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.