its economic development
179 incentives in the format specified by the Office of Economic and
180 Demographic Research.
181 (c) The Office of Economic and Demographic Research shall
182 compile the economic development incentives provided by each
183 county in a manner that shows the total of each class of
184 economic development incentives provided by each county and all
185 counties. To the extent possible, the office shall compare the
186 results of the economic development incentives provided by all
187 counties to the results of state incentives provided within
188 similar classes.
189 Section 4. Paragraph (e) of subsection (8) of section
190 166.021, Florida Statutes, is amended to read:
191 166.021 Powers.—
192 (8)
193 (e)1. By January 15 of each year By January 15, 2011, and
194 annually thereafter, each municipality having annual revenues or
195 expenditures greater than $250,000 shall report to the Office of
196 Economic and Demographic Research the economic development
197 incentives in excess of $25,000 given to each business any
198 business during the municipality’s previous fiscal year. The
199 Office of Economic and Demographic Research shall compile the
200 information from the municipalities into a report and provide
201 the report to the President of the Senate, the Speaker of the
202 House of Representatives, and the Department of Economic
203 Opportunity. Each municipality must identify whether the
204 economic development incentives were provided directly by the
205 municipality or by another entity on behalf of the municipality,
206 as well as the source of local dollars and any state or federal
207 dollars obligated for the incentive. Economic development
208 incentives are classified as follows include:
209 a. Class I: Direct Financial incentives of monetary
210 assistance provided to an individual a business from the
211 municipality or through an organization authorized by the
212 municipality. Such incentives include:, but are not limited to,
213 grants, loans, equity investments, loan insurance and
214 guarantees, and training subsidies.
215 (I) Grants.
216 (II) Tax-based credits, refunds, or exemptions.
217 (III) Fee-based credits, refunds, or exemptions.
218 (IV) Loans, loan insurance, or loan guarantees.
219 (V) Below-market rate leases or deeds for real property.
220 (VI) Job training or recruitment.
221 (VII) Subsidized or discounted government services.
222 (VIII) Infrastructure improvements.
223 b. Class II: General assistance, services, and support
224 provided collectively to businesses with a common interest or
225 purpose. Such incentives include:
226 (I) Technical assistance and training.
227 (II) Business incubators and accelerators.
228 (III) Infrastructure improvements Indirect incentives in
229 the form of grants and loans provided to businesses and
230 community organizations that provide support to businesses or
231 promote business investment or development.
232 c. Class III: Business recruitment, retention, or expansion
233 efforts provided to benefit an individual business or class of
234 businesses. Such incentives include:
235 (I) Marketing and market research.
236 (II) Trade missions and trade shows.
237 (III) Site selection.
238 (IV) Targeted assistance with the permitting and licensing
239 process.
240 (V) Business plan or project development Fee-based or tax
241 based incentives, including, but not limited to, credits,
242 refunds, exemptions, and property tax abatement or assessment
243 reductions.
244 d. Below-market rate leases or deeds for real property.
245 2. A municipality shall report its economic development
246 incentives in the format specified by the Office of Economic and
247 Demographic Research.
248 3. The Office of Economic and Demographic Research shall
249 compile the economic development incentives provided by each
250 municipality in a manner that shows the total of each class of
251 economic development incentives provided by each municipality
252 and all municipalities. To the extent possible, the office shall
253 compare the results of the economic development incentives
254 provided by all municipalities to the results of state
255 incentives provided in similar classes.
256 Section 5. Section 218.80, Florida Statutes, is transferred
257 and renumbered as section 218.795, Florida Statutes.
258 Section 6. Part VIII of chapter 218, Florida Statutes,
259 consisting of sections 218.801, 218.803, 218.805, 218.81,
260 218.82, 218.83, 218.84, 218.88, and 218.89, is created to read:
261 PART VIII
262 LOCAL GOVERNMENT FISCAL TRANSPARENCY ACT
263 218.801 Short title.—This part may be cited as the “Local
264 Government Fiscal Transparency Act.”
265 218.803 Purpose.—The purpose of this part is to promote the
266 fiscal transparency of local governments when using public funds
267 by requiring additional public noticing of proposed local
268 government actions that increase taxes, enact new taxes, extend
269 expiring taxes, or issue tax-supported debt and requiring voting
270 records of local governing bodies related to such actions to be
271 easily and readily accessible by the public.
272 218.805 Definitions.—As used in this part, the term:
273 (1) “Debt” means bonds, loans, promissory notes, lease
274 purchase agreements, certificates of participation, installment
275 sales, leases, or any other financing mechanisms or financial
276 arrangements, regardless of whether they are debt for legal
277 purposes or for financing or refinancing the acquisition,
278 construction, improvement, or purchase of capital outlay
279 projects.
280 (2) “Local government” means any county, municipality,
281 school district, special district dependent upon a county or
282 municipality, municipal service taxing unit, or independent
283 special district, but does not include special dependent or
284 independent districts established to provide hospital services,
285 provided such special districts do not levy, assess, or collect
286 ad valorem taxes.
287 (3) “Tax increase” means:
288 (a) For ad valorem taxes, any increase in a local
289 government’s millage rate above the rolled-back rate as
290 described in s. 200.065(1).
291 (b) For all other taxes, an increase in the tax rate, the
292 enactment of a new tax, or an extension of a tax.
293 (4) “Tax-supported debt” means debt with a duration of more
294 than 5 years secured in whole or in part by state or local tax
295 levies, regardless of whether such security is direct or
296 indirect or explicit or implicit, and includes debt for which
297 annual appropriations pledged for payment are from government
298 fund types receiving tax revenues or shared revenues from state
299 tax sources. The term does not include debt secured solely by
300 revenues generated by the project that is financed with the
301 debt.
302 218.81 Voting record access.—
303 (1) Each local government shall post on its website, in a
304 manner that is easily accessible to the public, a history of the
305 voting record of each action taken by the local governing board
306 that addressed a tax increase or new tax-supported debt
307 issuance, except debt that was refinanced or refunded and that
308 did not extend the term or increase the outstanding principal
309 amount of the original debt, as follows:
310 (a) By October 1, 2020, the voting record history from the
311 preceding year.
312 (b) By October 1, 2021, the voting record history from the
313 preceding 2 years.
314 (c) By October 1, 2022, the voting record history from the
315 preceding 3 years.
316 (d) By October 1, 2023, and each October 1 thereafter, the
317 voting record history from the preceding 4 years.
318 (2) The website must provide links to allow users to
319 navigate to related websites if supporting details or
320 documentation are available, and the websites and the
321 information on those websites must comply with the Americans
322 with Disabilities Act.
323 (3) In each public notice of a tax increase or the issuance
324 of new tax-supported debt, each local government shall include
325 with the public notice the website address at which the voting
326 records can be accessed.
327 218.82 Property tax information and history.—
328 (1) Each county property appraiser, as defined in s.
329 192.001, shall maintain a website that includes, in a manner
330 easily accessible to the public, links that provide access to:
331 (a) The notice of proposed property taxes and non-ad
332 valorem assessments required under s. 200.069 for each parcel of
333 property in the county.
334 (b) A history of the millage rate and the amount of tax
335 levied by each taxing authority on each parcel in the county as
336 follows:
337 1. By October 1, 2020, the history from the preceding 2
338 years.
339 2. By October 1, 2021, the history from the preceding 3
340 years.
341 3. By October 1, 2022, and each October 1 thereafter, the
342 history from the preceding 4 years.
343
344 This subsection does not apply to information that is otherwise
345 exempt from public disclosure.
346 (2) Each local government shall post on its website, in a
347 manner that is easily accessible to the public, links that
348 provide access to a history of each of its millage rates and the
349 total annual amount of revenue generated by each of these
350 levies, as follows:
351 (a) By October 1, 2020, the history from the preceding 2
352 years.
353 (b) By October 1, 2021, the history from the preceding 3
354 years.
355 (c) By October 1, 2022, and each October 1 thereafter, the
356 history from the preceding 4 years.
357 218.83 Expanded public noticing of tax increases and
358 issuance of new tax-supported debt.—
359 (1) For purposes of this section, the term “tax increase”
360 does not include an ad valorem tax increase and the term “tax
361 supported debt” does not include debt approved by referendum and
362 secured by ad valorem taxes.
363 (2) A local government that intends to vote on a proposed
364 tax increase or the issuance of new tax-supported debt shall
365 advertise a public hearing to solicit public input concerning
366 the proposed tax increase or the issuance of new tax-supported
367 debt. This public hearing must occur at least 14 days before the
368 scheduled date of the local governing board meeting to take a
369 final vote on the proposed tax increase or the issuance of new
370 tax-supported debt. Any hearing required under this subsection
371 shall be held after 5 p.m. if scheduled on a day other than
372 Saturday. A hearing may not be held on a Sunday. The general
373 public must be allowed to speak and to ask questions relevant to
374 the proposed tax increase or the issuance of new tax-supported
375 debt. The local government shall provide public notice as
376 provided in subsection (4).
377 (3)(a) If, following the public hearing, the local
378 government intends to proceed with a vote to approve a tax
379 increase or the issuance of tax-supported debt, the local
380 government shall provide public notice in the manner set forth
381 in subsection (4) at least 10 days before the scheduled public
382 meeting date.
383 (b) For a proposed tax increase, the notice shall also
384 include, at a minimum:
385 1. A statement prominently posted that the local government
386 intends to vote on a proposed tax, tax extension, or tax
387 increase.
388 2. The time and place of the public meeting.
389 3. The amount of the tax increase, including both the rate
390 and the total amount of annual revenue expected to be generated
391 and the expected annual revenue expressed as a percentage of the
392 government’s general fund revenue.
393 4. A detailed explanation of the intended uses of the levy.
394 5. A statement indicating whether the local government
395 expects to use the proceeds to secure debt.
396 (c) For new tax-supported debt issuance, the notice shall
397 also include, at a minimum:
398 1. A statement prominently posted that the local government
399 intends to vote on a proposed new issuance of tax-supported
400 debt.
401 2. The time and place of the public meeting.
402 3. A truth-in-bonding statement in substantially the
403 following form:
404 “The ...(insert local government name)... is proposing to
405 issue $...(insert principal)... of debt or obligation for the
406 purpose of ...(insert purpose).... This debt or obligation is
407 expected to be repaid over a period of ...(insert term of
408 issue)... years. At a forecasted interest rate of ...(insert
409 rate of interest)..., total interest paid over the life of the
410 debt or obligation will be $...(insert sum of interest
411 payments).... The source of repayment or security for this
412 proposal is the ...(insert the local government name)...
413 existing ...(insert fund).... Authorizing this debt or
414 obligation will result in $...(insert the annual amount)... of
415 ...(insert local government name)... ...(insert fund)... moneys
416 not being available to finance the other services of the
417 ...(insert local government name)... each year for ...(insert
418 the length of the debt or obligation)....”
419 4. A description of the debt affordability ratios
420 calculated pursuant to s. 218.84 in substantially the following
421 form:
422 “The following ratios measure the affordability of
423 outstanding and proposed new long-term, tax-supported debt
424 issued by...(insert local government name).... The ratios show
425 debt service as a percentage of the revenues available to
426 support the debt, including the new debt being proposed
427 ...(insert 5-year history and 2-year projection of debt
428 affordability ratio)....”
429 (4) The notice provided by a local government announcing a
430 public hearing to take public input as provided in subsection
431 (2) or the public meeting to take a final vote as provided in
432 subsection (3) must meet the following requirements:
433 (a) The local government must advertise notice in a
434 newspaper of general circulation in the county or counties in
435 which the local government exists. A local government may
436 advertise in a geographically limited insert of a newspaper of
437 general circulation if the region encompassed by the insert
438 contains the jurisdictional boundaries of the local government.
439 The newspaper must be of general interest to readership in the
440 community and not one of limited subject matter pursuant to
441 chapter 50. The notice:
442 1. Must be at least one-quarter page in size in a newspaper
443 of standard size or one-half page in size in a newspaper of
444 tabloid size and the headline of the notice must be in at least
445 18-point font.
446 2. May not be placed in that portion of the newspaper in
447 which legal notices and classified advertisements appear.
448 3. Must appear in a newspaper that is published at least 5
449 days a week unless the only newspaper in the county is published
450 fewer than 5 days a week. If the notice appears in a
451 geographically limited insert of a newspaper of general
452 circulation, the insert must be one that is published at least
453 twice a week throughout the local government’s jurisdiction.
454
455 In lieu of publishing the notice, the local government may mail
456 a copy of the notice to each elector residing within the
457 jurisdiction of the local government.
458 (b) The local government must post on its website in a
459 manner that is easily accessible to the public the information
460 required under subsections (2) and (3), as applicable.
461 (5) This section does not apply to the refinancing or
462 refunding of debt that does not extend the term or increase the
463 outstanding principal amount of the original debt.
464 218.84 Local government debt fiscal responsibility.—
465 (1) It is the public policy of this state to encourage
466 local governments to exercise prudence in authorizing and
467 issuing debt. Before a local government authorizes debt, it must
468 consider its ability to meet its total debt service obligations
469 in light of other demands on the local government’s fiscal
470 resources. Each local government shall perform a debt
471 affordability analysis as set forth in subsection (2), and the
472 governing board shall consider the analysis before approving the
473 issuance of new tax-supported debt.
474 (2) The debt affordability analysis shall, at a minimum,
475 consist of the calculation of the local government’s actual debt
476 affordability ratio for the 5 fiscal years before the year the
477 debt is expected to be issued and a projection of the ratio for
478 at least the first 2 fiscal years in which the debt is expected
479 to be issued. The analysis shall include a comparison of the
480 debt affordability ratio with and without the new debt issuance.
481 (3) The debt affordability ratio for a given fiscal year
482 shall be a ratio:
483 (a) The numerator of which is the total annual debt service
484 for outstanding tax-supported debt of the local government.
485 (b) The denominator of which is the total annual revenues
486 available to pay debt service on outstanding tax-supported debt
487 of the local government.
488 218.88 Audits.—Audits of financial statements of local
489 governments that are performed by a certified public accountant
490 pursuant to s. 218.39 and submitted to the Auditor General must
491 be accompanied by an affidavit executed by the chair of the
492 governing board of the local government, as a separate document,
493 stating that the local government has complied with this part
494 and must be filed with the Auditor General or, if the local
495 government has not complied with this part, the affidavit shall
496 include a description of the noncompliance and corrective action
497 taken by the local government to correct the noncompliance and
498 to prevent such noncompliance in the future.
499 218.89 Local government websites.—If a local government is
500 required under this part to post information on its website but
501 does not operate an official website, the local government must
502 provide the county or counties in which the local government is
503 located the information required to be posted, and each such
504 county shall post the required information on its website.
505 Section 7. Paragraph (a) of subsection (2) of section
506 215.97, Florida Statutes, is amended to read:
507 215.97 Florida Single Audit Act.—
508 (2) As used in this section, the term:
509 (a) “Audit threshold” means the threshold amount used to
510 determine when a state single audit or project-specific audit of
511 a nonstate entity shall be conducted in accordance with this
512 section. Each nonstate entity that expends a total amount of
513 state financial assistance equal to or in excess of $750,000 in
514 any fiscal year of such nonstate entity shall be required to
515 have a state single audit or a project-specific audit for such
516 fiscal year in accordance with the requirements of this section.
517 After consulting with the Executive Office of the Governor, the
518 Department of Financial Services, and all state awarding
519 agencies, the Auditor General shall periodically review the
520 threshold amount for requiring audits under this section and may
521 recommend any appropriate statutory change to revise the
522 threshold amount in the annual report submitted to the
523 Legislature pursuant to s. 11.45(7)(i) s. 11.45(7)(h).
524 Section 8. Paragraph (e) of subsection (1) of section
525 218.32, Florida Statutes, is amended to read:
526 218.32 Annual financial reports; local governmental
527 entities.—
528 (1)
529 (e) Each local governmental entity that is not required to
530 provide for an audit under s. 218.39 must submit the annual
531 financial report to the department no later than 9 months after
532 the end of the fiscal year. The department shall consult with
533 the Auditor General in the development of the format of annual
534 financial reports submitted pursuant to this paragraph. The
535 format must include balance sheet information used by the
536 Auditor General pursuant to s. 11.45(7)(g) s. 11.45(7)(f). The
537 department must forward the financial information contained
538 within the annual financial reports to the Auditor General in
539 electronic form. This paragraph does not apply to housing
540 authorities created under chapter 421.
541 Section 9. The Legislature finds that this act fulfills an
542 important state interest.
543 Section 10. This act shall take effect July 1, 2020.