Florida Senate - 2025 SB 1906 By Senator Brodeur 10-04251-25 20251906__ 1 A bill to be entitled 2 An act relating to debt reduction; amending s. 215.98, 3 F.S.; revising requirements for the debt affordability 4 report prepared annually by the Division of Bond 5 Finance to include specified information relating to 6 state debt; creating the Debt Reduction Program within 7 the State Board of Administration for a specified 8 purpose; requiring the Division of Bond Finance to use 9 its best efforts to use specified funds to achieve 10 such purpose; authorizing the use of such funds for 11 necessary or incidental transactions for such purpose; 12 providing appropriations; providing an effective date. 13 14 Be It Enacted by the Legislature of the State of Florida: 15 16 Section 1. Section 215.98, Florida Statutes, is amended to 17 read: 18 215.98 State debt fiscal responsibility.— 19 (1) It is the public policy of this state to encourage 20 fiscal responsibility on matters pertaining to state debt. In an 21 effort to finance essential capital projects for the benefit of 22 residents at favorable interest rates, the state must continue 23 to maintain its excellent credit standing with investors. 24 Authorizations of state debt must take into account the ability 25 of the state to meet its total debt service requirements in 26 light of other demands on the state’s fiscal resources. The 27 Legislature declares that it is the policy of this state to 28 exercise prudence in undertaking the authorization and issuance 29 of debt. In order to implement this policy, the Legislature 30 desires to authorize the issuance of additional state tax 31 supported debt only when such authorization would not cause the 32 ratio of debt service to revenue available to pay debt service 33 on tax-supported debt to exceed 6 percent. If the 6-percent 34 target debt ratio will be exceeded, the authorization of such 35 additional debt must be accompanied by a legislative statement 36 of determination that such authorization and issuance is in the 37 best interest of the state and should be implemented. The 38 Legislature shall not authorize the issuance of additional state 39 tax-supported debt if such authorization would cause the 40 designated benchmark debt ratio of debt service to revenues 41 available to pay debt service to exceed 7 percent unless the 42 Legislature determines that such additional debt is necessary to 43 address a critical state emergency. 44 (2) The Division of Bond Finance shall conduct a debt 45 affordability analysis each year. Proposed capital projects that 46 require funding by the issuance of additional state debt shall 47 be evaluated on the basis of the analysis to assist the Governor 48 and the Legislature in setting priorities among capital projects 49 and related appropriations. 50 (a) The Division of Bond Finance shall annually prepare a 51 debt affordability report, to be presented to the governing 52 board of the Division of Bond Finance, the President of the 53 Senate, the Speaker of the House of Representatives, and the 54 chair of each appropriations committee by December 15 of each 55 year, for purposes of providing a framework for the Legislature 56 to evaluate and establish priorities for bills that propose the 57 authorization of additional state debt during the next budget 58 year. 59 (b) The report shall include, but not be limited to: 60 1. A listing of state debt outstanding, other debt secured 61 by state revenues, and other contingent debt. 62 2. An estimate of revenues available for the next 10 fiscal 63 years to pay debt service, including general revenues plus any 64 revenues specifically pledged to pay debt service. 65 3. An estimate of additional debt issuance for the next 10 66 fiscal years for the state’s existing borrowing programs. 67 4. A schedule of the annual debt service requirements, 68 including principal and interest allocation, on the outstanding 69 state debt and an estimate of the annual debt service 70 requirements on the debt included in subparagraph 3. for each of 71 the next 10 fiscal years. 72 5. An overview of the state’s general obligation credit 73 rating. 74 6. Identification and calculation of pertinent debt ratios, 75 including, but not limited to, debt service to revenues 76 available to pay debt service, debt to personal income, and debt 77 per capita for the state’s net tax-supported debt. 78 7. The estimated debt capacity available over the next 10 79 fiscal years without the benchmark debt ratio of debt service to 80 revenue exceeding 6 percent. 81 8. A comparison of the debt ratios prepared for 82 subparagraph 6., with the comparable debt ratios for the 10 most 83 populous states. 84 9. A description of the strategies employed to retire 85 outstanding state debt, the amount of state debt retired, the 86 amount of any necessary or incidental payments made in 87 association with a transaction that realizes debt service 88 savings or reduces the amount of state debt outstanding, and the 89 debt service savings generated and a recommendation as to 90 whether it is in the best interest of the state for the 91 Legislature to continue the Debt Reduction Program pursuant to 92 subsection (3). 93 (c) The Division of Bond Finance shall prepare an update of 94 the report set forth above upon completion of the revenue 95 estimates prepared in connection with the legislative session. 96 (d) Any entity issuing debt secured by state revenues shall 97 provide the information necessary to prepare the debt 98 affordability report. 99 (3) The Debt Reduction Program is created within the State 100 Board of Administration for the purpose of reducing the state’s 101 tax-supported debt by accelerating the retirement of bonds prior 102 to maturity. The Division of Bond Finance shall use its best 103 efforts to use any funds transferred for the purpose of this 104 program to redeem, defease, purchase, or otherwise extinguish 105 outstanding state bonds, other than state bonds of the 106 Department of Transportation or the Florida Turnpike Enterprise, 107 and may use the funds to make any other payments necessary or 108 incidental to the transactions for the purpose of realizing debt 109 service savings and reducing the amount of state debt 110 outstanding. 111 (4) Failure to comply with this section shall not affect 112 the validity of any debt or the authorization of such debt. 113 Section 2. The Chief Financial Officer shall transfer $250 114 million from the General Revenue Fund on July 1 of each fiscal 115 year, beginning in the 2025-2026 fiscal year, to the State Board 116 of Administration for the Debt Reduction Program pursuant to s. 117 215.98, Florida Statutes. Any unexpended funds shall revert on 118 June 30 of each fiscal year to the General Revenue Fund. 119 Section 3. This act shall take effect July 1, 2025.